Checklist to Understand Marketing Benefits of Franchise

January 31, 2011

In the post about benefits of buying a franchise versus independent business we argued that one of the primary benefits provided by franchise is better marketing at a lower cost. By leveraging their size and expertise a franchise can create better brand and improve sales for all franchisees. Subway positioned itself as the Diet Sandwich Shop in the minds of all Americans by running the “Jared” campaign for number of years.
However, not all franchises do such a good job of marketing. A number of them waste their and franchisees’ money by spending on frivolous, useless marketing activities. That’s why it is important to understand the value provided by franchise in terms of marketing and compare it against the investment you have to make as a franchisee – in other words the return on your marketing spend.
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Filed Under: Buyers, Management, Marketing, Operations, Sales Tagged With: ,

Benefits of Buying a Franchise versus Independent Business

January 26, 2011

As we mentioned in the previous post on myths and realities of franchising franchising model helps those who want to get into small business; but do not have prior experience or do not want to start from scratch. These people like the fact that buying a franchise versus independent business will reduce the risk of failure. At the same time, they also question the value provided by franchisor for the amount of money they have to pay to them in terms of initial franchise fee as well as ongoing royalty.
As with any business transaction, it is important that you understand what you are getting in return for the money paid to the franchisor. While franchisor does provide benefits in exchange for the fees they receive; not all of them are equal. In addition, different franchises provide value in different areas depending on their strengths and strategy. You should know why you are buying one franchise over others and set proper expectations before making decision.
In our experience, franchises provide value in 4 categories listed below:
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Filed Under: Buyers, Management, Operations, Purchasing Tagged With: ,

5 Common Myths and Realities of Franchising

January 9, 2011


The franchising model provides a springboard to many would-be entrepreneurs who dream of owning their business; but do not have experience or time needed to take care of myriad aspects of running a small business.
While franchising does provide the needed support and tools for running the business; many people wrongly believe that because they are going in the franchising business they can operate the business without much effort on their part. After all, the franchise is supposed to take care of everything in exchange for getting the monthly royalty payments, right? Nothing could be further from truth.
In this post, we aim to dispel this and other myths held by entrepreneurs. You should also look at previous blog posts that discuss qualities to look for in a good franchise as well as signs that show the franchise will be successful.
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Best Ways to deal with an Irate Customer

November 21, 2010


Post from Guest Contributor Chris Blanton, editor of Ingenious Business Guide.
Do you remember the last time you were frustrated while making a purchase? Maybe you were talking with an unintelligible company’s customer service rep on the telephone. Or maybe a retail clerk was arguing with you. Perhaps a returns department refused your refund because you had lost the receipt. Regardless why you were upset, you wanted two things: someone to solve the problem, and a sincere apology for being disrespected.
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Filed Under: Customers, Management, Operations

Demonstrate Confidence in Negotiations to Get an Edge

November 7, 2010


Post from Guest Contributor Chris Blanton, editor of Ingenious Business Guide.
Many business owners leave money on the table by reacting to pricing pressure by haggling or discounting.
Seasoned deal makers assert in a negotiation that the first person to name a figure loses. Information has value, and the one who possesses more of it is better positioned to come out ahead in a transaction. When one party is ignorant of their opponent’s expectations, the best strategy is to get the other party to name a starting price.
When, as in retail sales, the seller publishes the price, buyers are forearmed with the seller’s expectation but the seller is not similarly equipped with the buyers’. Thus a seller who exhibits price flexibility puts herself at a disadvantage because she better arms her buyer.
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How to Ensure the Business Launch Date Stays on Target

November 2, 2010


If we have to bet on one thing when it comes to opening a business on schedule; we’d say it WILL NOT. No matter how well you plan, it seems things always go wrong somewhere resulting in delays.
Not being able to open the business on-time can hurt you on multiple fronts –you not only lose sales for every day that the business is not open, while your expense clock is already ticking; but also you end up throwing more money on tasks that are running late.
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Effective Ways to Minimize Employee Turnover

October 18, 2010


Post from Guest Contributor Chris Blanton, editor of Ingenious Business Guide.
One unfortunate aspect of management is employee turnover. Many of your hires simply won’t work out. A new worker may develop personality clashes with coworkers, turn out to be incompatible in temperament or values, or may not fit in with the rest of the staff. Or they may not develop the required skill set rapidly enough.
You want to counsel out any employee who is a poor fit culturally to achieve a smooth running organization. Even the geniuses must go if they aren’t team players. Like Netflix asserts: No brilliant jerks! But what do you do if an otherwise acculturated employee doesn’t ramp up quickly enough? Do you show them the door or continue to try and train them?
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How to Lower Fixed Cost to Achieve Financial Flexibility

October 13, 2010


We mentioned in the previous post that in this times of economic uncertainty your business needs to have flexibility to respond to changing market conditions. One of the ways you can do this is by converting as much of your fixed costs to variable as possible.
The reason for converting fixed cost to variable is simple – fixed costs don’t change with sales or production; while you can control variable costs in response to change in sales. Monthly rent you pay for the building is an example of fixed cost; whereas the amount you pay to buy raw material to make final product (commonly known as Cost of Goods Sold) is an example of a variable cost.
High fixed cost can hurt you in difficult economic times, such as now, and can even drive you out of business. This is what happened to many of the businesses that simply could not cover fixed cost with the sales plummeting. There are several ways in which you can convert fixed costs to variable. Below we have highlighted them.
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How to Survive Economic downturn by Being Flexible

October 11, 2010


The difficult economic environment in the last couple of years has forced many businesses to close their doors and ruined the dreams of many people. While it has affected almost all businesses, it has particularly hit hard to those who were not flexible.
While it may be too late for some businesses to do anything about it now, if you are one of those who have survived or are just starting now is the time to think about how you should prepare and respond to the downturn that refuses to go out.
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Filed Under: Finance, Management Tagged With: , , , ,

How to Succeed in Starting a Business while Holding Full-time Job

October 7, 2010


Contrary to beliefs held by some people it is possible to start a business while still working on your job. Many people want to hold onto their current job for as long as possible for reasons cited in this post ; while they are starting business.
While it is not easy to start a business while still working on full-time job; there are ways by which you can succeed as long as you know what you are getting into and take care of important issues that will inevitably surface. In our view, the key to success is making sure you have laid proper groundwork to operate the business in your absence; while still keep a watchful eye on it.
Below we have highlighted several suggestions you can follow to be successful.
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