Using China Business Strategy To Grow Business In India: Adopting Different Country Learnings

With the world globalizing and inter-country collobaration is on its highest ever there are learnings that are transfered from one region to the other.When multinational brands entered and tried to conquer market share in the Middle Kingdom 20 years ago, they encountered the same problems they face in India now – how does one market effectively to such a diverse market, where statistics are unreliable and tastes change often, yet sell in a value driven economy? In lieu of encountering a similar market in the same region with alike issues, many companies are replicating best management practices adopted successfully in China in the Indian market.

With economic and cultural similarities and purchasing decisions aligned, marketing managers across multinational companies are bringing their best marketing and distribution ideas tried and tested in China to India.  Take Coca Cola for example, known for its revolutionary, fierce and strong branding, the company recently asked its independent franchisee bottlers in India to weigh a new distribution and manufacturing model it follows in China. The new model involves pooling investments and setting up common manufacturing capacities, and would mainly be for non-carbonated drinks. The Atlanta-based beverage maker’s top brass discussed benefits of shared resources and pooling investments with its franchisee bottlers last month in Shanghai, China

Under the proposal, independent bottlers would split their investments and share the returns equally among themselves. As bottling investments take about five-six years to bring returns, the move would help the bottlers in freeing large amount of money, a model that is expected to work in nations like China and India where distribution of aerated drinks in a problem and large investments are hard to come by.

Hence it is interested to see how these new strategies define the way businesses are transacted in the coming times in these developing countries and how these business expansion strategies, will unfold in the coming times.

Tags:Business Strategy, Expand Business, Grow Business, Business Consultants, franchise consultants, how to expand business, business expansion strategies, franchise recruitment, franchise development,

This Blog/Information/News Item/Press Release has been posted by Sparkleminds, A Franchise Consulting Company Based at Bangalore,India, Offering Complete Franchise Solutions Nationally and Internationally for more than a decade now.Visit www.sparkleminds.com for more details.

Bangalore Franchise Expo June 5/6 2010.

BANGALORE: Buoyed by the success of the Times Franchise Expo Series 2009, The Times of India is conducting Times Franchise Expo Series 2010, covering eight major cities across India.

Having completed 32 expos since launch, Times Franchise Expo has proved to be the most successful B2B marketplace and has successfully completed exhibitions in 16 cities across India. With more than 300 brands having participated in Times Franchise Expo, over 3 lakh business visitors have attended the shows.

The Times Franchise Expo Series 2010 begins with an exhibition at Bangalore on June 5 and 6 at Nimhans Convention Centre, Hosur. This will be the 33rd exhibition in the series.

This Franchise Expo will provide a proactive platform for entrepreneurs seeking new businesses and business owners seeking to expand their existing business to interact with franchisers and franchise experts. Representatives from companies will discuss their business models with the entrepreneurs.Franchise consultants will help you with franchise development, franchise agreements and everything to do with franchise your business. The exhibition will showcase several business opportunities from renowned companies with investment range starting from Rs 50,000 going upto 5 crores.
Exhibition timings are from 10.30 am to 7pm. 9844443277/9844443200

Tags:Franchise Expo, Franchise Consultants, Franchise Bangalore, Franchise Bengaluru, New Business Bangalore, New Franchise Bangalore, Bangalore Business, Bangalore Opportunities, Franchising Bangalore,

Franchise Expansion Of Your Business In India: Whats the perfect recipe for a succesful franchise rollout:

7th April, Bangalore, India. 15.00 Hrs.

What Most Business Owners/ Franchisors Must Know before they start expanding their businesses through franchising.

Yesterday, another franchisor met us, keen to expand his business and trying to explore the various options, he had on hand. Like most business owners who are seeking to expand their business in India, the dilemmas were the same, as is the case generally from such entrepreneurs. So I thought, for the use of such franchisors, I write out this blog, to inform them, firstly, these are common hurdles that most businesses that want to expand using the franchise route in India, face. Secondly, it is very important that you learn quickly from the knowledge base available around you and look at franchising very deeply, instead of experimenting with franchising. I am going to run you through the interaction I had with this franchisor, which is in the ice cream business and has a popular brand in one of our bustling metros. For me, he is the classic example, of all business owners who have a successful business and are thinking of franchising or have already begun franchising and have a few franchisees.

