With the company store doing well, and the desire to expand your business, you will likely consider self-expansion as your initial method for growth.
It only makes sense, as your managing and funding the growth of your business puts you in complete control, and makes you the primary benefactor of the value increases along the way. Expanding on your own, however, has its dark side. First, you and you alone (or with secured or equity shared capital) will have to fund the entire costs of expansion. Depending on your business model, expanding by only a few units could amount to millions of dollars in new capital investment. Further, expansion urges usually come at a time when owners are just beginning to feel the positive cash flow effects of their successful ventures, so facing the prospect of significant reinvestment and sacrifice cannot come at a worse time. Aside from the capital expense, let us not disregard the challenges associated with recruiting, hiring, training and retaining high-quality management and staff to operate the additional locations developed. Remember, in most cases, there is only one owner, and taking on any material expansion strategy of your own means that you are going to be faced with the senior management and operational aspects associated with each location. Your ability to hire and keep good employees will be critical to your self- expansion success and if doing so is outside your normal comfort zone, then it is recommended that you either defer this skill to another executive or select an alternate expansion method. With money and management discussed, there still remains a fairly daunting list of tasks and responsibilities facing the owner that chooses to expand independently. They include, site selection and real estate or lease negotiation and financing, general administration, public relations, advertising and crisis management. As each location is being developed and comes online, the time commitment and task list will grow accordingly for the owner. As you can see, considering the money, time and risks, self-expansion is a significant achievement for any business owner. Franchising, by contrast, enables owners to leverage the capital and time resources of their franchise “owners” and thereby expand their brand while mitigating the total risks to their capital, their current business assets, and their calendars. If franchising is right for you, contact us and see how we can help to make this transition more seamless. The post Franchising a Business appeared first on The Franchise Builders.
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For some business owners franchising is too large a personal sacrifice. One obvious choice for the future of your business is to maintain your current business course and focus solely on your current existing business location or locations. This may not be the right decision and it’s clearly the least dramatic, but there are benefits to staying the course.
How To Start A Franchise First, the cost and time commitment required in franchising a business can be excessive, with the costs totaling more than one hundred thousand dollars, and in some cases, taking over a year to complete. While there are certainly many methods available to cut costs and save time, by no means is the franchise development process an inexpensive, quick process to complete. Secondly, becoming a Franchisor requires a significant shift in your current managerial functions. This means that you will no longer be the “owner-operator” of a private, local business. You will quickly transform your daily role into the role of the “the Franchisor,” which requires the use of an entirely new skill set and an abandonment of your current role in the business. While this can be a welcome change for many would-be Franchisors, many find themselves unprepared for the sudden role change and find it difficult to “let go” of their current business operations. Similarly, many owners are so vital to the success of their business that shifting their focus to the franchising process can prove threatening to the success of the original business locations. New Franchisors must firmly believe that taking on a more “executive” approach to their business and focusing on the management of a large, geographically distributed group of Franchisees, is more appealing than the routine operating responsibilities of their current business. Once the commitment is made to franchise, you will be forced to either stay the course as “Franchisor” or hire an experienced executive to manage the growth of your franchise so you can return to the daily management of your original business. Being an entrepreneur most of my life, I feel this point could be among the most significant factors for a business owner considering franchising. When I speak personally to each of my potential clients, I make it a point to visualize this aspect by asserting to them that they must be willing to “walk away” from their current way of doing business, and that they will largely no longer be materially involved in their business as they have been accustomed. Further, I ask each of them to imagine never returning to their store, restaurant or other business and greeting customers, vendors and employees again in the same way. I ask them to imagine their current location(s), one day becoming a franchise unit itself, which is often the case, and further assert their future as being limited to being a Franchisor. Not a pizza vendor, childcare service provider, dry cleaner operator or another business owner? If not, I ask them again if they think franchising is right for them and their future happiness. There are many things to consider before taking this step, but if you’ve decided that you’re a good candidate for franchising and you’d like to make a similar move, contact us and see how we can help you on your way to becoming a franchise owner. The post Start Your Own Franchise appeared first on The Franchise Builders. The process of developing and also applying a franchise system calls for specialized attention and emphasis from people that have remained in business of franchising as well as licensing as well as collaborated with companies making the change from a company had chain into that of a independent distribution design.
When evaluating franchise consultants to deal with a business making the transition into the independent distribution model, it is necessary to deal with consultants that have real experience in the area of franchise advancement. This is a vital element of assessing a franchise consultant because they need to have experience collaborating with new companies in this area from the ground up. It is an incredibly different ball of duties and also experience when a person has dealt with a fully grown and also steady franchise system that has remained in business for many years as opposed to somebody who deals with business making the primary step into the world of independent distribution versions. Franchise Consultants come in all shapes and sizes. There are large firms that have actually beened around for years dealing with much of the sectors most successful companies. These companies, while skilled and well-decorated have the tendency to be less alert to smaller companies and will certainly not provide details, concentrated on smaller sized groups entering the franchise area. There are additionally franchise consultants who have actually operated in the field and also have actually held positions with large, recognized firms. They take their experience to the field of franchising and also offer consulting services to brand-new or existing franchisors. These consultants are a good fit for existing franchise companies that need support or guidance in certain elements of their system's administration. There are also record development consultants that create paperwork to be utilized for starting a franchise organization. These organizations supply documents needed to offer a franchise in a design template format that can be become fit any kind of brand-new version. These organizations generally give little support and also consultative guidance for a brand-new creating company, but do provide the paperwork at a cut rate price. There are likewise franchise consultants in the area that have smaller outfits that concentrate on the advancement procedure with a small group of concentrated consultants that work in tandem with a brand-new franchise company. The advantage to these teams is usually that the financial investment is more in accordance with just what an expanding firm could afford as well as typically these companies will certainly also assist in sales and new business development for finding and closing sales. For a small company getting in the area of franchising, these normally supply the most engaging opportunities being that they will certainly be available as well as much more very closely connected to the success of the new growth program. There are many choices and opportunities for different kind of consultants. The integral part is to have in depth discussions as well as research study on each to ensure that you decide based upon your requirements and choices. Franchise Consultants have a large range of services they can supply and need to provide to a brand-new business, personalities, designs and also choices need to be thought about before making the transition right into the sector. |
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