Why franchising is a good idea part 2
Last week we started a ‘why franchising is a good idea’ series and explained how the Small-and Medium-Size Enterprise (SME) sector holds the key to the engine rooms of economies all over the world, South Africa included.
This is reflected in the National Development Plan’s vision that by 2030, 90% of all jobs will be created by SMEs. But to get there, small businesses will need to survive first, and flourish second.
We often hear about the need for entrepreneurship. The failure statistics for small businesses created from scratch are high. Again, that’s true the world over, not just in South Africa.
But franchising offers a very attractive alternative to starting a small business from scratch. To be clear – franchising is not a natural panacea; rather it’s an attractive proposition for entrepreneurial people who want to invest in the support structure offered by a franchise business.
Prospective small business owners who invest in lucrative franchises have the safety net of a business that works. Systems and processes are already in place, giving them the best possible chance of success because they are able to focus their efforts on avenues that will grow their revenue within the confines of a tried-and-tested model.
Our CEO, Richard Mukheibir, often says that franchisees, especially in our business, are people who want to work for themselves, but don’t want to be left by themselves. “This means that a reputable franchise business like Cash Converters will provide ongoing support to its network of franchisees. This support provides the best possible chances of success and includes everything from assistance with business plans to processes and systems, and much more,” he explains.
Very important is to have a resilient business model. It’s ideal to have a service or product that flies during both the good AND tough times. A successful franchise operation allows franchisees to create new businesses in the good times that can keep their doors open, and jobs secured, during tough economic climates.
Franchising works well because the business provides various levers for creative, entrepreneurial owner-operators to push or pull, depending on the local and larger economy. If part A runs dry, turn up part B and C, and so on.
In essence, SMEs do have the potential to make a meaningful dent in the country’s unemployment and economic prospects, but only if they are supported and given the best possible chance of success. Franchising is one way this objective can be achieved.
Alternatively, if you are interested in attending a webinar hosted by our CEO, Richard Mukheibir, where he unpacks our unique business model, please email Nicole Gundelfinger at [email protected] to enquire about these.