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Researching a Franchise

Be Sure to Shop Around

Eight steps to choosing the perfect business opportunity.

Entrepreneur

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For an entrepreneur, reading about business opportunity programmes or attending business opportunity trade shows is like being a kid in a candy store. Each concept and product is more stimulating, dazzling and exciting than the last. It starts as an exercise in pure imagination, as every opportunity is mentally tested against your secret ambition to be in business for yourself.

If you find this mental exercise stimulating, however, you’re more vulnerable when it comes to investing in a business opportunity, because you may be manipulated by sales people who recognise your passion for business involvement. So before you reach for that credit card and buy a business opportunity, stop for a moment to consider the following.

Good Advice

These eight steps will not only protect you, but help you select the perfect business opportunity:

Step 1: Focus, focus, focus

Write down your core interests. What have you enjoyed most about current and past jobs? Contact with people, working with computers, making sales? Home in on the activities that stimulate and inspire you, and let them guide your search. Once you edit and think about your ideas, discuss them with those closest to you.

Also, consider your goals for the business.

Do you want to run it part-time or full-time? What can you afford to spend (and lose)? How will you pay for the business opportunity? What are your income aspirations? How does business ownership fit into your lifelong goals?

Keep these guidelines in mind when you either attend a business opportunity trade show or begin contacting business opportunity sellers. You’ll be surprised how easy it is to get distracted by interesting leads that stray from your goals. Above all, stay focused.

Step 2: Get organised

Before you start investigating business opportunities in earnest, take some time to prepare for the piles of paperwork the process will generate. Set up labelled files to store information about the programmes you like and don’t like, general information, notes on your personal interests and so forth.

When you receive a mailing or return home from a business opportunity trade show, sift through your plastic bag of handouts. Throw away the junk, and file the materials that interest you the most.

Step 3: Shop ’til you drop

Your challenge is to overcome every obstacle when gathering information. This entails attending trade shows, calling sellers whose advertisements intrigue you, visiting sales representatives and talking to other entrepreneurs who’ve purchased business opportunities in the past. Stay in information-gathering mode for a while, and don’t rush into buying anything.

Step 4: Develop healthy scepticism

Whenever you listen to a sales presentation, stay on guard. Expect to hear that the programme can yield thousands of rands in your spare time with only a few hours of effort each week. But be realistic! Sorry to break the news, but no matter what business opportunity sellers tell you, there’s no such thing as easy money. It’s actually hard work to be successful, and if you think otherwise, you are hereby instructed to leave your credit cards and blank cheques at home.

Step 5: Information, please!

As you find programmes that fit your criteria, ask questions of the sellers . . . and keep asking. No detail is too small to investigate further. Take a notepad with you to all sales presentations or trade shows; taking notes will help you remember the questions you need to ask. Some to start with include: Exactly what kind of work will I do in this business? What if no one responds to my marketing efforts? If it doesn’t work for me, will you [the seller] help? Is there a limit to the help you’ll provide? Have you ever been sued by one of your buyers or investigated by a state agency? How long is the training? Are there any circumstances under which my money would be refunded?

Step 6: Check out the company

This is not an easy step. There are a number of places to go to enquire about the legitimacy of a business opportunity seller; unfortunately, they may not have any specific information for you. The best sources of information about a business opportunity are the people who have actually purchased the programme. Ask the seller for a list of buyers in your area. Don’t accept just one or two referrals – they may not give you an unbiased story. Get a full list instead, and call the contacts. Ask them: Did the programme work? Have you made money? Are there any weaknesses in the programme? How much time do you spend every week working on the programme?

Step 7: Test the market for the product or service

Many first-time business opportunity buyers are disappointed when the product or service doesn’t sell. They purchase the advertising and mail the promotions, but nothing happens.

Always try to test the potential of a product or service before you plunk down your credit card. Ask friends and family: Would you buy it? How much would you pay? Run your own focus group, interview people at the local shopping mall – do anything you can to get feedback on the marketability of the product or service.

