UK Franchising: Profitable Partnerships?

Whilst franchising remains one of the fastest ways to grow and expand a business, does it also mean that it opens the door for those who want to get rich quickly with little or no regard to the ones, who trust them and invest their hard-earned cash into such "franchise" schemes? Who benefits the most from franchising? What can one do to ensure that they don't fall into the "bad franchise" trap? And should franchising finally be regulated in the UK?

Breeze Blog by Breeze & Wyles Solicitors LLP: Need a Will but no time to see Lawyers

Breeze Blog by Breeze & Wyles Solicitors LLP: Need a Will but no time to see Lawyers: New Online Products available – more to come! Today Breezeplus launches free and pay-to-download online documents. Breezeplus are delighte...

Breeze Blog by Breeze & Wyles Solicitors LLP: Merger and Acquisitions: What is in it for me?

Breeze Blog by Breeze & Wyles Solicitors LLP: Merger and Acquisitions: What is in it for me?: The reasons to consider an acquisition are relatively small in number and are set out below. However, it is important that this is a process...

Preparing your business for investors

Business owners often view investors as an alternative to bank finance. In most cases entrepreneurs would seek to raise external equity because they are running out of cash and were turned down by a bank. The only message that investors would receive is that the entrepreneur lost control of their business regardless of how you dress the situation up. If you were an investor, would you want to put your hard-earned cash and invest significant amount of time in such a venture?

So, when is the right time to start raising external equity? And what can one do to ensure that the business is ready to attract and secure investors?

Succession Planning: Business owners favour MBO as means of selling business

Whilst the economy continues to wobble with an increasing number of vendors struggling to find trade buyers for their ventures, more and more business owners are considering management buyouts (MBOs) as an option of selling their businesses.

How can businesses survive in today's economic climate?

In the article “Has Western capitalism failed?” the BBC World Service’s Business Daily programme asked a number of leading figures if they thought whether the Western-style capitalism failed. The answers (and some of the comments) are worth a read. It would appear that those interviewed by the BBC are unanimous in their comments that the system itself hasn’t failed, but rather its interpretation by those who use it.

Breeze Blog by Breeze & Wyles Solicitors LLP: Can't Pay, Won't Pay - How to get results

Breeze Blog by Breeze & Wyles Solicitors LLP: Can't Pay, Won't Pay - How to get results: Cash flow to most businesses in these difficult times is a key business objective. If your business is suffering through slow or non-payers, what options do you have?

You might find some answers on this Breeze & Wyles' blog article regarding debt recovery. One thing to consider when dealing with slow and non-payers is how to prevent this from happening in the future...

Breeze Blog by Breeze & Wyles Solicitors LLP: Business must keep a Close Eye on Web Law

Breeze Blog by Breeze & Wyles Solicitors LLP: Business must keep a Close Eye on Web Law: If you own a website, then you'd be wise to keep an eye on what changes in Web Law might be introduced. Read this article to find out more...

Retiring Business Owners Need Not Struggle to Sell Their Ventures

In the article, Shortage of Buyers for Retiring Vendors, in The Telegraph of 13th December 2010, Richard Tyler talks about difficulties that business owners encounter when they are looking to sell their businesses and retire.

He says that vendors struggle to find buyers for their ventures due to the uncertain economic environment and face closing their businesses instead or continue running their firms into their late 60s. Staff may also find it difficult to raise the necessary finance to buy owners out because of bank lending policies.

