What Impact Will SBA Funding Have on Franchisees?
An important step in becoming a franchisee and joining the world of small-business ownership is ensuring you’ve got strong cash flow. One of the top reasons why many new companies fail is because they’ve run out of funding.
Recently, the U.S. Small Business Association received the go ahead from the U.S. House of Representatives to remove the cap on its loan program. This program allows small-business owners, including franchisees, to get access to larger amounts of capital, which helps improve chances of success. According to Franchising.com, the bi-partisan vote increased funding for SBA loans to roughly $23.5 billion.
The increase in funding came about after a strong push by International Franchise Association leaders requesting a larger allocation on behalf of the Fiscal Year 2015 lending authority for the Small Business Administration's 7(a) loan guarantee program.
How Access to Capital Impacts Hiring
When franchisees are able to keep their cash flow strong and uninhibited, they have few restrictions on growing their businesses. A major component of this is payroll. Funding through the SBA opens up opportunities to invest in the right hiring strategies and tools. Consider the huge impact that access to capital has on job growth:
"For every $1 million in lending to a franchise, 40 new direct and indirect jobs are created - a sizable return on investment,” explained IFA President and CEO Steve Caldeira, CFE.
However, to ensure that this job growth spurred by franchise funding goes as far as it possibly can, franchise brands need to implement the right tools and strategy.
Where to Invest Your Capital for Hiring
It shouldn’t be surprising that franchisees frequently cite issues with recruitment. In fact, our research found that 75 percent of franchisees had problems in this capacity.
Many of the issues stemming from hiring result in poorly performing franchise locations. It takes the right tools and planning to find, attract and bring on board the best talent to make a business successful. At the same time, recruiting is a painstakingly time-consuming process when franchisees don’t have the requisite technology to reduce time spent on repetitive tasks, including:
- Posting jobs to job boards, branded career sites and social networks like LinkedIn
- Screening applicants to gauge whether it’s worth the time to pursue the relationship further
- Performing multiple levels of background checks to ensure the people applying are who they claim to be
- Checking references to validate a job seeker’s qualifications
When a franchisee doesn’t have access to the tools that eliminate burdensome, manual processes, these duties will continue to build up and cause a bottleneck – and ultimately, negatively impact the business.
How Hireology Helps
From candidate assessments to interview guides and scoring resources, Hireology has a wide array of tools that help franchisees make the best hiring decisions – and make the most of their capital by limiting unnecessary expenses.