The Advantages Of Franchising Business Essay
What are the reasons for Anna to buy an existing business? What other important factors she should have taken into consideration before buying this business? (20 points - 250 words)
Answer: Anna had many qualities that made her take the decision of buying the new business. Actually Anna loves making people look best. Thus she already possesses qualities of a good fashion designer. She is also doing a job. But along with that she had an entrepreneurial spirit with a lot enthusiasm and vision to spare. Thus even when she lacked important business skills and experience, she wants to start her own business. When a trendy fashion design salon was on sale, she quickly picked up the opportunity and started doing business at her own.
Anna took the decision of buying the business of trendy fashion design on sale without taking consideration of various other factors. These include the followings.
Brand image in the market:
The Brand image of the company is not so good. The company is known for keep old designs which are not any more favorite of the people who are always looking for new.
Managerial problems of the company:
The management of the company is putting extra expenditures on the cost of production that it becomes really difficult to place the products at genuine prices.
Financial status of the company:
The financial crunch of the company and its movements towards failure is another reason that should have been considered before buying. Thus it is very important to look for debts situation in the market that may arise again after the purchase of the company.
Existing stock with the company:
The existing stock of the company consists mostly of old fashioned products, which are no more liked by the people. Thus the blocked stock may prove to be an extra burden on the company which must be sold, or its storage expenditure is going to borne by the company itself.
The ability and personal characteristics of an entrepreneur exert a powerful influence on the success of a small business.
Explain the characteristics and skills of a successful entrepreneur emphasizing on Anna’s skills that contributed to the success of her business, and analyze how she improved the financial performance of the business and overcame the difficulties knowing that she didn’t have any managerial background. (20 points - 350 words)
Answer: It is rightly said that the ability and personal characteristics of an entrepreneur exert a powerful influence on the success of a small business. Actually Anna lacked key managerial skills for her newly owned business. But the professional team helped her a lot. They helped her develop as a perfect business person. After remaining in touch with the experts Anna slowly developed all the skills required to take all managerial decisions wisely. For instance she took the decision of brining latest fashion in stores with a limited stock. This way the designer clothes could not repeat and will also not pile up as a dead stock. Instead, newer clothes with latest design will come to store from time to time.
Furthermore she improved management level employee’s productivity from which extra delay and expenditure was observed. Finally she introduced new designer clothes at highly competitive prices which attracted the customers so much that they would rather be tempted to buy now or they stock may end next time they come to the store.
Thus from just an ordinary employee who was worrying that she is earning lesser than being an entrepreneur, she started earning 30% more than from the point she started. Also the sales figure shoot up and the result was that company became successful in administrating a good brand name with good profit figures in hand. She became more successful as an entrepreneur later on. Thus worry for small loses or decline in income in the start; she started earning better than the one she used to earn as an employee. Thus she shifted from being just a wage earner to wage giver.
Anna now has developed as a business person and a good manager as well. She learnt from her professional team about the various management techniques which give her a good idea of the ground realities of business, the strength and weakness of her business and along with that she learnt various marketing techniques. These techniques helped her in improving the production, sales and other requirements for the business to make it stand back again on its own feet’s and earn profits.
The professional team was of a great help to Anna and helped her develop as a person and as a business owner. Anna became extremely clear about her brand as well as about the strengths and weaknesses of her business. She began to implement her marketing and focus on developing persuasive messages to target her clientele.
Discuss the advantages of franchising according to John and to your own experience and knowledge. (20 points -250 words)
Answer: Franchising according to John means a big brand name behind, with an ongoing support for different aspects of business. This includes product knowledge, sales and training development. This is so correct that the business which starts from scratch requires time and experience to develop. This time consumption may reach up to years. In between the business person may lose hope and even shut down the work.
Thus franchise has many benefits. The advantages of franchising are as below.
No fear of shutdown of business even after years of hard work.
Good income level can be earned through franchise.
Technical support available 24 hours, which could help not only the seller but also the customer in upgrading not only the tools but also the skills.
Reliable products are available in the market which meets the technical specifications.
The investment may look comparatively higher than normal business, but later on the returns on investments proves it to be a cost effective task.
Proper training and development programs are held from time to time to make the customer’s aware of the latest products and techniques introduced by the company.
Advertisements help in increasing the sales of the company products.
Schemes and offers further helps in decreasing the cost of products and earning good profits from its sales.
The franchise business gets support from the 24 hour support system regarding the dispatch of the products, goods and services to the shop of the seller.
Do you think that acquiring a franchise is sufficient alone to run a successful business? Justify your answer, and explain what was behind John’s success of running Mac Tools franchise. (20 points - 300 words)
Answer: Acquiring a franchising is just not sufficient enough to run a successful business. Along with that a person needs to work hard and give time to the business. According to John also everyone can reach the high level of success which he gained. And for that he suggested the followings.
To work hard for the newly set up franchise business.
To be regular at work. That is to open shop regularly so that the customers can identify the place well and come and place their orders.
To keep stock of the company in full variety and quantity. This way the shop becomes reliable to the customers. The customers develop a thought that the specific shop consists of all the items and products of a particular company.
Efforts regarding the up gradation of the work place, the stocks and other required to be done from time to time.
The updating of knowledge related to the various new products of the company, regarding its features and its valuable usages helps in bringing new variety for the shop which can help attract more customers.
The support of the better half would also help the business to develop. For instance, in this case, when ever John was out to deliver the consignment, his better half was behind at shop taking care of the stock and noting orders for John, which he could place when he comes back.
To remain in contact with the 24 hour support system helps in answering the queries of the customers of the company’s products and services. This way the business owner would not unhappy any customer due to any issue that may arise.
Proper investment of money and time is required to meet the goal of successful business.
Thus just by opening franchisee shop would not make any difference. A franchise shop may give a good start, but the rest depends on the service and hard work done by the owner of the franchisee business.
If you were to start your own business, would you wish it to be a small business or an entrepreneurial venture? Would you go for a franchise or an independent small business? Justify your answers and mention the type of activity your business would be involved in. (20 points - 350 words)
Answer: If I were to start my own business than that would be of franchisee business. The franchisee business start may look a little costlier. That is the investment in the franchisee business may look expensive but later on I am sure that I will reap good profits. Reason being that the franchise business comes with a number of advantages which helps the new business person to stand at its own.
If I start a small business or independent venture than in that case I would be needing expert advice, years of experience and finally patience. No business today can become successful in an instant. A business person has to wait for the new business to develop and grow with time.
With the franchisee business in hand, I would get a good start. My business identification would be easily be done by the people. As the franchisee business comes with an added feature of advertisement. Thus with advertisements on various mediums with my shop mentioning and identification will help people around me to know my business place. This way I will get a good customer base to start.
But opening a franchisee business is not enough. Hard work, time devotion and faith are few things that should be remembered along with that. That is even a franchisee business will lose its glory if the business owner does not take interest like investing time at work place looking for the staff to be working well, watching for the comforts of the customers, remaining in contact with the demands of the customer and even fulfilling them on time will help develop a brand name of the shop of its own.
This way the shop would be identified as a stockist of the company where all the products are available. What would people do when they find a franchisee business place with no product range found at that place? Thus it is very important to keep in contact with the demands of the customers, give them facility of transport and offering them variety products of the company at competitive prices. Thus this is the only way to make the franchise business successful.