Although potential investors might not pay the multiples that we saw only 3 or so years ago, there are a few things that baby boomers can do to ensure their comfortable retirement:

• Business owners ought to start looking at Exit Strategies early in the process. This will allow them to set their goals and targets and monitor their business's performance
• Set realistic expectations in terms of the price they want for their businesses. When selling a business, most owners will engage the services of their accountants and business brokers. We often see overinflated prices whilst bidding wars commence; however, it is the seller that is left disappointed in the process as their business "sits on the shelf" for months or sometimes years
• Get an independent valuation carried out early as it will give retiring business owners a better understanding of the areas they may need to improve
• Vendors may want to consider selling their businesses to staff and should involve their existing management teams in advance to avoid a bitter disappointment when their staff cannot come up with the cash
• Engage professional services: business disposal experts, such as M&A lawyers, corporate finance specialists and business advisers will add value and help owners to get closer to their target price
• Review and streamline processes and systems in the business to make it more attractive to potential buyers. After all, investors would be more willing to pay the price closer to what the owners have in mind when the business is running "itself"
• There is also another option available to retiring business owners: Deferred Consideration. It is often more beneficial and profitable when part of the money is deferred for 3-5 years. The sellers will get part cash up-front and the remainder at the end of the term. This will remove the pressure on the buyer to raise the whole amount up-front, raise more confidence in the business they are looking to buy and make the transaction much easier

Breeze Blog by Breeze & Wyles Solicitors LLP: Mergers and Acquisitions: the due diligence proces...

Breeze Blog by Breeze & Wyles Solicitors LLP: Mergers and Acquisitions: the due diligence proces...: "Buying a company is a difficult, but potentially rewarding process, which may take days or weeks depending on the complexity of the company ..."

Breeze Blog by Breeze & Wyles Solicitors LLP: Mergers and Acquisitions: the current environment

Breeze Blog by Breeze & Wyles Solicitors LLP: Mergers and Acquisitions: the current environment: "For 18 months or so acquisition activity has been dormant as shareholders have been reluctant to sell on the basis of valuations that reflec..."

New Eden

I have received an interesting article from a friend and a colleague of mine, Dave Croydon, which I would like to share with you and hope you find it as interesting and thought-provoking as I did...



An acquaintance of mine recently expressed the opinion that anyone who showed any desire to become a politician should automatically be disbarred, as a result, from ever becoming one. It ranks alongside Groucho Marx's comment that he wouldn't want to join any club that would have him as a member.

This was brought back to me forcibly a week or three ago, when I heard interviewed on the Saturday morning Radio 4 programme, Saturday Live, Tim Smit, the man behind the Eden Project - and therefore someone for whom the word 'Vision' can be taken as built in.

He was asked for his recipe for getting the country out of the mire, as opposed to the current lot's recipe of cuts, cuts and more cuts. His reasoned and wholly reasonable response drew mountains of approving e-mails, even before the end of the show, with many exhortations that he be made Prime Minister immediately.

The problem with politicians - it's easy to state problems: less easy to suggest viable solutions - is that very, very few have done much in their lives outside the world of politics, and the exceptions have generally been associated with large corporate Britain. When it comes to the SME market, they may talk a good story, but really they haven't a clue. Even the sainted Vince.

So the sector that represents up to 95% of the British economy's economic output, and by common consent where any growth and recovery will gestate, is being hog-tied by rules and regulations designed with corporate Britain in mind. I've railed about this before (and will doubtless do so again), but the contrast between existing policy and Tim Smit's ideas could not be starker.

So what was he recommending?

AN ALTERNATIVE STRATEGY FOR GROWTH

Reproduced below is a more or less verbatim quotation of the Eden Project's Tim Smit's recipe for growth. Since I couldn't better it myself, I thought I'd share it with you. I took the precaution of re-visiting it on i-Player, to make sure it's accurate.

Interviewer: "Why is Britain such a risk averse nation?

Tim Smit: "1. Most of the politicians we've got in charge have never had a day job. [That's what I said - Ed]

"2. Most of the people in charge of distributing money have only ever made their money on the back of speculation, such as betting against their own currencies, and have given up the tradition of investing in people who make things with their hands.

"3. This country's wealth was built on the back of men and women who made things, and now it's actually the financial world, which does not trust the men and women who make things; they want to bet on currency.

"4. If you're ruled by an accountancy fear, where you know the cost of everything without understanding the cost of not doing things, you can bring yourself to your knees.

