Cutting in the middle man
A customer-focused environment is something that all business owners should strive to create, none more so than those who manage firms that deal exclusively with other companies. Gareth Samuel investigates why investing in a business to business franchise gives owners more time to forge a lasting, mutually beneficial relationship with clients.
W.C. Fields once said of the showbiz industry: “never work with children or animals,” and I imagine, were he a small business owner struggling to deal with the ever changing whim of individual consumers coupled with the chaos that technological advances present, he may well have warned against working with the general public instead.
In truth, from a purely statistical point of view, we consumers are a peculiar group and are somewhat difficult to predict. A business owner could open the best ice cream shop in the world, but it may be forced to close down because his sign is painted the wrong colour or because it is not fashionably decorated. Often much easier to work with and predict however, are businesses and their demands. Dealing directly and exclusively with business owners means less individual customers, bigger contracts, traditionally fewer complications and much more besides.
To enter this holy trinity of less complicated trading, a range of business to business franchises offer opportunities for experienced investors, with drive and ambition, to join them – such as Driver Hire, one of the UK’s leading logistics recruitment franchises. By gaining large contracts with businesses and supplying drivers when they are needed the franchise has been able to grow rapidly over the past few years.
Business to business franchising is a diverse category, from business consultancy to directory or website to commercial cleaning opportunities – whatever sector you are interested in, there is undoubtedly an opportunity available in or around that area. Commercial cleaning franchises are one of the most common and indisputably popular franchise types available on the market today, their services are professional and demand for them is increasing. According to Entrepeneur.com, in the U.S. they are among the fastest growing franchises despite the recession directly affecting their fortunes – in fact all of the top ten commercial cleaning franchises on the website’s list feature in their Top 200 list of overall franchises.
One such franchise with a customer base made up mostly of businesses is Dublcheck Commercial Cleaning Services. The business has been in operation for more than 20 years and was built up from scratch by Pioneering founder, Carol Stewart Gill. She explains: “It’s like a brick building business – once you have one contract then the next, and so on, you keep building and you know exactly what you are going to invoice every month.” This progressive scalability has allowed many franchise owners to become wealthy as Dublcheck investors. One such franchise owner, Ken Holland reiterates the progress he has made personally under the Dublcheck umbrella. He says: “I decided franchising was the way to go when I was made redundant from my job in agriculture in 1998. I wanted to get involved in a repeat business industry that would provide a sensible income. I am now at the point where my mortgages are almost paid off and my monthly income requirements are dropping so I can plan to do the things I have always wanted to do, such as going to Australia.”
However, any business to business franchise’s success is directly dependent on business activity being fruitful. During this infamous recession, which has gripped the UK economy since 2007, business to business franchises have suffered. Hence now is a great time to buy into one of the range of respective franchises that have survived the economic difficulties – as Britain emerges from a crippling recession, business activity is likely to flourish once again, paving the way for extended success of franchises in this area.
Accountancy franchise, TaxAssist Accountants has developed into one of the most successful franchises in the UK after making smart choices with regard to the modernisation and streamlining of what was already a very good business model. TaxAssist gains almost all of its trade through businesses. Karl Sandall, CEO of TaxAssist Accountants adds: “We’re bucking the trend by offering a welcoming, straight talking approach, with accountants in shop-front offices right on the high street. We celebrated our first million pound franchise resale last year, achieving a multiple of 1.25 against an accountancy industry average of 0.8 to 1.0 and have now embarked on an international expansion drive, exporting our business model to Canada, the U.S., New Zealand and Australia.”
In addition to accountancy franchises, one area that is proving extremely popular with investors currently is business consultancy. ActionCOACH is one franchise that has survived the recession through professionalism, diversification and resilience. In 2013 the business was nominated for a host of franchise awards and as business activity begins to buzz once again, it is likely to be even more successful in the near future.
Franchise Manager for Driver Hire, a leading logistical recruitment business, Kasia Baldwin, explains that working directly with commercial customers has clear financial advantages: “One advantage of a business to business franchise over a customer-facing franchise is that you can quite often avoid the higher fees associated with leasing high street retail units. Whilst you probably won’t be able to run your business from home, a B2B franchise like Driver Hire can be run from a serviced office complex, as customer meetings tend to take place on the customer’s premises. Also a B2B franchise may often provide a service and not a physical product. This means you don’t have to manage or store large amounts of stock, which can be difficult and ties up a lot of working capital. When considering whether to look at a B2B or a B2C ask whether you would prefer selling to businesses or to the general public as the selling style and techniques are quite different.
“Overall it’s important for any potential franchisee to look at the franchise types that will fit their desired lifestyle and family needs as well as something that suits their skill set.”
When looking for a business with real scope for expansion, it is vital to look at the demand for your chosen business within an area or market sector. While the Internet and logistical advances have broken down geographical barriers like never before, there is still no substitute for face-to-face meetings and when dealing with businesses directly, CEO’s will expect this level of service at least. Working directly with businesses allows more time and effort to be put in to each client through dedicated account managers and advisers, business to business therefore is an area where people with proven business acumen and genuine compassion tend to succeed.