He has been operating for a couple of years now and has been receiving several requests from customers to take up his franchise. After discussing the situation on hand and with guidance from a few friends and well wishers, he went ahead and signed up a couple of them. Instantly, he realized, this was much more than just teaching a franchisee how to do his business. From, thereon started, the everyday nitty gritties of how should he deal with the franchisee on ‘this issue,' and the issues were many. Infact one of them discontinued the franchise and is still continuing the business, but in a different name. There would have been the definite daily issues that most franchisors and franchisees go through whilst the reality of what they get from the marriage, comes on screen. The franchisor did tell me, that he knew it would be difficult, but then he was ready to learn from the mistakes, he would commit, amend them and move forward. I liked his willingness to adopt and the honesty to do his best. These alone would not be sufficient for me.

I was smiling from within, thinking why does one need to take the difficult path, when experts like us, can guide the franchisors with the most common mistakes that they commit. (Not that they are not going to make mistakes, alongside us, but then, they would definitely not be elementary or the basic ones, that hurt franchising the business most). There is a clear learning curve that we have gone through while working for so many clients in the same domain specifically and franchising more microscopically, that the franchisor, could quickly learn, adapt and run...instead of getting up, falling, crawling, falling and then get walking. In fact, that's the very reason, that we bring in the best practices from different business and segments, into every business that we are franchising, and that, not necessarily is what your competition is doing or other companies in your industry following.

The other thing off course being the present market dynamics. Does he have the liberties of the 80's / 90's when he would have had the time to expand and could take his own time, while the competition is limited. This is the case with most business owners in our country today. There is so much of learning available, all that they need to do is look around for specific experts and move forward professionally, instead of thinking of doing it from scratch, all by themselves. You always hire an architect and a contractor engineer, before you build your house, you don't do it all yourself. Why re-invent the wheel, when it's already done for you. India has been franchising from the late 80's and there is a lot of localized learning's that is already available across different segments.

The franchisor on the other end was continuously thinking of getting a few more franchisees, which were when, he decided to participate in a franchise exhibition and was ready to sign up a couple more. The general perception being, that you have thousands of entrepreneurs lining up for these franchise shows and you could easily get a couple of them to sign your franchise up. A franchise exhibition organizer once pitched to us that we will have in excess of 10,000 new business seekers visiting the show and all you need is 0.05% conversion out of that to have 5 franchisees. Another client of ours, then was excited and said lets take that to 0.01% and we have our franchise ready. In reality, that does not happen. All you do is end up spending a couple of lakhs on initial franchise marketing, which otherwise could have been spent more judicially on franchise development or initial franchise foundation laying, after which the franchise marketing and recruitment have to be carefully planned. Even if you are good at marketing and have been able to get a couple of franchisees to sign up, I am not sure that the business is ready to take on the franchisee from an operation, marketing, legal, training and other perspective. Hence you need to first lay a strong franchise foundation and a concrete franchise development programme and that would be the best way of getting the desired results at least costs.

The ice cream franchisor spent nearly a month chasing all the leads that said that they would get back, but to no result. We have also met a lot of clients who have just gone ahead and advertised in franchise magazines, franchise websites/portals, newspapers and other media's. The first thing when one thinks of expanding the business, is how will I get a franchisee, and what would I get from them. Let me prepare a projected P&L, a profitability sheet from my chartered accountant and an agreement from a lawyer (who in most cases is not a franchise lawyer), create a so-called franchise model, and get started. In a way, I am glad that clients come to us after such exercises, because its generally easier to explain to such franchisors, the task on hand, while they begin to understand the nuances of franchising vis-à-vis the ones who come fresh out of their business wombs.