"5.You can kill a company in your desire to constrict access to money, because that's the prudent 'mumsy' way to do things."

Interviewer: "So what would you do?"

Tim Smit: "Blow a lot of money: I'd do exactly the opposite of what is being done now. I'd commit myself in a crash and burn style to transforming the technology and energy infra-structure of this country. By doing it, you will build on what's best in Britain, which is its engineering skill. If you give it that impetus, you'll become a world leader, and the market will then follow you, and the investment will be seen to be worthwhile."



In my next missive, I'm going to re-vist this theme with a few thoughts of my own on, in particular, the existing energy policy of successive governments, and the huge potential for massive structural change that is currently being missed by the usual suspects with little or no vision.

You can listen to the interview at: http://downloads.bbc.co.uk/podcasts/radio4/satlive/satlive_20110212-1125a.mp3

Sometimes, the most effective response to any given situation is the exact opposite to the apparently obvious one. Many fortunes have been gained by buying shares or property when everyone else was selling. There are supporters of 'contrariness' who will assert that it is nearly always better to go against the grain of general public opinion. Why would that be? Answers to the e-mail address below.

David Croydon: 01844 238692 or e-mail: dave@hilltopconsultancy.co.uk

Increase Your Margins by Managing Your Costs

In today's economic climate with budgets being cut across the board, the UK economy contracting in the last Quarter of 2010 and inflation rising, both Public and Private sectors are looking to maintain their financial stability. A decision to increase prices is a sensitive issue and could prove to be unpopular with customers. It is a gamble that all organisations face. Cutting costs could be a way forward. However, one must be careful how far and how deep those cuts go, as inevitably such cuts may cost an organisation a lot dearer than leaving things as they are.

The Value of Time

In the past year, I have met quite a number of Business Owners, who, first, were complaining about the recession and how difficult it was to get by and business was slow and that nobody was buying; and then, once they got tired of complaining and loss of business (those that were lucky to survive), decided to get busy and get some business.

Well... I think what they meant by “business” was “busy-ness”... I have been watching their progress with great curiosity and here are some of my observations.

The Language of Sales: Will Your Customers Keep Buying From You?

Despite a shift in customer attitudes and behaviours, companies are still "talking down" to their clientele by telling them what to do in the hope to persuade them to buy their services or products.

When it comes to sales, those days are long gone. All it takes is a subtle change in your marketing language to produce noticeable results. A change in customer attitudes over the past couple of decades means that they have switched from needing external direction to deciding for themselves whether to buy or not to buy. They compare offers to each other in search for a better deal. In other words, they've gone from "compliant" to "decisive" — they no longer want to be told what to do and they are in control. But while many companies understand this shift on an intuitive level, they have yet to adopt the right language and approach with their customers.

Organisations that invest in research to understand exactly what makes a customer buy have had great success. They use the information to create their branding, design advertising campaigns and to train their staff on the exact language to use (or avoid) with customers — and they reap astonishing results.

So, what could businesses do differently to influence their customer decisions?

• Rethink your message: how you address your customers will affect your sales. Some companies are still touting themselves as "the best" or "the right choice". These firms essentially tell customers what to think and what to do, which is no longer an effective strategy.
• Put yourself in your customers' shoes: notice how you react when told what to do. What's your response when you're presented with claims that don't "hold water"? Don't you trust those organisation that keep on insisting how much they care about you through their TV adverts? How would you like to be approached instead and what message would strike accord with you?
• Review your language: apart from checking your spelling and grammar (and I've seen a few corporate blunders), review your marketing materials and look for examples of commanding and suggestive language.
• Fine-tune your sales approach
• Invest in staff training: once you have streamlined your language and your message, invest in staff training to ensure that you manage customer expectations versus your promise to them.
• Test and measure: listen to your salespeople as they talk to customers. Do they make suggestions or assertions? There is a big difference between "This is what I think is best for you" and "Here's what I would suggest/recommend for you to consider." The first is a statement and implies a command to the customer, whilst the second is a suggestion to consider.

