Millennials and Technology
It’s time to start thinking about technology for franchising success. Millennials already are.
By Garrick Brown
Gen X needs to look out because the younger generation is quickly outpacing them in the business ownership arena. Seventy-two percent of millennials would like to be their own bosses, with a hearty 24 percent already running or making plans to run their own businesses, according to findings by North Star Research for Small Business Majority and Young Invincibles.
These dynamics show a clear opening for a new generation of franchise owners.
With lower barriers to entry thanks to speedy capital from online lenders and even their wealthier baby boomer parents, coupled with a greater desire for flexibility and entrepreneurship, millennials are quickly becoming the most sought-after generation for franchise operators.
As millennials gain more traction in the franchise world, older generations are struck by how millennial-owned franchises warmly welcome innovative technology tools. Born and raised on technology – especially mobile apps that provide quick, easy solutions at their fingertips – millennials are used to utilizing technology to access everything they need and provide real-time solutions for any problem.
Older franchisees can be reluctant to change and even eschew technology that could simplify or improve their businesses due to the fear of the unknown. However, millennial franchise owners refuse to ignore new opportunities that can streamline their businesses. They have a different approach to workplace culture and expectations thanks to an openness to technology.
A recent study by PricewaterhouseCoopers shows 59 percent of millennials rate having state-of-the art technology at their job as important to them when considering a new role, and 78 percent said access to the technology they like to use makes them more effective at work. Furthermore, 41 percent of those questioned said they would rather communicate electronically than face to face or over the telephone.
When they start or acquire a franchise, millennials are incorporating typical technology tools like POS systems, fleet-management apps, customer-loyalty programs and digital signboards. Yet even more are taking it a step further with new cloud-based solutions and machine learning software that are dramatically improving operations and lowering costs.
No Application Too Small
One might think, “Machine learning and cloud computing for sandwiches, oil changes or ice cream cones?” Yes, even here big data applies. For both large national chains to smaller local franchises, these technologies provide quick, cost-effective ways to improve sales and have more control over logistics.
Using the cloud, a business can store, manage and process all of its data for easier access and analysis. This is valuable because it allows a franchise owner to manage staffing and inventory better by leveraging historic data, right at their fingertips. For instance, a carpet-cleaner could easily see which days of the week are the busiest and plan their staffing and materials accordingly, and well in advance so they avoid losing a customer due to lack of staffing or equipment.
Additionally, owners can allow access for employees, managers or other personnel who need to review company data, empowering more team members to access things such as expected schedules and sales volumes each week. Plus, since the cloud solutions are backed up off-site, there is a reduced threat of viruses, hackers and other cyber-security issues.
Millennials, avid users of cloud tools such as Apple iTunes, Amazon Kindle and Google Docs, are comfortable and even expect this kind of data access, storage and security. A granular level of detail available at their fingertips is particularly valuable to this growing group of franchise owners.
But access to a vast amount of business data is just the first step of a successful millennial franchise owner. Tech-savvy owners are also using machine learning technologies to transform their critical sales forecasting.
Customized Sales Forecasting
Any franchise owner can attest to how business operations can be critically impacted when forecasts are off. Everything from staffing levels to ensuring enough product is available to meet expected demand relies on forecasting. Looking to avoid long nights agonizing over sales forecasting spreadsheets and uploading reports, millennials are relying on software with machine learning to customize sales forecasting for them.
Machine learning technology automatically analyzes a franchise’s data, and can instantly and directly interpret historic sales data to predict precise forecasts. For instance, machine learning can analyze years of ice cream cone sales and easily determine not just the busiest days, but even the busiest hours of the day, so a manager can staff appropriately. This might seem like a simple task that an experienced franchise owner could handle, but in fact, the technology behind machine learning can pick up on unpredicted spikes such as unusual weather, an event nearby, traffic patterns or even national news, all of which impact forecasts.
Machine learning technology allows managers to provide feedback and make necessary adjustments, which the technology understands and corrects for future predictions. It’s a learning experience and the technology gets better the longer a franchise uses it, creating a very powerful analytics tool for multi-location businesses. Plus, smarter machine learning tools make forecasts even more accurate by integrating a variety of external factors such as the day of the week, the weather, current events/holidays and other outside influences to more precisely forecast a business’s week.
Millennials are generally quick to embrace technologies such as cloud computing and machine learning, which are proven to help accurately forecast and analyze franchise data. As a result, they have an advantage in making their franchise a success, and in managing multiple franchises. In this case, franchise owners of all generations can learn something from the young kids just coming up the ranks.
Garrick Brown is co-founder of Sales Temperature.