What is the ideal Return on Investment (R.O.I), that I must explain, quizzed the franchisor. Will a particular % justify my claim? How should I guarantee a return...should I actually guarantee returns?

Entrepreneurs threw questions like, Will you get me the right property or will I get rent and % on sales, if I take up your franchise. What happens if we do not get the expected business, What are the terms of the franchise agreement and a million other things that each person wanted to be clear of, at the onset itself.
This is the typical cycle any new franchisor goes through. What we do here is, orient the client before hand on these questions and what repercussions, each answer has. The long term implication of the same is clearly measured and studied before deciding upon the path to be taken. That's what a cohesive franchise strategy does to a business, before it embarks on its expansion journey.

Another approach, a few franchisors take, is to hire franchise managers from the industry and then they assign the task of franchising their business, to these professionals. In most cases, the business then takes shape of the experience that these managers have had from their previous experience, and more often, limited to the areas in which they are strong. However, in most cases, we have been able to get the best out of these managers. We work closely with the organization, understand their strengths and help the owners/top management, align their personnel correctly on each of the defined tasks.

The franchisor then realised he needs an experienced franchise consultant, which is how he reached us. This has been the case with a lot of business owners who have been seeking franchise expansion services and do not have the direction to move forward or have been contemplating to hire the services of a expert franchise consulting company, but have also been parallely thinking, of whether they really need to take the complete plunge. The initial concerns are about the costs of franchising. What could be the amount that one needs to apportion to start franchising? What are the ongoing resources that would be required? A lot of successful business owners really do not have the time, from their existing business schedules, to really concentrate on franchise expansion. The ice cream franchisor seemed to have the resource allocations queries in his talk, and was trying to analyse what more will he have to put in, to get going, from where he was now.

At Sparkleminds, we take this question very analytically. While franchise expansion can be a self funding exercise in the medium term, it definitely requires initial investments, and that varies from business to business. In the long term, it not only pays back the costs of franchising, but also adds tremendously to the growth and profitability of the business. Hence, business owners who have a long term view in their mind, seek various time tested franchise solutions and want to give it the best try, engage us, while the rest of them, go about their own ways of expanding their business.

We do a lot of free franchise discovery sessions with franchise business owners who are seeking franchise development and get them prepared initially for franchising even before they engage us. Our initial discussions are aimed at franchise feasibility and basic assessment on readiness of the business for franchising. Only if the business owners pass these tests do we move forward to an engagement, or else, we ask them, to complete their homework, before getting started with franchising. We do this because we believe that this is very important for the franchise industry on the one end to have the right franchisors and that there are possibly, as many successful franchisors, that can be and on the other, it augers well for our reputation, of being associated with successful franchise companies and being a leading franchise consulting company in India.

Conclusion

Franchising is bustling in India. We have been getting requests from all kinds of businesses from party shops to mobile car service franchises, from laundry services franchises to fashion jewellery. The list is exciting and we are even more excited to serve the needs of different kinds of businesses that want to franchise. This blog highlights the typical path that these businesses take and the solutions they seek. The typical shortcuts that are taken, to save initial costs, and the long-term repercussions. The knowledge base that exists and how one can harness the franchising experience that the country already has, and what it has been learning from the finest franchise practices followed world over. When we put all of this together, we have the recipe to franchise success and that's what we want to prescribe to franchisors in India.

You only get one chance in franchising. Give it your best.

Can Professionals Start & Run a Succesful Franchise Business.

Interesting Story of How Professionals can be succesful frantrepreneurs:
For many of us cooped up in offices and working against punishing deadlines, the ultimate dream is of quitting the rat race to follow our passion and be one’s own boss. But, for most, it remains just that: a chimera that we hesitate to translate into action due to life’s practicalities. Fortunately, there are some – like Aniruddha Gharat, Vijay Kumar and Aparna Tomar – who left their comfort zones to plunge into the unknown.

Franchisees of Little Italy (managed by Shubham Foods – the company they created) the trio earlier worked in the Information Technology sector. Aniruddha says that it was IT that brought him to Bangalore but, after 15 years, he began to feel “Enough is enough”. Not that the industry was treating him badly. Far from it.

