In today’s volatile and ever-changing business landscape, resilience is essential to the success of any organization. Jeff Bannon, Succession Planner at The Rawls Group, and Aicha Bascaro, President of the American Franchise Association, recently had a video conversation that emphasized the importance of building resilience in your business through key steps for organizational preparation and understanding unit economics.
Business owners must understand their current reality and perform a SWOT analysis to identify their strengths, weaknesses, opportunities, and threats. By doing so, they can create a realistic roadmap for their organization’s future success.
To build resilience in your business, it’s also crucial to create a separate asset base from the business. This reduces dependence on the business and prepares the organization to run tightly. Business owners should also have a deep understanding of the unit economics of the model they are managing, which means knowing the critical metrics that drive profitability, such as revenue per employee, gross margins, and customer acquisition cost.
Profit and loss statements should be used to make smart decisions. These statements provide insight into the financial health of the business, allowing business owners to identify areas for improvement and make strategic decisions to optimize profitability.
Another important step is understanding the unique dynamics of your business model. By recognizing the unique factors that affect the success of your business, you can develop tailored strategies to address them.
Finally, tracking performance and key performance indicators (KPIs) regularly can lead to growth opportunities and effective succession planning. By setting and monitoring KPIs, business owners can make data-driven decisions that lead to long-term success.
In brief, building resilience in your business requires a multi-faceted approach that involves understanding your current reality, creating a separate asset base, understanding unit economics, using profit and loss statements to make smart decisions, understanding unique dynamics, and regularly tracking your performance and KPIs. By implementing these key steps, business owners can build a strong and resilient organization capable of withstanding any challenge.
For more insight:
Visit the “Franchisee Succession: How to Grow & Build Value” discussion page or select one of the additional episodes of the series below:
- Franchise Success: Understanding Your Goals and Planning for the Future
- Understanding the Difference Between Estate Planning and Succession Planning
- Challenges and Strategies for Franchise Growth
- Key Strategies for Retaining and Attracting Talent in Today’s Business World
- Expert Advice for Franchise Business Growth and Management
- Preparing for the Future as a Multi-Unit Franchisee
- Managing Inflation: Key Considerations for Franchise Owners and Business Leaders
- American Franchise Academy: assistance for franchise leaders in building a successful growing enterprise so that they can achieve their business & financial goals.
- Succession Readiness Survey: A 7-minute investment in time will put you in an informed position of opportunities many business owners overlook, impacting business value, growth, and lifestyle, and ultimately achieving your vision.
- Contact a Succession Planner: The Rawls Group can help you with insights and other resources and see if it makes sense to work together. At the very least, in 30 minutes, you may get some ideas you can apply to your business immediately.
Business value is tied to performance. Top talent, strategic vendors, and creditors will be influenced by the organization’s competitive advantage in the marketplace. Traditionally, transitions generally bring with it a drop in profits. It is crucial that your business is operating at peak performance in order to fulfill cash flow needs and expectations during times of transition.
Click the following links for more drill-down resources on Business Performance.
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We can help you with insights, other resources, and see if it makes sense to work together. At the very least, in 30 minutes, you may get some ideas you can apply to your business right away.