Of course, customers' attitudes are constantly changing in many ways and the change from being told what to buy to being offered a suggestion or consideration is just one of them. It is still a call to action but in the way where customers come to a decision themselves (with your help). And even if you only address this one change, your customers will notice and appreciate the difference in your approach.

Selecting the right Franchise Development Consultant

All businesses must continue to grow in order to stay in the game as otherwise they run a risk of stagnating and, eventually, ceasing trading. Those businesses that survive the start-up period inevitably arrive at the point where they need to get to the next level in their life cycle.

As one of growth strategies, franchising allows smaller companies to effectively compete with larger businesses. Franchising provides businesses with the ability to gain market share by increasing their points of distribution. Franchises are generally able to grow and expand their businesses faster than conventional businesses and franchise expansion requires minimal capital as the initial investment at the unit level is covered by franchisees. Franchise brand’s growth is not limited to one or two locations; franchising offers the opportunity to have multiple units throughout the country and the world. Usually, the success of a business depends upon its location and/or the staff. The fundamental principal for the success of a franchise is its ability to replicate its success.

Many business owners make countless regrettable decisions along the way. The decision of expanding a business through franchising is never an easy one and requires careful analysis and assessment of the business and its potential, thorough research and planning. Business owners could achieve the lifestyle they desire in much shorter timeframe whilst retaining that unique feel in their business as it grows and expands nation- and worldwide.

Developing a successful concept and business model is one thing, but franchising a business, developing a much larger network can be a daunting and complex process. Building a franchise is like constructing a building – get the foundation wrong and the results could be disastrous. Understanding franchising in all its aspects is essential before committing resources to its development. Taking professional advice can save a considerable amount of headache, time and money through the various stages of franchise development. An independent third party advisor who has many years of experience can bring great benefits to any individual or company considering franchising.

Selecting the right Franchise Development Consultant for your business should be no different to a selection process of any other supplier. A couple of other things to consider are:

• Experience: a good and established franchise specialist would have not only an in-depth knowledge of the franchise industry, but also a great deal of experience in developing businesses and should be able to demonstrate a comprehensively professional approach to advising their clients. After all, apart from working on taking your business to franchise, the core business needs to be developed in parallel with the franchise in order to minimise risks and ensure success.
• Continuity: consider whether your adviser is a stand-alone consultant or a part of a larger organisation or network. Businesses that use services of Business Advisers who are a part of larger networks are more secure in thought that their businesses are well looked after.

One thing I’ve learned over the years is that a step-by-step approach is vital.

To Franchise or not to Franchise?

Business owners who are looking for advice on how to grow their business, ought to consider franchising as an option.

So, the Tax Man does have a sense of humour...

Who said that Tax people don't have a sense of humour? This is a reply received from HM Revenue and Customs. The Guardian had to ask for permission to print it.

Dear Mr ,

I am writing to you to express our thanks for your more than prompt reply to our latest communication, and also to answer some of the points you raise. I will address them, as ever, in order.

Firstly, I must take issue with your description of our last as a "begging letter". It might perhaps more properly be referred to as a "tax demand". This is how we at the Inland Revenue have always, for reasons of accuracy, traditionally referred to such documents.

Secondly, your frustration at our adding to the "endless stream of crapulent whining and panhandling vomited daily through the letterbox on to the doormat" has been noted. However, whilst I have naturally not seen the other letters to which you refer I would cautiously suggest that their being from "pauper councils, Lombardy pirate banking houses and pissant gas-mongerers" might indicate that your decision to "file them next to the toilet in case of emergencies" is at best a little ill-advised. In common with my own organisation, it is unlikely that the senders of these letters do see you as a "lackwit bumpkin" or, come to that, a "sodding charity". More likely they see you as a citizen of Great Britain, with a responsibility to contribute to the upkeep of the nation as a whole.

