Franchising the best route to growth?

Franchising has exploded in popularity as a growth strategy and there are many experts making a lot of money telling successful business owners how to franchise, but is it really the best route to market?

Speaking from my own experience, having both owned franchises; worked with both franchisees  and franchisors and also having franchised my own business in the past, there are many things that the franchising experts don't tell you. For example, I do not recall anyone defining the real challenges with franchise recruitment - especially at the early stages. 

Neither did they tell me about how my systems would be challenged to the very core by entrepreneurial individuals whose natural instincts were to innovate. 

They didn't tell me the challenges with managing relationships and that the franchisee/franchise manager can be a tricky relationship at the best of times. The common ground is that the franchisee and franchisor both want to maximise the return on investment on a consistent basis, however, how they each go about it often could not be more different. 

Throw into the mix the new trend of "Social Franchising" where social and community groups either franchise their business or take a franchise to be run by the group. There are some serious questions to be asked about the concept of mixing the commercial ethics of franchising and the cultural ethics of the group. 

Firstly do the committee or management team of the community group have a clear understanding of their new role? Instead of focusing on delivering a valuable and profitable service/product to their client base, they will be spending a significant amount of time managing and supporting another group, their franchisee, with their needs, issues and challenges whilst also policing their brand. I was only talking to a franchisee yesterday who was explaining that the culture within their territory had a marked effect on the business - something the franchisor had never considered!

Secondly does the group have the correct skill set and cultural drive within the organisation to carefully select and manage another group with potentially different drives and work ethics to run a successful franchise? There is unfortunately an extensive list of failed franchises where the franchisee just didn't have the resource, skills, capital and/or grit and determination to make it.

Although franchising on the surface appears to be a relatively low cost, lower risk vehicle to grow your business, before you make your decision you need to speak to plenty of experts. Ortus run an excellent programme which will answer many questions.  Knowing what I know,  I would also advise you to take the time to speak to both franchisees and franchisors in a variety of sectors to understand the reality of what you're about to launch yourself in to. 

One thing I can guarantee you is that it is not an easy ride. Even though the team I worked with in my franchise and the franchisees and franchisors I have worked with and for are lovely people, (many of whom are still friends), they all have their own agendas which influence how they think and behave. 

My advice is to think carefully and do your research thoroughly before you jump onto the fast growth franchise express!

Image courtesy of renjith krishnan

#3 - Top reasons why small businesses fail to punch above their weight - Part 3

Here is the third reason why small businesses fail to punch above their weight. They listen to too many friends and family members with an opinion.

Everyone has an opinion and when it comes to something as interesting as a friend or family member’s business, it is pretty exciting to be asked for your opinion. However, these people have a very skewed vantage point. Firstly they only want the best for you and will therefore often not give you the honest advice. Secondly, they may not be your target audience and therefore if they don’t like the advert, strap line, offer etc,  it is irrelevant.

The only people who it is important that it appeals to are your prospects and your customers (and of course the regulatory bodies within your sector!)

Where ever possible ask your customers themselves. They would be the best source of all genuine feedback – whether you like what they say is another issue entirely!

Image courtesy of Stuart Miles

#2 - Top reasons why small businesses fail to punch above their weight - Part 2

Here is the second key reason why a small business fails to punch above their weight is that the Business phone is not answered or goes to an answer machine.

Statistics show that 80% of callers will not leave an answerphone message. If this is the case, why would you use the biggest sales prevention device on your juicy new prospects?

In this digital age any phone can be forwarded to another phone which can be answered appropriately. However even when phones are forwarded, often a message such as “This call is being diverted. Please hold the line whilst we try to connect you…” is played! If there is one sure fire way to tell everyone who calls you that you’re a small business, that is it!

Others forward to their mobile and then answer hello whilst in the middle of the supermarket, windy street or on the motorway. Either way,  kerbam – we all instantly know how big your company is.

Really! When you have the option to divert your phone to a virtual office or telephone answering service, from as little as £25 per month, probably as much as you spend on your speciality coffees a month (and I know how much that can be as a self confessed coffee addict!), why would you not invest it in keeping your customers?

Image courtesy of Digitalart

Top reasons why small businesses fail to punch above their weight

Top reasons why small businesses fail to punch above their weight

In my day to day work, I come across too many small business owners who are so completely immersed in running their business and actually doing the work they generate, that they forget to look at their business from their customers point of view and are surprised when a prospect or potential supplier asks them a question about how big their company is, how many employees they have and how successful they are. 

They actually forget that this information is important to both their prospects  and suppliers to make a decision, and they also forget that when they’re talking to someone they can easily create confusion. 