Having been with Infosys for a considerable period, he led a very comfortable life. But there was a restlessness that had him toying with the idea of setting up his own business. His wife – a dentist, supported him as he contemplated farming and hotel business. Avid foodies, they were naturally drawn to the latter.

In 2007 Aniruddha left Infosys and joined Satyam even as he evaluated possibilities in the food sector. Though bent on becoming an entrepreneur, he was concerned about having a safety net so his focus was on a franchise. “It was in the middle of this that we happened to be looking for a venue for our younger son’s birthday celebration,” recollects Aniruddha.

“Someone recommended Little Italy in Indiranagar (which closed down recently). I was impressed with the model. And it was a franchise! So I started doing homework on the brand.” Meanwhile, he talked to Vijay – former colleague, car pool partner, neighbour, long time friend and a foodie.

Like Aniruddha, Infosys had brought Vijay to the city. Equally keen to do something on his own, Vijay became part of the venture without hesitation. Together they met the Chief Managing Director (CMD) of Little Italy in Mumbai who showed them around the branches in that city and in Pune. He also introduced them to Aparna and her husband Navin, who were already interested in the franchise.

Aparna had earlier worked with IBM and TechMahindra in Bangalore. Realising that they were comfortable as a team, the three joined forces. In late January 2009 their business venture became operational in a two storied leased property in a quiet by lane of Koramangala. Serving the trademark vegetarian Italian and Mexican cuisines that Little Italy is known for, it became the 25th branch in the country.

With the capital being raised between the three and pooled into the venture, the financial stakes were high. They could not afford a failure. So in between the euphoria of finally flying on one’s own, there was also the apprehension of waiting to break even. “The restaurant started making profits four to five months down the line,” so it wasn’t too bad,” says Aniruddha.

“But we had to spend quite a bit on the bar license,” he adds. He admits that the challenge of tackling these kinds of issues is difficult for people who come from middle class families. “As a salaried person, you are shielded from the realities of the business sector. Besides, you are brought up with certain values like being ethical in your dealings. This was like going against our principles. However, you cannot let such things be a deterrent to your goal. You have to be mentally strong.”

You also must be passionate about your work and have complete family support. “On weekends, when most people take time off, we have to be around to deal with anything that crops up. And then there’s the minor issue of income,” points out Aniruddha, wryly. Since most of the profits are ploughed back into the business, the take home packet is rather small when compared to the fat salaries they once earned. “Earlier, we used to spend on anything we wanted. Now, we think before we spend,” he says.

For smoother operations, the three partners have divided tasks. Aniruddha interacts with guests and looks after customer service and communication aspects; Aparna handles HR and kitchen operations and Vijay manages the inventory and stores. But all three are hands on, with each one individually capable of handling day to day issues at the restaurant.

Close to a year since its inception, the restaurant has grown rather popular, largely through word of mouth publicity. Go on any day and you see a wide spectrum of people – families from the many residential complexes around, professionals from the IT industry seeking a fine dining option for a working lunch and youngsters from the nearby colleges and shopping mall. The weekday buffet, recently introduced, is a major draw for those looking for value for money.

The buffet, a difficult concept in Italian cuisine, is only followed in two Little Italy branches – in Hyderabad and here. “The advantage of being a franchisee of this brand is that we have creative freedom when it comes to the menu and décor, as well as the ability to price according to competition,” says Aniruddha. “At the same time, there is support from the main office such as a central staff pool from which we can draw if we have a problem. If you are a newcomer to this industry, it is better to go in for the franchise model since this kind of operational support is critical,” she adds.

For budding entrepreneurs who are worried about the capital investment, Aniruddha has this advice: “Banks give loans at attractive interest rates. But draw up a sound and convincing business plan and you could approach even venture capitalists for funding.”

