Managing cashflow for your franchise business

Managing your franchise’s cashflow as a business is a critical aspect of ensuring that your business becomes a success, especially in this current economic environment. If you don’t monitor and have the right measures to control your cashflow, you run the risk of not maximising profits.


Morne Cronje, Head of Franchising at FNB Commercial says, this principle is equally important for franchise businesses as well. Poor cashflow management can negatively impact the day-to-day operations of your franchise which may ultimately impact the business’ bottom line.

Furthermore, a good cash management strategy requires you to have a good working relationship with your bank so that they have a view of your cashflow needs to be able to adequately provide the required working capital when needed, adds Cronje.

Cronje shares tips to consider managing your cashflow as a franchise business:



  • Forecast: creating a cashflow forecast can help safeguard your business against cash flow problems. Moreover, this will enable you to forecast months where you can expect a cash shortfall and months in which you can expect a surplus.
  • Plan ahead: if your franchise generates more revenue during certain seasons, the demand for cash may differ during peak and off season. Therefore, you need to ensure that you plan ahead to ensure that business is not interrupted during different seasons.
  • Build cash reserves: build enough cash reserves to be able to address emergencies and seasonal activities. Another advantage of building cash reserves is that it will allow you to take full advantage of any credit terms you may have.
  • Invest in technology: use technology to manage your admin to ensure that your business is always in a good shape. Technology such as cloud accounting software will help you stay on track with your business finances and show you how your business is performing.
  • Outsourcing: as your business grows, you need to know when to procure services from specialists. For example, if you are unfamiliar or cannot completely read financial statements, it may be worthwhile to hire consultants who will assist you with managing the books.

Managing cash flow as a franchise business requires you to make critical decisions to ensure that business operations are not interrupted, moreover you need to be able to anticipate problems so that you can address them before they impact your franchise business negatively, concludes Cronje.

Source: Sam Mashele – FNB Public Relations Consultant Corporate Affairs
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