The Startup is the newest culture or trend that everyone wants a piece of. The rookie mistake that everyone makes is probably the fact that they think if they have a good idea, it will surely succeed. Don’t fall into that trap. Having a great idea is just the tip of the iceberg. What follows is the execution and the resources required to execute it. Grit is the medium you use, the strategy is the key.
The problems that one will face during the inception of a business will be tumultuous but once you cross that, the rewards are plentiful. So don’t lose hope yet and work towards what you believe in while I point out a few pointers and how to curb the problems when in business by highlighting the need of a Franchising.
The Competition is something to be not missed when entering the market. They are already existent in the market and they will do anything to throw the weaker entrants out to monopolize themselves. Since they are familiar with the market and its customers, they have an upper hand in the market. Imagine yourself in a tank where you are a Pilot fish (A very strategic kind of fish by the way!) and you have to convince the Sharks not to devour you. Knowledge is power and that is what these Sharks have thus it's easier for them to adapt to market shocks.
If you are risk averse and you still want to have a business of your own, Franchising is a good option to consider. In this kind of an agreement, you have full backing from the Franchisor who is already existent in the market and has survived the competition. In this kind of an agreement, the Franchisor (the company controlling the rights to the agreement) gets into an agreement with another person to whom the right to conduct the business is given with limited authority.
Lack of Funds is another barrier that can disrupt a business before it even starts. The fact that the cost is realized is not enough to start a business. 99% of businesses fail in early stage because a business cannot break even if there is no inflow of cash. Financial risk is imperative to a business and unavoidable thus ensuring a constant and strong cash flow is important. The various elements that one will spend on in creating a brand could be its logo, the website, it's entire marketing, recruiting staff, merchandise etc.
In a Franchise model, the maximum execution is already done by the Franchisor. Compared to an already existing company, banks are more hesitant to fund a new venture because the Goodwill has not been established in the market yet. The initial setup costs like logo etc have already been developed by the Franchisor. Thus, it is a good option to consider if you have limited funds.
Time Constraint is another factor to consider when working on building a business. Every venture requires a commitment to long hours. A lot of time in building a brand goes in forming contracts, formulating policies, the marketing and website development and other activities along such lines. The longer it takes to finish these required activities, the business will be on standby which no one can afford. Time is money.
It is thus essential to save time and be productive by optimizing the resources. The best model that achieves this is a franchise contract. Everything that is required to build a brand is already built.
Poor planning of resources can be the biggest reason for failure. Suppliers may hike their price, poor investigation in the market structure etc. could be other points leading to a company’s failure. One cannot predict the future of the market but we can always prepare ourselves to protect ourselves from the market shock. A comprehensive business model should be charted out and all the possibilities should be seen that can put a business in danger. Lack of historical data can be risky if not procured on time. Therefore, Franchise can help sort the problems since they have already established themselves by studying the past.
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