Howard Stevenson of the Harvard Business School defines entrepreneurship as “exploiting an opportunity regardless...
Howard Stevenson of the Harvard Business School defines entrepreneurship as “exploiting an opportunity regardless of the resources currently available.” Adding to this, he elaborates “the key to this perspective is the focus on opportunity” (not on resources).
With a wide range of rewarding business prospects in the country, the business fraternity has experienced a boom over the past few years.
Entrepreneurs and other investors are stepping forward to spend time, efforts, skills, expertise and money to establish their own business.
Entrepreneurship involves several kinds of risks—strategic, financial and operational—associated with it. An entrepreneur undertakes the risks ranging right from the inception of the business idea till the time the business is established. With the advent of stiff competitors, it is a wise man’s decision to opt for such a route that shall not only be rewarding but less risky as well. It requires a great deal of efforts to start a business in any sector. But a budding concept for establishing a business for any entrepreneur is to tread on the franchise path.
The concept of franchising has created a stir in the business sector, offering great business opportunities to young entrepreneurs to climb the ladder of success . In its true sense, “Franchising is being in business for yourself, but not by yourself.”. The growth of franchising is inevitable because it offers aspiring new business owners the best possible chance of succeeding.
Pleasing for beginners: By presenting a proven business model, coupled with hands-on training, franchising is capable of transmuting novices into accomplished entrepreneurs.
Sense of independence: Franchising means you are your own boss as you don’t need to reinvent the wheel.
Proven blueprint: After venturing into franchising, an entrepreneur is legally entitled to adopt the franchisor’s tried and tested business model and code of conduct. Thus, an entrepreneur will reap the benefits of a proven track-record of the franchisor.
Reduced risk: The risk of failure is comparatively lower than starting a new business. This is so because when an entrepreneur buys a franchise, he/she buys the system that works.
Easier finance: An entrepreneur receives financial assistance from the franchisor, as he/she makes arrangements with the banks and other financial institutions to lend money.
Low on cost, high on returns: The primary benefit that a franchisee reaps is the low cost of investment. This is due to the reduction of costs and the savings made in administrating and advertising the franchise outlet. Moreover, association with an established brand name ensures assured profits and return on investments.
Mentor and peer support: With the support and guidance from the mentor, an entrepreneur becomes competent to conduct its set of operations, in a stress-free way.
Develops faster customer base: Once an entrepreneur gets associated with an established brand name, it becomes easy to fetch the targeted consumers. This is due to the strength of the brand and loyalty of the customers.
Exclusive territorial rights: By venturing into a franchise, the franchisor guarantees predetermined territory to the franchisee that assists in succeeding within that region.
Franchise investment is one of the safest businesses that involves less cost and more revenue. Besides this, indulging in business franchising is a win-win situation for the three parties involved—franchisor, franchisee and the end-user of the product/service.
By Amol Arora
The author is vice-chairman and managing director, Shemrock and Shemford Group of Schools