Franchise Focus Business News…

Performances at the Edinburgh Festival Fringe (to give it its proper title) are usually associated with up and coming Beckett wannabes, soul searching thespians and struggling comedians however this year’s festival is currently playing host to an interesting combination between stage and SME.

Rachel Bridge (pictured right), Sunday Time business journalist has brought her very own one woman show, entitled How to Make a Million Before Lunch, to Edinburgh this year in order to give budding entrepreneurs a quick tour through the ins and outs as well as the do’s and don’ts of starting their own business.

In an article in last week’s Sunday Times, Bridge explained her reason for doing the show, “Everyone wants to be an entrepreneur these days, thanks to shows such as Dragons’ Den, and the one thing I do know a lot about is entrepreneurs [...] what people really wanted to know was how successful entrepreneurs such as Simon Cowell and Peter Jones had managed to make it work, and how they themselves could make a fortune – ideally in the shortest possible time. I could tell them some short cuts so they didn’t get bogged down in the time-wasting stuff.”

If you’re in Edinburgh this week, you can catch Bridge at Pleasance Courtyard at 12.30 pm daily until Sunday, August 29th. If you won’t make it all the way up there, you can also get your hands on Bridge’s new book also entitled “How to Make a Million Before Lunch” from Virgin Books available on thesundaytimes.co.uk/bookshop. For more information on Rachel Bridge, visit her personal website: http://www.rachelbridge.com/

Some people think that franchisees are not entrepreneurs; however my fellow US blogger recently argued otherwise and I have to agree, investing in a franchise does not eliminate risk or nerves when it comes to starting and operating your own business.

Even though traditionally franchisees have a lower rate of business failure than unique businesses, that is not to say that franchise businesses cannot fail and the onus is on the individual franchisee to ensure that their business is able to compete to the highest standard. In fact, a lot more pressure can be on certain franchisees who have to meet certain targets as part of their franchise agreement.

That being said, when I say this video on AVC recently I was impressed by the video content but also intrigued by the discussion going on in the comment section about the nature of entrepreneurship. There are a lot of great opinions about what should influence your choice when deciding what kind of business you want to start, along with concerns about going it alone, away from the safety net of being an employee.

What are your views on working for yourself? Does anything scare you about becoming your own boss and starting your own business?

An Entrepreneurial Dream

Who had ever heard of a vuvuzela before last week? Now it seems to be all that we can hear, even the players on the pitches during World Cup 2010 can’t hear each other plot their attack because of the almighty roar of the vuvuzela and when you look into the crowd there are vuvuzelas dotted everywhere – so where did they all come from? Someone somewhere has got to be making lots of money from the sale of the vuvuzela!

Today, the UK Premier League announced it would not be enforcing a ban on the vuvuzela during matches in the UK venues which means the instrument could very well be here to stay. Even though some have voiced concerns over the effect the instrument can have on hearing and others have complained of the nuisance it causes for players and referees, there are a number of entrepreneurs who are definitely very thankful and not in the least annoyed by the presence of South Africa’s most famous musical instrument.

Since the 2009 Confederations Cup which was also held in South Africa, the vuvuzela has grown in popularity as a supporters call at matches. The Times Live writes:

“The ubiquitous plastic trumpet, embraced as an emblem of the World Cup by South Africans and visitors alike, sells for between R20 for a simple Chinese import and R60 for a more contoured instrument, produced locally. ”Our vuvuzelas have the purest sound and they are the easiest to blow. A two-year-old could play it,” said Cape Town-based Neil van Schalkwyk, who claims he developed the vuvuzela seven years ago. Sales have grown from 500 a month to 50,000.”

That’s a pretty impressive increase in sales, even with the influx of the World Cup spectators. The sale of vuvuzelas has really been a retailer’s dream, with more and more producers creating merchandising options for teams and businesses to emblazon their logo or crest on to a suitably coloured vuvuzela – wouldn’t we just love a nice blue one with the Franchise Direct logo along the side!! Merchandising is something which can really boost brand prominence and is a great way to get your name out there. Emblazoning a business’ name onto a vuvuzela won’t necessarily help if they’re being handed out at a dignified business conference – unless you think the clients would be into “that kind of thing”, however personalised pens, sticky notepads and other office stationery can often be a welcome gift for clients and will mean that a business’ name stays on their desk all day long…each time they go to write a sticky note, the business name can be what they see on the top of the page!

