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According to the International Franchise Association&nbsp;<a href="https://www.franchise.org/franchise-information/franchise-business-outlook/2022franchising-economic-outlook?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-budget-for-your-sales-goals-2719217" target="_blank" rel="nofollow">2022 Franchising Economic Outlook</a> report, franchising growth will expand by over 2% this year, adding 17,000 establishments to the market and bringing the total number of franchises to 792,014. While some franchise expansion can be attributed to existing business owners purchasing additional units, franchisors also have to consider outward marketing to bring new franchisees into the network.“There are many factors involved when making this decision,” explained&nbsp;<a href="https://www.linkedin.com/in/taylor-gregory-4b9869178/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-budget-for-your-sales-goals-2719217" target="_blank" rel="nofollow">Taylor Gregory</a>, director of franchise development at&nbsp;<a href="https://unitedfranchisegroup.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-budget-for-your-sales-goals-2719217" target="_blank" rel="nofollow">United Franchise Group</a>. “Questions come to mind like ‘How well established is the franchisor? Are they available in all states? What areas are they looking to target, and where do they want to be in the next one to three years?’”Naturally, the answers to these questions can serve as guidance for the budgeting and sales process, and each approach will be unique to the individual franchisor.The process of budgeting for franchise sales is similar to any other sales budgeting process. Evaluate how much a single unit will bring in return, and, using this number, decide how much of an upfront investment a single sale is worth. Then, using this number and an estimated growth goal, you can determine the total sales budget available for the allotted period of time.With the correct infrastructure and corporate support, franchisees can set ambitious goals and leverage preparation on the front end for longer-term success.“At United Franchise Group, we have the support and training already in place, so our sales goals can be high. In fact, we very much believe in setting high goals at our company. That means when we say our goal is to sell 1,000 franchises this year, our team is bought in and set up to make that happen,” Gregory said. “That starts first with Franchise Development to make sure we have a budget in place to help us generate enough leads to hit those goals. It also means we need to have a sales team in place that can manage the lead flow coming in and close the deals that each brand has for the year.”Deciding where to direct funds and energy is another critical aspect of the process, and Gregory explains that this is largely up to where the brand’s target franchisee is.“No brand should be marketed exactly the same,” she said. “We work with a variety of vendors, and not all our brands use each of them. Our number one priority is establishing a franchise development website for the brand.”A franchise development website should have a good content strategy, leveraging the right keywords, a well-fitting voice or persona and easy navigation.Gregory recommends supplementing the development site with paid social media, portals, trade shows and consultants.“There’s a variety of creative ways you can target your franchise’s ideal audience. You’re going to want to make sure you’re monitoring the spending with each of these vendors on a monthly basis and tracking how many deals you’re getting from each. This is the data you’ll use to make adjustments to your marketing efforts,” she added.Like many aspects of business, there is no single answer to how much should be spent obtaining a single lead.“We work backward in our approach. In strategic planning for the upcoming year, we ask the team, ‘What is the brand’s unit sales goal for the year?” Gregory explained. “We break those goals into quarters. Depending on what those numbers are, we identify how many leads we need to generate based on our set lead to close ratio.”Periodically checking in with the sales team and vendors allows the space to evaluate current practices, adjust spending and targeting methods, and make changes early enough in the process that cost per close does not exceed an amount that makes sense for a given brand and its available resources.&nbsp;

How to Budget for Your Sales Goals

1851 Franchise

Considering a target cost per close number, developing a marketing strategy that caters to prospective franchisees, and consistently reevaluating the approach for efficacy allows franchisors to build the most productive budget.

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