There are many skills required to run a successful business, so much so I often hear entrepreneurs referring to themselves using the adage ‘Jack of all trades, but master of none’. While we would like to consider ourselves as ‘masters’, too often we recognise we require support with many of the skills required to run our businesses.

There are core skills in running a business, which for many are non-negotiable, for example your franchisor will require you to be operationally excellent in running the franchise in accordance with the brand standards. You will receive training on how to do this, and ongoing support as your business grows.

Unfortunately, often the training doesn’t cover, or doesn’t cover sufficiently the financial skills you will need. For example, how to budget, or build a cashflow or read a financial statement. While the day-to-day accounting can be outsourced (to a qualified person or an app), this doesn’t replace the need to understand the daily changes within the finances of your business. This is particularly critical during periods of fast growth as well as more challenging economic times. Close and regular monitoring of the inflows and outflows will help you to understand the financial pressures on the business and enable you to plan more effectively.

Great businesses sometimes fail because the owner or manager has encountered an unexpected cost or change in revenue and wasn’t close enough to the numbers to realise the underlying financial dynamics had changed and thus wasn’t able to take pre-emptive action.

Lenders and other finance providers regularly ask for budgets or cashflow projections, and we know preparing a budget is often considered an art not a science. However, while we know in fluid economic environments budgeting can be challenging, there is a skill to being able to gauge demand and turnover within your business, as well as outlining the linked costs to those sales. Businesses’ which perform well when compared to their budgets demonstrate the owners and managers have a strong understanding of the financial dynamics and help to build confidence in their ability to run the business well.

Building and developing these skills will take time, but there are lots of resources available to help you, both from your franchisor, the BFA or from your lender or finance provider. If you would like more information on cashflow planning, then please contact the HSBC Franchise team franchiseunit@hsbc.com or you can find more information at https://www.business.hsbc.uk/en-gb/corporate/campaigns/sectors/franchise