Getting on track with finance
Tracking network finances means a franchise system is making the most of its potential and helping franchisees better their business, writes Chris Ridd from Microsoft Dynamics Australia.
As the Reserve Bank officially declares the end of the recession and the economy picks up, it's interesting to note that a high proportion of last year’s retailing success stories in Australia were franchises. Recent data suggests that Australian franchises have done, and are continuing to do well, even against the difficult conditions from the global economic downturn.
A PricewaterhouseCooper's report, Franchise Sector Indicator 2009, found the average franchise's revenue grew by four per cent and profit rose by one per cent last year.
Brian Walker, Retail Doctor, says "Franchises have shown that during a difficult year, they have the perfect mix of properties. Their strong brand name is instantly recognised by consumers, while individual franchisees display high levels of passion and are small enough to be able to stay close to their customers, enabling them to be agile and adaptable to their customers' needs and wants."
In retail, the secret to success has long been the art and science of not only selling to customers - but getting them to come back. It's critical therefore, to know your customers and business inside out. Unsold stock is lost revenue so it’s crucial to have up-to-the-minute data in order to assess which product lines are, or more importantly, are not selling and implement changes accordingly. An IT system that delivers accurate and up-to-the-second information at the click of a button is absolutely fundamental to driving business success.
Hudsons Coffee has 60 stores Australia wide and currently has a rapid growth rate of 10 new stores per annum. With the business expectation that their growth rate could accelerate to 15 to 20 stores per annum, it was critical for their financial team to know exactly how the business is tracking at all times by ensuring they implemented a strong IT solution that could deliver results as well as adapt and grow with the business as it continues to expand and demands change.
Dianna Butterworth, general manager - finance, Emirates Leisure Retail Australia (owners of Hudsons Coffee) says: "Our three key requirements from a new IT solution were that the scalable technology would grow with the business; it was a solution that was accepted and supported by the staff; and a system that had the capabilities to deliver all the financial solutions to the business."
The holistic approach taken by Professional Advantage and Microsoft gave them an edge over the competition, reveals Butterworth.
"With the new IT solution, we now receive financial results every day. This gives us an up-to-date insight into the financials of the overall business, helping us to gain a more detailed understanding of where the business and individual franchises can be improved.
"Furthermore, where it previously took 15 days to create fully fledged financial reports, it now only takes three days, meaning business decisions can be implemented two weeks earlier than before. The Dynamics GP Solution saved us time in reporting. The new system also saved us in personnel costs, which we would have had to incur to cope with the increased workload. The solution was cost effective for a small to medium enterprise and very user friendly. Our staff also found the new solution well presented and logical, which saved us further time and money in training."