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It’s About The Money With Wimpie Sevenster

Why work for money when money can work for you? The Interface Financial Group (IFG) offers a unique business model that gives entrepreneurs unprecedented freedom. Entrepreneur speaks to Wimpie Sevenster, IFG master licensee for South Africa.

GG van Rooyen

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Whether small businesses are trying to expand or fighting to survive, cash flow is always an issue. Regardless of whether the economy is struggling or booming, businesses are always in need of cash.

Brief history of The Interface Financial Group

Interface, like the financial services industry of which it is a part, is a very mature player. Having been in business since 1972, Interface is clearly the market leader in invoice discounting.

It has hands-on experience and a growing network of offices in the United States, Canada, Mexico, Australia, New Zealand, the Republic of Ireland, Singapore, the United Kingdom and, of course, South Africa.

Related: Chicken Xpress – The ‘No Frills, No-Fuss, Keeping-It-Simple Franchise’

For the first 20 years of its operations (before franchising), Interface acted as an invoice discounter. This activity has resulted in a very solid knowledge base from which Interface franchisees/licensees can draw support.

Senior management of Interface have ‘been there and done that’ — their experience now translates into your franchise/licence success story.

What does IFG do?

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The Interface Financial Group offers factoring services. Importantly, this isn’t the same thing as lending money. Simply put, an IFG licensee buys an asset, and the asset that’s bought is an accounts receivable that is evidenced by an invoice.

The IFG licensee buys this at a discount from the face value and holds it until maturity, usually about 40 days. At the end of the credit period they receive payment of 100% of the face value and, therefore, the discount is taken as income, which is their gross profit in the transaction.

Your client’s customer pays the invoice in full directly to you on the due date. Your working capital goes to work the moment you purchase an invoice, and it offers an above-average return on your capital with minimal marketing and a work schedule that is within your control.

Why do you need an IFG licence to do this? Isn’t this something that you can do on your own?

Absolutely. This is something that anyone can do. However, in the same way that there’s a great advantage to opening an established fast food franchise store, IFG offers the training and support needed to get up and running quickly.

The Interface Financial Group is an international operation that’s been around since 1972. It has also been given ‘World-class Franchise’ status by the Franchise Research Institute.

We like to say that IFG allows licensees to be in business for themselves, but not by themselves. Licensees benefit from a proven model, operating system and support structure. It offers an exceptional training programme, a powerful start-up marketing programme, ongoing transaction support and international invoice discounting opportunities.

Lastly, licensees benefit from the Interface Risk Management Programme, which has been perfected over more than 40 years, and is a key reason why IFG licensees all over the world are incredibly successful.

With many franchise/licence opportunities out there, what makes IFG uniquely attractive?

There are a lot of factors that make an IFG licence attractive. Firstly, start-up costs are low and there are no pre-set capital requirements. Secondly, you don’t need to hire employees and you don’t need a shop front, or even an office. This is an operation that can easily be run from home.

The Interface licence is designed as a home-based business concept. A home-based office is usually more economical than renting office space. We do not, however, mandate that you must be home-based. It is a matter of personal choice. Are you comfortable working at home, and does the home environment lend itself to a professional office?

The small business market keeps growing, and that increases the number of small businesses that need cash flow assistance. A wide range of industries and markets benefit from invoice discounting, including manufacturing, construction, distribution and professional services.

An uncertain economy does not affect your business, because you are there for small business owners when traditional banking institutions cannot help.

However, you do not compete with large financial institutions. Instead, you work alongside them to provide short-term solutions that they cannot assist SMEs with. A lot of our clients are referred to us by banks, business brokers, lending institutions and accountants.

How do IFG licensees go about finding clients?

We have found that the best clients come from referral sources. We have, therefore, created a professional marketing approach that does not rely on cold calling and ‘selling’ to an end user. We train our franchisees/licensees in the art of forming a ‘Lead Source Referral Group’ that will supply the bulk of their business.

In the majority of locations, where Interface licensees operate, that group consists of three basic components: Banks, non-bank lenders and accountants that run small business practices.

Interface franchisees do not ‘sell’ the service. A typical marketing approach is to work with a lending officer of a local bank. We request a meeting time, by appointment, of only 15 or 20 minutes.

During that meeting, we explain who we are and what we do. We are mindful of showing that we are not in competition with the bank, and simply ask for referrals when the bank is unable to accommodate their customers’ business funding needs.

This approach allows the bank to continue supplying their regular services and maintaining a deposit relationship, while Interface handles the funding requirement.

At some future time, the client will become ‘attractive’ to their bank, from a lending point of view, and the bank will then take over the funding role.

Banks are in the business of providing services to their clients. Those services vary and may be readily available, or not available, due to the incompatibility of the applicant.

Where they are not available, the bank then becomes a ‘problem solver’ for their customer by referring that aspect of the business need to Interface.

Who is the ideal IFG licensee?

IFG

There is no such thing as a universal description of an Interface licensee. There are, however, several significant characteristics that all IFG franchisees have. First, we always look for individuals who have excellent communication skills — both verbal and written.

