Minding your own business ...
Tony Urwin reflects on how this summer could be the perfect time for business owners to discover their future through franchising.
Over the last year, those of us in business have been forced to weather the storm as the very real consequences of a global recession and political uncertainty have played out before us.
For many businesses, profits have slowed as customers become used to the reality of living through another recession but life certainly hasn't stopped. While few ventures have escaped the storm unruffled, those who have survived must now look towards the future. As we have seen before, franchising can be the perfect route for business growth in challenging times.
Recent market upheaval has offered business owners a rare opportunity to look objectively at their operations and identify those activities that are profitable and sustainable, and those which are not. By focussing efforts on these profit centres it is possible to streamline the organisation and discover the path that leads out of harm's way. For the would-be franchisor, these are the activities that your proposed franchise network should be built upon.
Increased unemployment provides a willing stream of enthusiastic investors, eager to prove to their previous employers that they can make it on their own. Unlike past recessions however, where substantial redundancy payments were made, today's investors are unlikely to have huge financial assets, or the ability to borrow heavily from the bank.
When designing your franchise, concentrate on the one or two areas of business that generate the most profits and package this as the franchise, with as low a price tag as possible. This will help you to recruit your franchise network and will give you an opportunity to add additional income streams across the network as the market improves. The franchisors' long-term business plan should show that they earn more money from the ongoing sales activities of their franchise owners than they do from the initial sale of franchises. Having extra earnings opportunities up your sleeve will help you to maintain a happy and healthy network in the longer term.
Remember, when you develop a franchise network, you are effectively using someone else's money to grow your brand. Admittedly, that also means accepting a smaller share of the profits, but isn't it better to have a small percentage of something than a large percentage of nothing?
Before embarking on any expansion strategy it's important to do your research and identify the best sources of help and information. A specialist franchise consultant can perform an initial assessment of your business and will help you to identify the elements which have the best franchising potential in the current climate. They will guide you through the development of the franchise system, help you make your opportunity stand out in the market and assist with the recruitment of your franchise owners.
Over the last year, I have been lucky to work with some inspiring and dedicated business owners who have embraced the ethos of franchising, despite battling the hostile climate. Together we have created franchises that will, over time, prove to be profitable enterprises for these new franchisors, as well rewarding businesses for their franchise owners.
If you would like to explore the potential for your business to follow in their footsteps, FDS North can to help you to identify the franchise structure that will raise your brand to the next level and beyond.
If you have a successful business in the North of England or Scotland, call Tony Urwin today to discover how you can achieve its full franchising potential.