With 850 franchise systems operating in Australia, selecting the right franchise can be a mammoth task. One way to narrow your options is to think about the type of business you would like to buy.
Do you like working with the general public, or do you think you are better suited to dealing with business people?
Retail franchises and many service franchises are what are known as B2C – business to consumer – franchises. However, there is a whole range of opportunities in the B2B - business to business - category.
B2B franchises are companies that market and sell goods, services or business strategies predominantly to other businesses instead of to the consuming public. Well know Australian examples include Kwik Kopy, Signwave, Snap Printing and Sign A Rama and courier companies such as Fastway.
Signwave Australia has 19 outlets that produce a wide range of signs for all types of businesses. They include window graphics, reception and office signs, exterior signs and shop fascias, point-of-sale, vehicle graphics, health and safety signs, site signs, exhibitions and displays and directional signs.
“The people that are attracted to a Signwave franchise are people who have had general management experience and are looking to apply a broad range of skills to a business. They want to prove they can run the whole business, and this type of opportunity allows them to do this,” says Kate Groom, general manager, Signwave Australia.
Groom says that people are attracted to B2B franchises like Signwave because this type of operation generates repeat business where relationships are established.
“The ability to continue to work with your client to get more contacts from them and to build relationship means you are not as reliant on getting new business.
Because you are building ongoing relationships you are also able to focus on service and quality and solving problems and less so on price. Once they trust you, price is less of an issue.”
For some people, Groom says the issue is who you are dealing with on a day-to-day basis.
“Some people like to deal with professional business people, often because that is where they have come from - a business environment.
“At Signwave we rely on the franchisee to have quite a lot of interaction with the business. We need them to follow the model but they can bring their personality to the business and choose the direction it goes. They can choose where they focus and what aspect of business.
“Our franchisees say that one of the things that makes them very happy is that Signwave is a really creative business and that they are helping people to create the best possible image for their business. This is a great opportunity and it is why we want intelligent, thoughtful people for our franchise, who are able to help other people build their businesses.”
Groom believes that many Australians aspire to own their own business and that there are a lot of opportunities open to them.
“There are semi job substitution opportunities and then there are longer term, more expensive franchise opportunities that can be a harder stretch for people. And that is what makes the decision tough. In a business like Signwave, you are investing in your future. For the first couple of years you need to invest but it provides you with the opportunity to make a high income for a long period of time.
“The challenge is for people to understand what it really takes. If you want to build a substantial and serious business that will meet the management challenges that you have learnt about over many years, and if you want to use those skills, and stretch yourself and develop as a person, then those opportunities are out there.
“I think that of the people who are looking for a business, the people who think about these options are fewer.”
Groom says that while many people talk about buying a business and having a better lifestyle, what they really want is control of their working environment and for some avoiding the frustration of corporate life. They also want to prove that they can do it.
“The challenge for franchisors and prospective franchisees is that in the current economic environment, quality candidates have many choices available to them.
“They can stay in a secure job and will do so unless franchisors can demonstrate to them how good the alternative of owning their own business can be.”
Groom believes that franchisors need to be more passionate about their business and that banks need to be less conservative in their approach to lending.
“Buying a business is not an investment like buying shares; it is something you feel in your stomach. It is something you want to build that you can be proud of. It is something you have to have a passion for and then the benefits are going to be substantial.”
Read about buying a franchise and running a franchise.
16-May-2006