Interface licensees are charged with the task of communicating with professionals such as bankers and accountants on the one hand, and with small business owners and entrepreneurs on the other.

Interface clients are by nature very entrepreneurial individuals who are striving to get their business venture up and running as quickly as possible. Because the business is in its early development stage, the owner is probably handling numerous responsibilities within the organisation. Licensees need to be able to effectively communicate with these individuals in order to obtain the required information and also to work with them on an ongoing basis.

Second, we look for individuals who are decision-makers. Licensees gather and analyse the information, confer with Head Office, and then make a decision to move forward or not. Our process is designed to be handled quickly, efficiently, and in a professional manner.

Finally, we seek to work with licensees that are entrepreneurial in their outlook. We look for people who have a vision for themselves and their Interface business.

Is a background in business or finance a must?

A background in business will certainly never hurt, but it is by no means a must. The list of successful IFG licensees is incredibly varied.

Related: Minuteman Press Advises You To Under-Promise And Over-Deliver

We have licensees who come from all walks of life. But what they all have in common is drive, a good head for business and great communication skills.

It also helps to have some ‘number crunching’ abilities, but it is not imperative, since our detailed system will easily walk you through the process and procedures.

Our personalised training programme will also ensure that you grow to understand the Interface system. Part of what we bring to the table is a comprehensive transaction tracking system that takes care of all of the monthly chores in terms of creating your income and expense statements and your monthly balance sheets.

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GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.

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Franchisors

The Secret Sauce To Great Franchise Leadership

The upside down pyramid puts the franchisee at the center of everyone’s effort. Success follows.

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I am often asked to share the secrets of franchise success with my clients and audiences of franchise executives as I travel the country spreading the Franchise Bible strategies.

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The most critical of the three core strategies is what I call the upside down pyramid strategy. This is more than a catch phrase or slogan. It must become a true belief in order for this strategy to affect a franchise organization for the better. Lets start with some basic facts to clarify.

What it is                              

The upside down pyramid is a servant leadership model that makes sure that franchise owners always come first. This must be genuine for all members of your team.

Related: 3 Challenges To Establishing A Franchise System And How To Overcome Them

Franchising is different than any other business model in this way. A franchise organisation simply cannot thrive unless the entire corporate team is on board with this commitment. If it’s not, it would be like a medical team where some members simply did not care about healing the patient. It is a non-negotiable.

What it is not

This strategy is not a hand-holding philosophy that rewards lazy or non-compliant franchisees. One of the exciting outcomes from this system is seeing the franchise owners step up and go above and beyond the call of duty when they feel truly appreciated, valued and respected by the franchisor. I have seen amazing things happen from franchise communities that felt connected and part of the bigger picture.

The challenge

Many franchise organisation executives have a lot of experience as traditional employers so they tend to try to “manage” their franchise owners as though they are employees. In most cases this is the beginning of the most common problem that I call the traditional pyramid model with the boss on top.

The key to remember at this point is the reality that the franchise owners are not employees of the company. In fact, the exact opposite is actually the case. The franchisees invested their hard earned money into the franchise company and pay an ongoing royalty as well. This means that they are the customers of the franchisor and the franchisor should value them as such.

How do you implement this strategy?

I have seen the good, the bad and the ugly in the franchise world. I can usually sense the company culture pretty quickly when I am among the franchise executive and support team. It is no surprise that the most successful franchise brands have a pretty solid grasp on this strategy. Here are some tips to get you started:

  • Train: Introduce this strategy to your executive and support team and give them the opportunity to ask questions and learn. Remember that this may be a bit of a paradigm shift for some, so they may need time to get it down.
  • Reinforce: Use ongoing reminders during your meetings, training sessions and conferences to keep the ball rolling. Your system must be based on things that you and your team will do consistently for a long period of time. A short burst of change followed by a return to the former status quo doesn’t work, so make sure you can commit and stick with it.
  • Insist on buy-in: Everyone on your executive, training and support teams must buy in to this commitment for it to work. You have heard that one bad apple spoils the whole bunch. This is very true within a franchise organisation. You may have to replace team members if they refuse to genuinely commit.

Related: Col’ Cacchio: A Passion For Pizza

Leadership tip

You have also heard the saying that the fish starts to rot at the head. The common denominator that I see in failing franchise organisations is almost always due to poor leadership. I often say that a decent business model with great leadership will usually thrive and a great business model with lousy leadership will usually fail.

Don’t feel bad if you are not the best leader for your business. I have seen business founders step aside and hire in leadership experts to run with their creation. Knowing that someone else is a better leader than you for your franchise organisation is a sign of great discernment and wisdom. If you are not sure just ask your franchise owners to give you a grade as the leader. I asked a franchise CEO recently if he would get an A from his franchisees and he said, “Probably not.” I advised him to get back to work and make sure that he can earn that A.

This article was originally posted here on Entrepreneur.com.

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Franchisors

Get Your Franchise Running Smoothly – Even When You’re Not There

Does the thought of taking time off from your franchise outlet make you nervous? Then you have to learn to run your business instead of letting it run you.

