By Jeff Elgin, Entrpreneur Magazine Sept 2008
You want a franchise business, but not just any old thing – you want something big time. We’re talking about a multimillion-rand enterprise. So how do you go about accomplishing that goal? The easiest wat to do this is to simply start at the level. Buy yourself a multimillion-rand operation from the get-go, and you’ve already arrived. Of course, the challend with this approach is that most people don’t have the capital available to purchase such an operation or the experience to run it effectively once they buy it.
Being Realistic
For most of us, if we want to “hit it big time”, we’re going to need to grow to that point rather than start there. It may take a little longer that wat, but the advantage is that you’ll have learned everything you need to know to run the big operation along the way. You’ll also have built a huge equity stake that belongs to you, because you created it with your won sweat and perseverance.
You ca use a number of different strategies in this building process. First you have to decide what type of franchise business model you want to be involved with. Most franshises fall into either the “owner-operator” or the “executive” model of business. In the former, the assumption is that the owner will work full time in the business, managing an individual unit and/or delivering the product or service ro the customer. In the executive model, the assumption is that the owner will hire a manager to fulfill these tasks at the individual unit level.
Making it big as an owner/operator
To build a really big owner-operator business, you’ll need to make sure the concept you’re starting with has the potential to grow a single operation to this level. If it’s a territory-based service business, for example, you need to know that the territory has sufficient population to support a multimillion-rand volume of sales. Even though, in this circumstance, you’re focused on an owner-operated business, you should be aware that most owners who grow such an operation to this sieze end up adding more layers of management into their business over time to help deal with all the volume.
Steering the ship: The executive model
The more common form of business model for franchisees wanting to build a huge business is the executive version. In this situation, you’ll probably build a number of units that operate indepentently of one another to deliver products or services to the customers, each managed by different people who report to an executive up the organisational chart (probably you, at least in the early staged of growth).
October 22, 2008
Franchises