Step 8: Negotiate the purchase

Here’s a secret: Business opportunity sellers charge prices that vary widely and depend largely on what they think you’re willing to spend. So be a tough sell. Make an offer on your terms, structured to suit your interests. Spread payments over time, defer payments until after delivery of the goods or simply make a low-ball offer. You’ll be surprised when the seller doesn’t close the door on you but keeps right on talking.

Change Your Attitude

These eight steps will help you avoid the most common traps of buying a business opportunity programme, but there’s one last pitfall to be wary of: your attitude. Don’t expect to ever see the value of your investment if it just sits on your shelf gathering dust. Always maintain your enthusiasm, and follow through. It could make all the difference to your future success.

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

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Researching a Franchise

The Future Of Franchising Looks Smaller (And Fancier)

Franchises are adding smaller locations and reduced menu options, as niche markets emerge, to attract the customer of the future.

Diana Albertyn

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As the owner of a thriving franchise, you’re well aware of the fact that fluctuations in the world economy has both negative and positive effects on business. When it comes to your successful franchise, tough times could mean adopting new trends or seizing gaps, potentially resulting in a new franchise concept you wouldn’t have otherwise thought of.

“The buzz word in global franchising is ‘flexibility and adaptability’,” according to the Franchise Association of South Africa (FASA). “Whether a result of a need to inject some life into stagnant franchise brands or as a result of the new world order brought about by the recession, franchising is embracing alternative and options in a big way.”

Related: As Consumers’ Tastes Change Can Your Franchise Keep Up?

You can do this by either devising innovative areas to franchise or allowing more flexible ways for franchisees to operate to help with their bottom line. FASA has earmarked these as some of the biggest franchising trends in 2018 and beyond:

Smaller, more cost-effective franchise models

When franchisees don’t have high franchise fees and start-up costs to worry about, they can focus more on what customers want, and deliver. The added benefit of smaller spaces include having fewer employees and reasonable rental.

Among the new frontiers in franchising are the food court losing its legacy as the preferred setting for food franchises, as service stations increase in popularity in the industry. A number of brands – like Steers, Debonairs and Mugg & Bean On-the-Go outlets – are co-locating with major fuel retailers to create fully-integrated accessible centres.

Niche markets are offering one-of-a-kind franchises

“The opportunity to get in on the ground floor of a new franchise trend is also on the rise,” notes FASA. This could be offering a unique gourmet food experience in your outlets or a ‘green’ space of energy saving technology in your operations.

“Consumers have gained control of what they want,” says Morné Cronjé, head of franchising at FNB Business. “It is no longer about what you have on the menu, but how your product or service can be tailor-made to what a customer really wants.”

Founded just five years ago (2013), RocoMamas boasts over 60 franchise outlets, clearly responding to the essence of this trend –allowing consumers to build their own burgers without having to pay for items they’d rather leave out.

Related: Key Franchising Trends To Consider For 2018

Stay ahead of the game

For long-term success, franchisors who want to expand their business should start exploring beyond present circumstances and current predictions.

“2018 will no doubt bring its challenges, however for every challenge there is a window of opportunity to explore. We are advising franchisors to scrutinise these trends carefully, it can definitely give them a boost for 2018,” says Cronjé.

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Researching a Franchise

As Consumers’ Tastes Change Can Your Franchise Keep Up?

More of your customers are eating in, and if you’re not packaging, portioning and pricing your food accordingly, they’re heading to a retailer that does.

Diana Albertyn

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It’s generally believed that it’s cheaper to cook your own breakfast, lunch or supper than to go out and pay a much higher price for the same food in your fridge at home. But today’s consumer’s live fast-paced lifestyles – so food is becoming more about convenience.

31% of 6 022 middle-to-high income South African earners surveyed by BusinessTech, put eating out and entertainment at the top of their list of things they’re most willing to cut their spending on in 2018 to save money. Research by supermarket giant Pick n Pay correlates, reporting an increase in customers buying quality convenience food, not just to entertain at home, but for dining at home.

