Advisory Jan, 21 2010

Aspiring for break-even benefits

For new franchisees the break-even period is the deciding factor for the success of a business. But the journey to reach the break-even period is also worthy of attention. Read on to know more

By Abha Garyali
Sub Editor
Aspiring for break-even benefits

A break–even period is a crucial time for a franchisee to maintain his momentum and keep himself motivated. Every franchisee aspires to reach the break-even period as soon as possible. There are a number of reasons why a franchisee tends to get demoralised during this time frame. Such as low sales, high debts and royalties can make the franchisee frustrated and despondent.

A break-even period usually ranges from six months to two years or even more, depending on the franchisor’s policy. During this time, retaining the quality of the products in the stores and remunerating the staff under a subsidized budget becomes tough. At such times, when the break-even seems far-off and sales are slacking, the franchisee may even think of selling out his franchise. Becoming a successful franchisee requires motivation to make the business work when the break-even period seems impossible.  Below are some guidelines to remain motivated as a franchisee:

Innovative ideas and techniques

Most aspiring franchisees think that a franchise does not require any innovation from their end as it is the franchisor’s prerogative. This misconception may not allow franchisees to come up with unique ideas to improve sales. But franchisees after discussing with the franchisors can generate novel business ideas and strategies.

Keeping practical expectations

Most of the franchisees in their urgency to succeed may set unachievable goals. It can be overwhelming if they do not attain even a fraction of the set targets. It is always advisable for new franchisees to set small targets. Having low expectations from the franchise initially may be the key to long-lasting success. Reaching small targets can make any franchisee confident that he is taking his business in the right direction.

Taking breaks from work

All work and no play, makes Jack a dull boy’ is a well-known saying. When business is slacking, many struggling franchisees bury themselves in their work to get better results. Owning a business does not make an entrepreneur a slave with no holidays. Taking regular breaks help in rejuvenating oneself and keeping abreast with the latest technologies. It is possible to come across ideas which you can employ in your business as well.

Targeting priorities

Every person has different goals and priorities in his business. Analyse what made you become a franchisee in the first place. Was it money, power or passion that prompted you to venture into franchising? Analysing your priorities can boost up your failing spirits and may lead you to the path of success.

Think positive

Last but not the least, a good way to boost business is to be optimistic and positive. Thinking negatively and doubting yourself can be unproductive and surely affect the business negatively.

A journey through the break–even period is no doubt a challenging one. Still every franchisee needs to have faith and the determination to succeed. Remember there are many means to motivate yourself but success can be achieved only through patience and perseverance.

Related: Why choose multi-unit franchise model

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