Recession, Inflation, and Staffing Issues Threaten Franchisees in the New Year
2023 brings a new set of challenges for franchise business owners. It is predicted that inflation could remain an issue, layoffs in the tech and other industries will continue, and the threat of a potential recession still lingers. However, with the right tools and preparation, franchise business owners can combat these challenges and aim for business growth. Organizations must put plans in motion now to stay one step ahead of potential challenges.
Throughout more than two decades of experience working in the franchise industry, I have witnessed the ongoing change and evolution of the industry. Here are key challenges to watch out for in the new year and insights into how franchise owners can prepare for any obstacles they may face in 2023.
How to Prepare for Business Challenges in 2023
1. Tackle Disruptors Head-on to Improve Your Business
Every business faces market disruptors within its given industry. These are new companies or technologies that innovate outside the industry yet impact the market at large. One example of this within my industry is prominent players like CVS and Walmart, which are major retail giants but now operate within the healthcare space. CVS Health has taken the first step in its bid to branch further into healthcare services with its acquisition of Signify Health. These partnerships set the ground for how industries will transform and reach a broader scope of people.
Outside of healthcare, the automotive field is another industry experiencing rapid change due to the emergence of electric vehicles. The trend of electric cars is also disrupting big oil companies and influencing state legislation. As more consumers turn to electric cars for greener transportation, other sectors will continue to be impacted. California even passed a law to ban the sale of new gas-powered cars in the state by 2023, allowing for only the sale of new zero-emission vehicles (ZEV) or plug-in hybrid vehicles (PHEVs). To adjust to the evolving market, car dealerships must align themselves with this trend to stay relevant and meet consumer needs. We are seeing more and more car companies coming out with electric and hybrid vehicle options to meet demands.
2. Make Sure Your Business Stands Out
With many options for consumers in any given market, it is essential to make sure your business stands out and is not overlooked by potential customers. Set a precedent for making bold moves within your company and your market. Market disruption is about breaking through the staid industry positioning and showcasing how your brand will do things differently. In the healthcare, hospitality, and other service industries, it is essential not to overlook the value of reviews on sites like Google or Yelp. Managing reviews and using constructive criticism to improve your business is a sign of good leadership and a successful business.
3. Recruit Qualified Employees to Further the Success of the Company
Finding qualified employees can be challenging in any market, especially as we continue to see mass layoffs across several industries. We can expect to see more of the same in 2023, but for those businesses that still have hiring needs, there are several great ways to recruit the candidates you need. At BrightStar Care, our franchisees have several incentives for their employees to ensure we find the best people for the job. Every year at our Annual Conference, we give awards and prizes to top-performing owners, caregivers, and nurses to spotlight some of the brightest stars within our organization.
Franchise ownership is an excellent option for anyone looking for the second act in their career.
In light of these massive tech industry layoffs and other industry layoffs, franchise ownership is an excellent option for anyone looking for the second act in their career. Advanced experience is usually not necessary to purchase a franchise — and it is helpful to start your business with the support of the franchise system behind you versus starting a business from scratch.
4. Use Creative Thinking to Overcome Supply Chain Issues
Shipping delays, delivery driver shortages, inflation, and other market factors are causing supply chain issues across multiple industries: from restaurants needing ingredients, to new businesses under construction waiting on building supplies, or healthcare organizations waiting on medical supplies. Many companies are taking creative steps to combat this problem and proceed with a successful business. Some restaurants are simplifying their menus to limit the ingredients they need delivered or shift to local suppliers. At BrightStar Care Homes, for example, we have had to source new local contractors to speed up the construction process.
5. Invest in a Recession-Resistant Franchise Business
As we experience inflated prices and a looming recession, it is essential to find a franchise business investment that will be sustainable for years. Home care franchises, along with automotive, personal care, and childcare have proven valuable to consumers by staying open and thriving throughout the pandemic.
Any franchisee, business owner, or entrepreneur needs to stay up to date on current and future trends in their industry. Staying ahead of the market and preparing for challenges allows your business to remain relevant.