As franchisees, you go to a lot of trouble to prepare your budgets and identify the key performance indicators (KPI’s) that you will need to meet to make the profit you desire.
The problem is though, once you have identified these KPI’s how do you ensure that you meet them? Well that’s easy – you share the burden. You share your KPI’s with your team and you make them accountable to meet them by way of an in-store KPI dashboard.
So how do you communicate the required KPI’s? It’s easy, in the roster. By costing your labour and showing this in the roster you are starting your team on a journey to success. It is as easy as entering the co-ordinates into a GPS. If you compare your roster to a GPS then you must first set the destination – this is your required sales target for the day. Next you have to set the route that you are taking and that route is by meeting these KPI’s – labour cost, average hourly rate and sales per labour hour.
Sounds hard, but really it’s not. Just enter formulas into an excel spreadsheet and you are on your way. To identify the required KPI’s, allocate the shifts in the roster, cost them out to a dollar figure, divide that into your sales to give you a labour percentage. Next divide the number of labour hours used in that day into the sales to get your sales per labour hour. And finally divide the number of labour hours by the labour cost to give you the average hourly rate. Even easier still download my template and the hard work is done for you.
Once the roster is prepared (oops route defined) then it is over to your team to follow the GPS. As the team trades during the day KPI’s can be constantly monitored. If your franchise has a great point of sale system these KPI’s can be identified as you trade, if you do not have this capability, then it is just a matter of training your team leaders how to use your excel spreadsheet.
At the end of the day, when you have “reached your destination” it is a simple matter of having your team record the actual KPI’s on a dashboard which makes them accountable. Kind of like completing the log book in your company car.
Being a franchisee is a journey and it seems you are learning all the time. Take your team with you on this journey to ensure you can enjoy the trip.
To help you implement a dashboard into your store, simply download all the tools here I just spoke about including KPI monitoring template; KPI Labour calculator and the all important KPI Dashboard.
Elizabeth Gillam founder and CEO of Franchisee Success creates High Performance Franchisees. Having owned and operated three franchised food businesses; Boost, Healthy Habits and Bucking Bull; she knows what it takes to operate a profitable food franchise. In her recent book, Upsize your PROFIT – 6 steps to running a profitable food franchise she outlines how franchisees can ACE their franchised business unit.