So if you think you may like to sell personalised vuvuzelas, or maybe just settle for personalised pens, take a closer look at some merchandising franchise opportunities available on the UK market today. Here’s a video on how to play a vuvuzela - maybe turn the speakers down!

“Young people have a “do anything” attitude; they don’t know that it’s not possible. There’s no fear of failure. And young entrepreneurs have the luxury of few responsibilities. Their naivety means they’ll try anything.”

Tom Hadfield
Founder of soccernet.com (at 12 years of age!)

Won’t somebody please think of the children? Apparently, we do! During the economic low, the UK’s young people have been busy starting their own businesses. A recent survey of 1,720 people aged 18-30 by the Prince’s Trust and the Royal Bank of Scotland Group, 41% of respondents said they aspire to start their own business, and 78% said they have a business idea. So what is the UK doing to help these exciting young entrepreneurs?

The global economic recession has had a significant impact on Generation Y (those born in the 1980’s and 1990’s) as a high level of unemployment and increasing competition for university and local authority training places has dampened momentum for the financial success of this generation. Official figures indicate that the number of 16-24 year olds out of work surged to 943,000 last September. In addition to this, the Dept. Of Children, Schools and Families recently revealed that 13% of 16-18 year olds are “NEETs” – Not in Employment, Education or Training. With widespread redundancy and a lack of new jobs, many employers have indicated they do not plan to recruit school leavers. It seems that the only option left for many is to start their own business.  Figures realeased by Durham University’s Centre for Entrepreneurial Learning indicates that more and more young people are taking part in early entrepreneurial activity. Of 2,500 students surveyed, 4% were already running their own business, and a further 17% indicated that if the right job is not available, they will either start their own business or become self employed following graduation. In addition to this, Prof. Cary Cooper of Lancaster University Management School says, “Generation Yers [...] understand that jobs aren’t for life any more. They have to create their own jobs because big companies are getting smaller. I think this generation realises that they have no other option but to be that way.”

Along with a £60 million a year the government began investing in business start ups in 2005, there are a number of organisations dedicated to the promotion of early entrepreneurial activity. The most active and influential of these organisations is The Prince’s Trust. The Trust’s Enterprise Programme “supports unemployed young people aged 18-30 to work out if their business ideas are viable and whether self-employment is right for them.” In 2007/08 the Trust helped 9,447 young people through their Business Programme – 2,536 of them were new entrepreneurs, while a further 6,911 entrepreneurs received ongoing support from a Prince’s Trust mentor. 59% of young people supported through the Business Programme are still trading into their third year. In May 2008 The Trust marked the 25th Anniversary of the Business Programme by celebrating the achievements of 70,000 young entrepreneurs who had received support. Further support can be received from Business Link, which we’ve blogged about before, Enterprise UK set up by the British Chambers of Commerce to provide advice and support to new and existing entrepreneurs, Youngbusiness.Net and NESTA, a group which invests in early stage enterprises. Benedict Arora at NESTA believes in the importance of investing in the UK’s young entrepreneurs “We’re talking about the whole human capital that we’ve got in this country that needs to be optimised. We can’t afford just to focus on the very gifted or the lone innovator, that’s not a viable model for putting the UK economy on a successful path for the future. We will be a poorer society, both financially and in other ways if we don’t push the innovation agenda.” In 2008/09 NESTA invested in five new projects (totalling £1.2 million) and 14 follow-on investments (totalling £1.7 million). They have a portfolio of 50 investee companies.

Many young people in the UK have taken advantage of the variety of financing and support options available to them to start their own business. Following years of substance abuse but with a lifelong desire to achieve success, Adrian Wheeldon started his own plastering business with the help of the Prince’s Trust. Adrian reflects on the help the Trust has given him, “They gave me £1000 grant and £800 loan to start up a plastering business. I bought all my tools and a small car. Because of my history, I thought there was no one on this earth who would give me the money.I had a mentor for over a year. He taught me about cash flows. Forecasting. Marketing. That sort of thing. He helped me step over that line of responsibility that I would never have crossed without his help. When The Trust said at first that I would have a mentor I wasn’t sure. But what it did, every month I met up with him, reminded me why I’d been given the money. I always dreamed of doing something like that. But I never believed it. But my mentor, coming out of his way to meet me at my house, just encouraged me to believe in myself.” Tom Hadfield took a different road to success, starting very young – at the age of 12, when he started soccernet.com. Tom grew his business and eventually sold it to US sports network – ESPN for $40million. Even though most of that sum went to the company’s investors, it gave Tom a foothold to be able to start a new business. Tom gives life experience the credit for his success, even though he is now studying in Harvard University, “being entrepreneurial was my alternative to university. I got to travel, meet lots of interesting people. That was my education experience.” Tom now sits on NESTA’s Innovation Programmes Committee. Even though Tom and Adrian have taken very different paths to success, they are examples of the type of success the UK’s early entrepreneurs can achieve.

