This time of the year the multi-unit and multi-brand owners I advise on their growth strategies are winding down the current year and call to ask what the actionable trends are coming up in the next year that they should be positioning their investments for now.
Currently operating businesses will need to adapt to trends in staffing and supply chain, in most cases these are clear and solvable puzzles, though sometimes require a little creativity from owners and franchisors. Most operating franchises have made these adjustments and are thriving today.
As we look at the market there are opportunities that already existed as well as those that are trending upwards now. Some are likely shorter term, others longer term so as we look at growth opportunities we need to keep in mind that one brand may have a shorter optimum investment timeframe than another.
American families saved at a very high rate, by some accounts they have put an extra $2Trillion into savings over and above the normal saving rate during the past couple years.
They are now spending that money fast, catching up on experiences missed. That travel, dining, shopping, etc is driving the economy and inflation.
There are higher costs for some goods and supplies.
Employee turnover will be higher as employees are leveraging their new power from being in high demand.
Entry level pay will be higher and more jobs will be created at this level and in the mid tier. Those employees will have more money to spend.
Stores that have to keep a lot of inventory on hand will have to plan carefully and buy further ahead.
Farming has never been easy, but has been made harder due to events out of the control of farmers.
What do you do with all of that?
It’s time to grow. Times of greatest turmoil are where the biggest opportunities exist.
As you look at the market you will see current needs that people with money and desires have. They want experiences like travel, dining out, going to the gym. They have increased home value and want to capture it and move or just fix up what they have to enjoy their time at home more. They may have an increased focus on health and wellness. Their kids may have the need for tutoring assistance to get back on track in school. Their parents may have a need for home care if they want to avoid assisted living for a period of time.
Let’s dive into some key areas and because space is limited here, I will take your calls and emails to answer your strategy questions, my info is below.
Food, while always in demand I would be cautious in this category and primarily focus on fast food or quick service meal options. Full-service restaurants have challenges around real estate and staffing. In some cases frozen or baked treats can be added to the list but remember they are highly cyclical so be in early and out fast.
Gyms/Fitness/Wellness, especially boutique options, were strong going into Covid and are scaling up again fast. Some of the brands in this space didn’t just survive the past couple years, they thrived and added units. A lot of us are coming out of the past couple years like it was one big holiday buffet, the growth of that business could be measurable as we get active again.
Home improvements are at all-time highs. Three things drive that growth. Home value increases are driving both sales and improving living space to enjoy. We are seeing companies focus in both of those directions. One franchise does nothing but prep homes for sale.
It has always been hard to be a homeowner calling the local independent Chuck in a Truck home handyman guy. They barely resemble a business, are hard to track down, hard to manage and sometimes leave you with a bad experience. Consumers want a predictable outcome, good experience and quality work. This is a great time to look for top players in this space.
More and more we are seeing the medical community try the franchising model. They are potentially as perfect for each other as chocolate and peanut butter. Choose carefully as the quality of franchisor matters, medical talent can be hired, but this space has opportunities.
On the horizon we see tech companies blending with the franchise model as they discover franchisees with a vested interest in their business and local market can do more than employees or overseas call centers.
There is more detail to note in these categories and other markets not outlined here. The key idea is that every market has needs and customers. If you look closely at trends and where those needs are you can find business gems that will be great additions to your portfolio.
What is your success story? Let’s go find it!
George Knauf is a highly sought after, trusted advisor to many companies; Public, Independent and Franchised, of all sizes and in many markets. His 20 plus years of experience in both start-up and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution.
Contact the Franchising USA Expert George’s Hotline 703-424-2980.