Which brings me to my next point. Whilst there may be some spirit of truth in your assertion that the taxes you pay "go to shore up the canker-blighted, toppling folly that is the Public Services", a moment's rudimentary calculation ought to disabuse you of the notion that the government in any way expects you to "stump up for the whole damned party" yourself. The estimates you provide for the Chancellor's disbursement of the funds levied by taxation, whilst colourful, are, in fairness, a little off the mark. Less than you seem to imagine is pent on "junkets for Bunterish lickspittles" and "dancing whores" whilst far more than you have accounted for is allocated to, for example, "that box-ticking facade of a university system."

A couple of technical points arising from direct queries:

1. The reason we don't simply write "Muggins"on the envelope has to do with the vagaries of the postal system;
2. You can rest assured that "sucking the very marrow of those with nothing else to give" has never been considered as a practice because even if the Personal Allowance didn't render it irrelevant, the sheer medical logistics involved would make it financially unviable.

I trust this has helped. In the meantime, whilst I would not in any way wish to influence your decision one way or the other, I ought to point out that even if you did choose to "give the whole foul jamboree up and go and live in India" you would still owe us the money.

 

Please send it to us by Friday.

 

Yours sincerely,

 

H J Lee

Customer Relations

HM Revenue and Customs

Know The Value of Your Business

We, as well as our businesses, are all different. We are at different points of our lives and our respective businesses are at different stages of business life cycle. We all, however, have one thing in common. At some stage of our lives we will look to retire. Some of us will retire sooner than others, of course depending on how well the business is doing as well as how long we intend to stay in business, what we want to do with it and, if we sell it, how much we will get for it.

Business: Can't Grow OR Won't Grow?

Over the past few months when I was talking to numerous people about their strategies during this recession, I was amazed at the number of people saying "business is slow so we need to cut our costs down on staff, training and marketing" or "just sitting tight and see what happens". When I asked someone if they had considered an expansion strategy instead, they just laughed and walked away. We all seem to find an excuse not to do what is required and needed to move our businesses forward and, subsequently, the economy. Of course, it is easier to blame the government, banks, Americans (now that the Cold War is over and we can't really blame the Russians)... But how about taking responsibility for our actions? What's wrong with accepting ownership for our own businesses? Do you think that your bank will do it?

Instead of fighting and pulling together, it seems as though as this country is falling apart. We all seem to have accepted the defeat. COME ON, BRITAIN! Just ask yourself: if we all "sat tight" and did nothing, then who would we do business with? Who would buy our products or services? Who would know about us? We might as well look at that grand idea of Karl Marx and Lenin, called Communism, and consider living for non-profit and just do barter deals. We don't need money, do we?

Well, here's a thought for you to consider. YOU CAN GROW YOUR BUSINESS! How? Well... Read on...

One of the fastest, easiest and safest ways to grow your business (and there are a few) is franchising. Please allow me to demonstrate why:

UK Franchising:

• There are currently over 809 franchise systems in the UK, which equates to 84,274 businesses
• The franchise industry is now estimated to be worth £12.4 billion
• There are an estimated 383,000 people employed by franchises
• The vast majority (91%) of franchisees say they are profitable
• More American-based franchises are looking to expand into Europe
• Franchisors are seeking to grant over 190,000 franchise licences to aspiring business owners across the UK
• The number of franchises in the UK has risen by 3% in the past five years

Opportunity:

• There are currently over 2.22 million people unemployed in the UK
• Average redundancy payout is over £5,000
• Redundancies and uncertainty about jobs are making thousands of people to seriously consider investing into a franchise
• On average there are 22,000 global searches per month for people looking to buys a franchise
• Approximately 2,000 searches were made in the UK during the month of April alone!

So, I hope that you see the potential from the above... I do not believe that there are no possibilities of growing your business out there and all of the above demonstrates it. If you don't do it, someone else will!

Imagine now, what income opportunity this could generate for you?... Now, have I got your attention?

(Sources: BBC News, The Franchise Magazine, Which Franchise?, UK National Statistics, The UK Franchise Directory)