Clearly, Generation Y are the future for the UK and business investment in this group will no doubt be an important investment in the UK’s economy. For the franchise industry, this can also have a significant influence on the path taken by the UK franchise industry. Early stage entrepreneurs can develop highly innovative business models, if these models are then franchised, the face of UK franchising can be changed and bring new exciting changes to the UK franchise economy.

Sources

http://www.nesta.org.uk/
http://www.youngbusiness.net/
“Young Pioneers”. June 2009. http://www.director.co.uk/
http://www.dur.ac.uk/resources/cel/GenerationZ-anewentrep…pdf
http://www.guardian.co.uk/money/2009/dec/12/starting-your-own-business

This week’s guest blog post is  by Andrew Cutler, Sales & Franchise Director, Card Connection.

Getting your new franchise business – in financial terms - from ‘in the red’ to “in the ‘black’ as quickly as possible must be the aim of every new franchisee.

If you are moving from a regular monthly salary to self employed status through owning a franchise, then getting your new business venture into profit as rapidly as possible is essential for a successful long term outlook.  The challenge is that when you start out there will be an inevitable leaning curve while you get up and running.  So how can you best prepare?

Buying a re-sale franchise is the best way to ensure you will earn money from day one as you will be inheriting customers from the outset which is a great starting point.  Selecting a well known brand with a good reputation will also mean that a large degree of the time consuming marketing effort will have already been done for you, so you can focus on selling to those existing and loyal customers.

Find out if your prospective franchisor has a national account network which will provide you with leads. This can be a great help at the start.  Card Connection’s national account network, which includes retailers such as Costcutter, Londis, Netto, Budgens, Spar and Haldanes for example, offers an opportunity for our franchisees to begin selling to these retailers immediately.

It is also important to choose a franchise with products or services that are popular and almost ‘sell themselves’.  Quality products will always be valued and in demand, so are important for gaining new business and repeat custom.  Question if you would buy the product you are looking at selling on a regular basis?  Card Connection, for example, has more than 1,200 quality greeting card designs distributed in over 16,000 retail outlets across the UK and Ireland, which ensure customers keep coming back for more.

Early focus on building customer relationships is important.  You will be the new person and so you need to create trust and show your client base you are reliable and offer a service which is as good (or better!) than the last franchisee.  Make sure that there is support from the franchisor during the handover process.  Work closely with the outgoing franchisee to meet customers and ensure accounts are all aware of the impending change of ownership, and how well you plan to look after them.  This will make for as smooth a handover as possible.

As well as getting up to speed with existing accounts you will need to devote a proportion of your time to generating new business.  When you start off this will be challenging as you will be less familiar with the product or service than an experienced franchisee.  However, the good news is that you will come to the franchise with a ‘fresh set of eyes’ and so may spot opportunities that have been overlooked in the past.  Use your enthusiasm to your advantage to generate interest in your offering!  Remember, people buy from people.

Finally look to your franchisor for support in the early days.  Take advantage of training and talk to other franchisees to see how they overcome every day challenges.  One of the main advantages of franchising compared with setting up in business alone is that you have the backup of a successful and experienced team behind you so be sure to call on them for help when you need it.

Franchising is an ever increasingly popular way to enjoy the flexibility of self employment.  However, to ensure your franchise starts to be profitable as early as possible, you need to prepare.  Choose a good and reputable re-sale franchise and take advantage of the support that is offered to you.  Be quick to build relationships with existing customers and let your enthusiasm help create new business opportunities in the marketplace, and this will help you move from the red into the black as quickly as possible.

For further information about Card Connection re-sale franchises, visit Card Connection’s franchise profile on Franchise Direct.