Why Do I Need a Franchise Development Budget?
We’re coming upon the end of the year. We know that trying to fit everything in before holiday vacation can seem like a whirlwind. When you’re in that kind of time crunch, it’s easy for budgeting to fall lower on the priority list.
The truth is, though, you must make it a priority. Even though it can be stressful and overwhelming, creating a development budget for your franchise is a crucial component for success. It’s easy to overlook how vital a recruitment budget is because budget maintenance isn’t appealing. So much creativity and innovation go into franchise development; budget planning can easily be pushed aside amid everything else.
We’re here to tell you: don’t make the mistake of overlooking your recruitment budgeting. Maintaining a budget will benefit your company in a myriad of ways.
A budget:
● Gives you more control over your business.
● Allows you to monitor your recruitment performance.
● Guides you in meeting your goals and objectives.
Budgeting is a critical component in ensuring success. At CGI Franchise, we’ve been there–down in the trenches trying to figure out our budget by trial and error. We want to help you by laying out an effective and easy solution for budget planning that will enable your franchise recruitment to run more efficiently in the next year.
How Does a Budget Provide Early Detection of Growth and Recruitment Problems?
Let’s begin with the basics. Before setting up a budget process, you need to understand why maintaining this process is critical for your company. Creating and tracking a budget gives you crucial insight into how your company is growing. If there are any growth or recruitment issues, a budget can give you an early indication that an issue is on the horizon. Once your budget has been established, it’s important to track it, but don’t be overly concerned if you aren’t meeting your goals month-to-month.
If you notice an area within a quarter that is off-target by 2 or 3 percent, you should be able to identify and speak to this discrepancy. Within a single month, it’s common to see significant percentages off target due to the timing of signings. A bad month may happen. When you notice bad quarters then you should start to get concerned. If this occurs, you’ll want to investigate into the preceding 6-12 months to recognize if it’s a trend or a single bad quarter. Don’t investigate only the poor results. Investigate winning quarters as well to find the root cause behind the change. With the help of a budget, your franchise development leadership will know what drives both winning and poor results.
How Does a Budget Allow You to Predict and Set Goals?
One of the biggest benefits of keeping a budget is the ability to track the difference between your budgetary goals and your current numbers. By keeping a record, you’re creating a baseline. This will enable you to more accurately determine what it will take to create the future you want your franchise to have. Budgetary records serve as a compass and tool for measurement, as well as a means of comparison. It is only through the comparison of budgetary goals to your current numbers that you can establish what tactics are working and those that are not.
After maintaining a budget long enough to make educated comparisons, you will see the imperfections in your process. This allows you to slowly chip away at these discrepancies and issues one at a time. In the end, you’ll discover which strategies and tactics are working and which ones aren’t. This will enable you to make the necessary changes to create a winning recruitment program.
Who Should Manage the Recruitment Budget?
Team members who maintain and manage budgets can have any number of titles. Here at CGIF, we call them ROS® Managers. Regardless of who’s running your budget, they need to have clear direction from the executive sponsor of your team. This person must have insight into how the franchise is expected to grow. The team running the budget needs to know what leadership expects to happen in the next 12 months to accomplish what they want in the next 3-5 years. Whoever is maintaining the budget should never go into budget planning blind. This person needs to know if the budgeting expectation is to turn a profit, break even, or even take an acceptable loss.
How Does Working with CGI Franchise Bring Clarity to Recruitment Budgeting?
Working with CGIF can teach you to ask the right questions about your franchise budget. We’ve seen many recruitment programs that fail to ask the right questions and misunderstand how to approach planning and budgeting beneficially. Every CGI Franchise Brand Partner has a ROS® Coach, who helps you plan your recruitment budget successfully. Your brand will benefit significantly by assessing your recruitment budget with an ROS® Coach. By doing so, you’ll have a clearer picture of the stability of your franchise and the financial risks you’re undertaking in development.
At CGIF, our goal is to help our Brand Partners build and maintain a winning recruitment program and get excited about the possibilities.
If budgeting for your franchise development seems overwhelming, we’d like to point you to a webinar that CGIF CEO, Art Coley, and Urban Air Adventure Parks Chief Franchising Officer, Josh Wall recorded. In this webinar you’ll learn more about the value of budgeting along with some great nuggets to help get your recruitment budgeting off to the right start.
