Franchisees have various levels of business acumen; therefore, it is critical to regularly assess how knowledge and skills are being advanced to drive business growth.
Business acumen is a set of critical skills that increases the ability to make sound and informed business decisions to turn goals into accomplishments.
Someone with strong business acumen can focus on the actions that will make the most difference to the business. The decision on how to act includes considering the consequences of those actions, making appropriate adjustments if things don’t go according to plan, and keeping those impacted by decisions in mind.
Consider these 3 strategies to strengthen business acumen in your franchise network.
- Understanding the Business Model A foundational component of business acumen is a deep knowledge of the franchise business model. This includes not just how a franchise makes money, but a deeper dive into key business drivers, such as people, and the business life cycle.
- Utilizing Key Metrics Every franchise business model has financial and operational metrics. Metrics include key performance indicators (KPIs) that affect the overall health and sustainability of the business, such as revenue, profit and lifetime value of the customer. Understanding how to impact KPIs can strengthen business acumen significantly.
- Offering Professional Development To effectively support franchisees, it’s important to provide professional development opportunities related to business acumen. Best practice suggests starting with a solid basic level and then building upon it for continuous improvement. Strengthening business acumen and overall skills for franchise support teams increases confidence and credibility when guiding franchisees. This leads to the ability to guide franchisees on developing their own business acumen and effectively driving their own business growth.
Strong business acumen is a key success factor for leading franchise networks. It is one of the four foundational components in FPPG professional development as well.
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