Over the next couple of weeks, I'm going to cover some of the top reasons why small businesses fail to punch above their weight.

The first mistake is using a Mobile number as their business number .

This is an instant give away that there is only one person who is in this business. Plus with no landline, it gives the impression that you’re either not serious about the business or that you may disappear next week.

With technological advances there is no reason for even the most mobile business owner to just use a mobile number. VOIP (Voice over IP or internet phones now allow you to choose a phone number in the area you want. Some of my clients use professional  VOIP companies, others use Skype. 

Other companies use a virtual office to answer all their calls and publish the phone number that the virtual office allocate to them. This would seem like a good idea at first, however as you don't own the number, you would be tied to that virtual office indefinately, so make sure that they're going to do an excellent job for you before you commit yourself and your business to a receptionist that you can never sack!

So if you're using your mobile number as your business number, there are plenty of options for you to consider. There is no excuse!

When things go bump in your business - here's how you can reduce the emotional impact on you

We all have bumps in our business journeys where we suffer losses and disappointments along our way. Indeed, on an almost daily basis, we hear about companies that are having a very bumpy ride in this economic climate.

As you can imagine I was really interested when I found out about a psychological  technique that will help you pick yourself up if you do hear some bad news and help stop you worrying about it every moment of the day. Want to know more? So did I...

Research by Xiuping Li shows that through the process of writing down the specific issue creating the negative emotion on a piece of paper and then, very importantly, sealing the paper in an envelope, will help you reduce the impact of the negative emotions after hearing the news.

Try it and let me know what you think...

To read more about this research click here

When YOU are your business

I was reading a couple of interesting books over the holidays about becoming a person of influence & about marketing in the fast moving world of technology. All very interesting but not a huge amount of new stuff apart from one thing when you look at the two books together. Becoming an expert in your micro-niche and growing the micro-niches to grow your business!

Essentially this is what Richard Branson does with looking at a product/service where he believes he can deliver a better value for money proposition than is currently available. He looks to own a micro-niche.
When an entrepreneur looks to start a business, the do what they are good at or in the field of where they have experience, which is a great place to start. Unfortunately this creates a challenge in itself. Whereas Richard Branson has the resources to employ/partners with experts and is able to gain credibility under the Virgin brand, many of us don't. It is just down to us!

So many knowledge based businesses are completely dependent upon the expert (s) - often the founder member (s). They are the people who have dared to explore and try new things within their sector; often achieving great results, but the business still depends on them as they're the one with the experience, knowledge and thought process behind the delivery. Sound familiar?

The downside of this is that you are naturally stuck. Stuck in the limits of your own capacity and time constraints and with the best thoughts of delegation, it is really down to you.

If this is the case for you, then you need to look at this issue slightly differently. You are not going to dominate a whole sector - there is afterall only one of you. But you can dominate a micro-niche.

Essentially YOU are the brand and YOU need to build credibility within a small target group of companies which is big enough to support your growth ambitions, but will allow you to generate a big name for yourself in that smaller pond (the niche).

You may have already started this and have become well known in your business sector, but almost certainly you’ll have not taken the second step which is to develop systems to systemise that knowledge dispersion so it is not entirely dependent upon you in thefuture. This can be through online webinars, e-learning programmes, publishing a book, running seminars, online communities etc. With e-commerce, the opportunities are now boundless.

But where does the growth come from? Well, once you have saturated your micro-niche, you can start developing related micro-niches delivering through either partnerships or building on the expertise of your own team to deliver.

Inspired? Now you can get planning as I've been doing all last week!

The risk of standing still in business

I understand that this economic climate is tough for a lot of businesses. I see evidence of it everyday, but I also think there are many business owners who are scared to take that leap of faith to take their business to the next level.

Indeed, this was me for a while. I was happy and content with the level of business that I had and to be honest there was no need for me to change things. However there was this nagging at the back of my mind about what I could do if I would only just do it. I have the same question for those of you who are stuck in a rut.

If like many you are terrified of Social Media, you firstly don't know what to write and secondly, there is always the fear that you will spend time on a strategy that will in the end generate zero return and that has turned out to be a fad. Others are dismissive about marketing as a whole, especially advertising as it hasn't worked for them in the past. But the past is the past and my question is a little more fundamental than that.  

What is the risk of standing still?

I was talking to a company last month who were best of breed but who had not embraced change to the extent that they needed to within their sector. The effects have been catastrophic and they need to move fast to gain any foothold back into their market.

What are you doing to ensure you stay one step ahead in the game of business? How can you stand out from the crowd and ensure that you are recognised for what you do and that you do it well?

I feel some homework coming on for you. Any questions, feel free to call, email or send a smoke signal...