How Franchise Business Can Beat Economic Recession
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Everyone knows that the economic recession is a time that every businessman would want to avoid. It hits the rhythm of your business and can eat into your profits as well. Nick Strong at the Select Your Franchise shares, “a slowing down economy does reduce the customer’s confidence but this does not necessarily reduce the customers spending power.” So what protects a franchise business at a time of economic recession is “the fact that you have a well-run business that focuses on high levels of customer satisfaction. This will increase repeat business and word of mouth recommendations. This helps any business grow,” adds Strong.
Tried and Tested are the Best
At the time of a recession or economic meltdown, experimenting might not be a good option. Here is when you should choose a tried and tested brand that has shown steady expansion using a franchisee model of business. These are businesses that are self-sustained and not affected by their environmental conditions immediately.
Strong advices to prospective franchisees…“ follow a proven franchise system with enthusiasm.” The best results in all economic climates are achieved by enthusiastic disciples of the proven franchise system.”
So, as a prospective franchisee, you should opt for a brand that is “mature and well-established brands that can get the benefit of better deals with suppliers and who can leverage their network strength,” explains Steve Wright, executive director of the Franchise Council of Australia.
Pick the Best Franchisee
This is a time when as a Franchisor, you should choose your franchisee partners carefully. Look for younger people who are willing to take risks, are innovative and committed to making a name for themselves. Today’s entrepreneurial generation is not scared or deterred by challenges. They are go-getters and know how to get their way around. You might also realise, those who are wishing to get out of their corporate setups and go solo, are far more dependable at such times of economic slowdowns that high sounding enthusiastic first time, business doers at all.
This new trend in franchisee characteristics was also noticed by Wright: “There are a lot more funky hair and stubble than there used to be.” Franchising was once the domain of middle-aged people wanted to be their own boss but couldn’t take great financial risks. Now it is becoming more and more popular amongst younger, better educated and business savvy people who can see the potential of the business model.
Stand for Value Over Looks
The best franchise businesses to survive economic slowdowns are those that customers want to rely on. Remember, customers right now, are not looking at spending on something which does not give them value of it, especially at such difficult financial times. They are looking at dependability, assurance, reliability and above everything, how much “value your brand or service can offer at the end of the spectrum.” So, if your franchise brand or service can guarantee this or innovate to it, you are never going to go out of business. You might also want to go one more step and think of a business model which reaches to its customer instead of the customer reaching to it- that is another sure shot way to ensure you remain in business.
The article was originally published on Franchise India by Uttara J. Mlhotra.