Diana Albertyn

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“A sign of a successful business is one that can operate without your physical presence 24/7,” says Brad Sugars, start-up expert, author and founder of ActionCOACH. While your franchise systems and operations are designed to run smoothly and consistently, is your staff trained to be productive in your absence?

“Franchises are already by nature systematised operations, so it boils down to how you as a business owner hire and train people to get the necessary jobs done,” says Sugars.

If you know a sick day will cause havoc in your store, an assessment of how you’re running your business is needed. Are you really running a successful franchise if things fall about without your supervision? Take a step back and consider the following steps to manage your franchise without it controlling your life. Pretty soon you could book that vacation.

Determine your role in the franchise

Are you managing the franchise, taking orders, doing admin and handling every other aspect of the business? Then you’re not hiring the right people, because those roles should be filled by people who can be left to carry them out unsupervised.

Related: How To Write An Operations Manual For Your Franchise

“And if you don’t have the right people for the job then it might be time to start hiring, so you can free up your franchise’s most valuable resource – you,” says Pieter Scholtz, co-Master Licensee for ActionCOACH in Southern Africa.

“You need to get an idea of how you can hire people to take repetitive or administrative tasks away from you. Ask yourself: ‘Do I really need to be doing this?’” says Sugars. Your business cannot run optimally if you’re the single most-knowledgeable and capable person there.

Lead with clarity

You have long-term goals for your business, perhaps even acquiring more locations and running multiple units. While growth is good, you need to share the load and ensure everyone employed in your business is working towards the same goals, otherwise, it’ll be difficult to get there. Sugars suggests asking yourself the following:

  • How will you make your vision a reality?
  • What makes you different from other franchisees and business owners?
  • What kind of team do you want to recruit and create?
  • How does all of this deliver value to your customer?

Conveying your vision can help ensure employees know how to get to the end-goal faster and more efficiently.

Related: 3 Steps To Ensure Your Franchisees Flourish Your Support System

Plan for long-term cash flow

Loyal customers ensure a constant flow of cash through the franchise and this requires exceptional service and the building of strong relationships. “Target your top-spending customers and establish a good relationship with them for long-term cash flow,” Sugars suggests.

Although the broader campaigns are covered by the marketing fee you’re paying to your franchisor, it’s wise to focus on your local’s tastes and suggestions when looking to deliver an experience worth returning for.

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Franchisors

Are Your Employees On Board With Your Franchise’s Brand Promise?

You cannot run a successful franchise if your staff isn’t aligned to the brand’s values.

Diana Albertyn

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Are the people who work in your franchise outlet familiar with the franchise’s brand promise? As a franchisee, you’re required to deliver a uniform experience, so any customer who walks through your door feels like they’re at the same store the franchisor has across multiple locations. If your employees aren’t able to embody the franchise’s brand promise at every interaction, you have a challenge on hand.

“If your company’s brand promise is a warm and friendly atmosphere, you can’t deliver that if your employees aren’t warm and friendly,” says Robin William, Senior Practice Consultant at Gallup.

“Selecting the right employees is essential to providing the right brand service. Hiring people who can’t behave the way the brand wants them to will doom a service initiative.”

Related: How To Write An Operations Manual For Your Franchise

When employees know what’s expected of them, they’re able to keep the promise the franchise makes to customers – leading to higher customer and employee engagement, trust, and revenue.

More than a mission statement

Even if you’ve ensured every one of your staff members know the brand’s mission statement, how can you be sure they’re able to exemplify it in their behaviour every day? William suggests that you do the following:

  • Create structures and mechanisms to consistently instil brand values in the franchise’s culture.
  • Discuss brand behaviours daily.
  • Demonstrate brand behaviours yourself every day.
  • Praise the efforts of individuals who demonstrate brand behaviours.
  • Hold employees accountable for not exhibiting brand behaviours.

Once you’ve clearly defined the right brand behaviours, it’ll be easier to have staff on board who deliver your franchisor’s brand promise.

Internalise the culture

Here’s a conundrum. Do your staff know what to do in a situation where a customer’s request might not be aligned with the brand promise, but the brand promise is always to deliver on customers’ requests? It’s a tricky situation, but if you’ve clearly articulated the promise, your staff will know how to “Behave the brand”, says William.

“Do whatever it takes to deliver on its brand promise. Whether it’s focusing quality, fast service, customer care, or low prices,” he says.

“Employees must execute brand and service behaviours consistently, and frequent reminders can help employees understand and internalise these behaviours.”

Related: 3 Challenges To Establishing A Franchise System And How To Overcome Them

Empower your staff

Investing in your staff is the best way to encourage them to act in line with your brand’s promise. Once they understand why it’s important to act along the lines of your brand, they will feel empowered and motivated to do so.

Starbucks trains employees to memorise customers’ names and preferences in line with their promise of making everyone who visits their stores feel at home. Apple’s strategy of hiring nice, smart people who are passionate about service and the product aligns with the company’s belief that knowledge can be improved, but personality cannot.

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