By Charlotte Fantelli
Why choose franchising over going it alone when starting a business?
Any business needs these key elements in order to be successful:
– cash flow
– experience and industry knowledge
– customer trust
– management systems and a structure that works.Franchising hands you these ready-built foundations.
Here is a detailed roundup of franchise benefits over starting your own business from scratch.
Cash flow is a crucial part of any business; many start-ups fail within the first years due to lack of proper preparation and forward planning. The franchise business model has the issue of cash flow nailed twofold; one, raising finance is easier, as banks will lend more readily on a proven established business model; and two, you will benefit from forecast plans and goals with experienced business owners who have embarked on the same venture and proved the right way to do things. Meaning they will know how much financial investment is required before the all-important profit point!
Many people focus on cash flow within a business, but there are other crucial elements of a successful business, without which it cannot prosper.
For example, business experience and industry knowledge offer huge insights and cannot be cannot be gained overnight, or acquired financially. While you may be very experienced in your job sector, running a successful business requires working in areas you may not have experienced before; financials, accounting, buying, customer management, order tracking, operations and systems, staffing and HR, health and safety, to name but a few.
With franchising you get valuable access to experienced colleagues who have embarked upon the same venture and not only gained industry knowledge, but made a success of the business. This mentoring can be invaluable.
Group Chief Marketing Officer at Sage, Amanda Jobbins, told The Guardian that start-ups need mentoring and support at least as much as they need financing: “There is evidence that [mentoring] can, and does, work. 70% of small businesses that receive mentoring survive for five years or more. That is double the rate of those that don’t”.
Former Dragons’ Den investor James Caan tells start-up entrepreneurs, “It is critical to get experts on board as soon as you can. You should look for people who have already done what you are setting out to achieve, and know your industry”.
Access to mentoring, business experience and insider industry knowledge is a valuable part of the franchise business model. See our franchising facts for more.
Most marketplaces you enter will be crowded, with tough competition for exposure and investment. How will you stand out? How will you gain the attention, and trust, of potential customers?
When starting out alone this is very difficult – and in some sectors near impossible – without huge investment and lots of time.
Choosing the right franchise, however, gets you to the top of the pile! Being part of an established brand means you can benefit from years of hard-earned customer affection, brand awareness and trust.
Marketing can be an expensive part of any start-up: brand design and identity can alone cost anywhere from £5k – £150k, not to mention website design and build which can double those figures (complete with data capture, CMS, CRM, SEO and so on).
Even if you spend your cash on the best company branding, user-friendly website and system, how do you know what works, where to advertise, and then how to compete with the beast that is Google?
As a search engine optimisation expert, I can confirm that the only way to get to the top of Google is for Google to see your business as THE expert resource, the best content possible with history and page rank. How do you achieve this? By trading day on day, week on week, and year on year, gaining links in, recommendations, trust and clout. Yes, it is that time-consuming and that expensive.
Or you could buy into a business that has done this for you, a business like Just Shutters that has an exceptional franchise marketing package and has gained coveted top spot positions for industry keywords for all its franchisees so far. This is something that money alone cannot buy.
When you start out, you are likely to be a one-man operation. You may have a spouse who helps to keep the books, or a son who helps with manual labour, but it is more likely that you will be working alone. This a huge weight on anyone’s shoulders.
This is another area in which franchising really can help. Just Shutters has a system whereby your calls are answered from your designated number by our fully trained staff, your appointments are made and managed on your own calendar by our Head Office, all data is captured and you are simply given the customer details ready to go and make a sale!
After a sale this management system continues to perform, giving you the freedom and flexibility to own a fully-staffed operation from day one, without huge employment costs. You will one day want to take on more staff within your business, and we will give you the support and training you need to achieve this too.
These are just some of the ways in which a franchise business will give you help and support way beyond that of a start-up alone. For further information please do call us on 01202 233744 and see how starting a franchise with Just Shutters could give you the freedom and flexibility of being your own boss, while being part of a much bigger brand.