So are these entrepreneurs thinking of an encore? “When we were researching for this venture, we had some other ideas like floriculture and organic farming. While the next logical step would be to do something in the food business, Vijay and I always talk of writing a book together,” says Aniruddha. “Who knows, someday we might give Chetan Bhagat a run for his money!” he ripostes with a grin.

Like Aniruddha, Aparna & Vijay, even you could choose the right franchise opportunity for yourself and venture out to taking up tried, tested and proven franchise business concepts.

Please speak to India's Finest Franchise Consultants on 09844443200 to help you understand a business that fits your profile.Visit www.sparkleminds.com

How to Become A Franchise Consultant

If you have been seing the growth of franchising In India and understand that franchising could be a profession that you could embark upon then one of the options to garner a pie in the ever growing franchise industry could be to become a franchise consultant.Once you make the decision to become a franchise consultant, what would be the most efficient process to follow in order to make this happen?

Step 1: Research franchise consulting firms
In order to determine which franchise consulting organization to affiliate with, it is recommended that you investigate several firms. Determine the reputation of each company including how long it has been in operation and also the number and types of franchises it represents.

The company should market for at least several hundred franchises representing a wide variety of services. Additionally, the organization should provide a comprehensive training program as well as continuous support to their franchise consultants.

It is advisable to interview current franchise consultants if possible. Find out their thoughts on the organization.

Step 2: Get your financing in order
It is important to become cognizant of what your cost will be to join the consulting companies that you are investigating.

There is typically a one-time fee to join a consulting company as a franchise consultant. This includes training and ongoing support. The cost usually ranges somewhere between Rs100,000 and Rs 500,000

Also factor in funds that you will need to set up your office. Most franchise consultants operate from their homes, thereby minimizing overhead costs.There are options of using your existing offices also to be a full time franchise consultant and have a exclusive/shared office.

If you don't have the capital readily available, you may need to apply for a loan or for a partial loan. Sometimes franchise organizations can point you in the right direction in obtaining financing.Typically, loans are provided on your individual IT returns and the collaterals you are willing to offer to the bank.

Step 3: Participate in training provided by the consulting organization
Part of your investigation of franchise consulting firms included finding out the type of training and support provided. Once you sign on, you will be attending training sessions that should equip you with all the material and skills that you will need to successfully link franchisees with franchise businesses. Take advantage of all of the training offered.

Step 4: Set up your office
Franchise consultants usually operate out of a home office. Much of the work is done via computer, telephone, and fax machine. For optimum working conditions, an up-to-date computer system is recommended. Also, it is usually advisable to set up a separate telephone line for your business. You will learn all of this in training.

Step 5: Work schedule
Finally, based on your lifestyle and income needs, decide if you will work part-time or full time and then prepare your schedule accordingly. Keep in mind that most of your time will be spent contacting leads, doing phone interviews with franchise candidates, and conducting research to determine the best matches for the franchisees as well as the franchisors.

Amit Nahar is a well known franchise professional who consults with franchise systems and franchise seekers. As an author, public speaker & franchise consultant Amit has educated thousands of people about their options in the franchise industry.He typically specialises in franchise development and consulting for companies seeking to strategize their franchising and building franchise organization. Amit is also the CEO of Sparkleminds. If you have questions or want to become a franchise consultant visit sparkleminds.com.

Franchise Expo @ Ahmedabad on 8/9 Jan 2010

Franchise Business seekers in Ahmedabad & the Gujarat region can look forward to the franchise expo at ahmedabad at the grand bhagwati on the 8th & 9th Jan 2010.

Companies seeking franchisees/business partners in ahmedabad and looking to expand their business in the gujarat region can seek this opportunity to interact with more than 5000 serious franchise buyers expected to visit the expo.

Entrepreneurs could look forward to companies in the food, education, retail, services, home based opportunities, low investment option, master franchisees, international franchisees and all kinds of businesses that would be displayed at the event during the 2 days.

You could also catch up with the franchise experts /franchise consultants (www.sparkleminds.com) who would help you choose a business of your choice or help you expand your business through franchising.

Visit us at the franchise expo amdavad for complete franchise solutions.