Date post: | 16-Jul-2015 |
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Business |
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Choosing the right Business Model could decide your chances of Success or Failure too.
Choosing the right model helps make the business success a little simpler and less difficult
So… which then is the better business model!!
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In a Franchisee Option, the Concept is already existing & proven in the marketplace.
In a Traditional Business, one needs to do trial and error – should have or develop an expertise in each & everything
Traditional Biz
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Tried & tested systems and processes already in place and running
All systems needs to be newly created and processes designed
Traditional Biz
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Support would be available on going from the Company / Franchisor
Everything has to be managed and learnt by self. No external support at roadblocks
Traditional Biz
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All the marketing designs, collateral will be provided by the company. Tested already. Just have to use them
All designs need to be newly designed and tested until it works effectively. Also expensive as many versions need to be tried
Traditional Biz
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Can start the business operations immediately.
Needs lots of time to initially set up with lot of trials and coordinate for everything from materials to logistics to finance to recruitment & more.
Traditional Biz
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Risk is mitigated with proven & working systems in multiple locations already.
Risk is relatively higher as no part of the business has been time tested. Everything has to be newly tried on assumptions and beliefs.
Traditional Biz
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The Franchisor would provide regular Updates and also focus on regular R & D and innovation for new upgrades.
Everything needs to be handled by self. No other person or company would help with upgrades or updates
Traditional Biz
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Franchisee is provided complete hand-holding in all these by the Franchisor
One needs to completely device their own plans and discover marketing approaches or get trained separately
Traditional Biz
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Focused, planned & clearly aware of the initial and recurring investment as the same is already tried elsewhere.
No clear idea. Appears less initially, but can be much higher as there are lots of trials to be made and new vendors to associate with less volume
Traditional Biz
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Expert opinion, feedback & testimonials shared from existing set of franchisees
No way to gather any feedback or wisdom from others experience
Traditional Biz
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All franchisees can benefit from these processes, trademarks, IP and brand value provided by the franchisor
As it would be an independent new entity, brand recognition would take few years along with confirming to Processes, trademarks, IP etc.
Traditional Biz
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Business Systems and Processes already being proven, one needs to focus on personal efforts and following the system only. Existing, working model enhances chances of success.
Unforeseen, unanticipated, new challenges at every step. Can get into a roller-coaster ride, hence affecting productivity and bottom-line. Statistics prove that more than 95% of new businesses fail in the first couple of years.
Traditional Biz
Primary source for this slide share presentation: http://kidsconcepts.in/what-is-the-difference-between-a-franchise-and-traditional-business/
Trends in the $24 Billion Indian franchise market: http://www.franchiseindia.com/articles/Research/Latest-Trends/Franchise-trends-that-entrepreneurs-can-t-miss-in-2015-724/
KPMG and FAI report on Franchising industry in India:
http://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/Collaborating_for_Growth.pdf
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