Related: Driving Your Business Growth Towards More Customers

Consumers are empowered by variety

You’ve heard about the ‘fast casual generation’, aka Millennials? They are demanding healthy, affordable eating experiences. But do you know how this affects the future of the food industry, and your business in particular – because they’re not the only ones adapting their lifestyles.

An increasing number of food brands and chefs are compelled to create complete ranges of new, convenient meal options that are not only packaged, portioned and precooked attractively, but affordable too.

The fastest growing sector of retail foodservice for the past four years has been the convenience store sector. Non-traditional avenues of distribution are growing, gobbling market share while establishing new patterns of consumption, price points, and customer loyalty.

Shoppers are becoming value-focused

A savvy franchise would acknowledge that although pre-packaged and pre-cooked convenience food isn’t a new trend among consumers and supermarkets, it is gaining popularity. “Some of the most notable trends in 2017 were an increasing shift to convenience foods as customers looked for both value and convenience,” says Pick ‘n Pay’s Head of Marketing, John Bradshaw.

Related: 5 Techniques To Leave Customers Grinning And Vowing To Return

Value for money and healthier food choices will continue to be top of the convenience food list for consumer in 2018, as more shoppers cut down on luxuries.

“We’ve seen significant growth in the number of customers looking for an easy way to enjoy a good meal without the cost of eating out,” says Bradshaw.

But he cautions that South African shoppers have always been value-focused, and while the most significant shift Pick ‘n Pay has seen is how all its shoppers, no matter what their income levels, are watching their budgets.

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Researching a Franchise

Maximise Your Social Media Reach This Holiday Season

Quick and cost-effective, social media is your best tool to reach target markets when it matters most – during the holidays.

Diana Albertyn

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It’s not just the end of the year that can be lucrative for businesses. School holidays and other major breaks during the year present consumers with more time to spend shopping. Why not ensure money is spent at your franchise by capitalising on the minimal cost and maximum exposure of social media?

You don’t have to create entirely new deals or promotions from what you may already have running on your store, but find a way to make it special for your social media followers, suggests Kelly Mason, marketer at Customer Paradigm.

Holiday campaigns on Twitter, benefitting from popular hashtags, streaming live content, and receiving information instead of just distributing it via social media are just some of the ways to stay ahead of the competition.

Related: Why Your Business’ Social Media Marketing Strategy Is Probably Wrong

Know your customers well

The first step to attracting customers and getting them to complete a sale is understanding their customer journey.

“Being able to document where they spend their time online, which social channels they use most, and what they’re reading or watching on those channels is a huge plus. Finding that crucial information is fairly easy to do, thanks to modern-day marketing tools and resources,” advises Paul Herman, ‎VP: Product and Solutions Enablement Group, at Sprinklr, a unified customer experience management platform for enterprises.

The better you understand your customers, the easier it is to reach them through a campaign optimised for their interests.

Master social listening

You could be using social media all wrong in the run up to all your holiday campaigns. Perhaps it’s time you used this platform to listen to your customers?

“Through social listening, marketers can identify major trends and product keywords in their industries,” says Herman. “For instance, knowing those keywords can help marketers identify which social platforms are more popular for a target audience. With that information, they can make smarter decisions about where to spend their money and which products or services to promote on each platform.”

Related: 10 Laws Of Social Media Marketing

Use the information gathered to determine what customers like about your product, what they dislike about it, and how you can improve upon it so they can buy more of it. The more of this data you collect, the better and more effective your interactions with customers will be.

Try something new

50% of consumers look for a video of the product they want to buy before going to an ecommerce store to buy it, according to a 2016 Google survey. “Video can be an extremely effective way to get your customers to take action – in this case, to make a purchase with your store,” adds Mason.

Video adverts are often used as an experimental tool in social marketing and switching it up on platforms such as Facebook Live, Instagram Live, Instagram Stories, or Snapchat – depending on your brand’s activity and your audiences’ interests – can help attract customers during seasonal periods.

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