Lockdown 3.0 means tough times for businesses throughout England – but how they react to the restrictions will make the difference between those that thrive and those that merely survive.
Catastrophic as the restrictions undoubtedly are for customer-facing businesses including gyms, hairdressers and retail shops, the worst thing owners can do is to go into economic hibernation and hope everything will be better in the Spring.
It will – or will be as soon as enough people have been vaccinated – but what business owners do with the few slack months forced upon them can make a significant difference to their long-term prosperity. One typical knee-jerk reaction – and an understandable one – is to slash or even axe the marketing budget as an immediate way of reducing overheads when income may be substantially reduced or even non-existent.
If the business is on its knees and fighting for its very survival, that may be one of many unavoidable and difficult decisions that have to be made. But for businesses that are cash-rich or can at least weather the storm for a little longer, continuing to invest in marketing is more than just a nice-to-have.
In the franchising world that we support at Chantry Group, businesses depend on having a pipeline of potential franchisees who will buy into the brand and the ethos and develop their own successful businesses under its wing.
Just as the NHS can’t suddenly create thousands of extra doctors during a pandemic – it would take six years even if it started today – recruiting suitable franchisees doesn’t happen overnight.
Acquiring a franchise isn’t an impulse-buy. It takes months of research, due diligence and assessment before even the best candidate is ready to take on the mantle.
So while a franchisor might not have any clients at all for the next few months, or be able to trade on a severely limited basis, the vital work of finding new franchisees to expand the network needs to carry on regardless. Knocking franchise recruitment on the head right now, while tempting for some, means that as soon as the pandemic is under control and business begins to get back to normal, there will suddenly be no potential franchisees waiting in the wings to take the business forward.
Resuming the search for them then, just at the time when the pressure will be the least bearable, means business development will have taken a massive and completely avoidable blow which could take years to recover from. For business owners who can, keeping that franchisee recruitment activity going, or even stepping it up, will ensure their businesses continue to develop and expand while rivals’ stagnate or even go into reverse.
Those who are serious about taking on a franchise won’t be daunted by yet another lockdown and, indeed, will see the opportunities for investors as prime-location properties go for a song and start-up costs are reduced by Government support.
Those potential franchisees typically look at several types of business before they settle on one, so they will be judging companies by how they handled themselves during the pandemic and whether they took a long-term view or acted like rabbits caught in headlights.
With time on their hands, too, those potential franchisees can afford to take an even closer look at the way a company conducts itself, and the vision it shows, so a company that simply reached for the pause button might find it rather harder to fill potential investors with confidence.
Our clients at Chantry Group share our view that the show must go on, even if quietly in the background, because the long-term gains are more than worth the short-term pain that none of us can avoid until the pandemic is over.