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.

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.

Multiple Brands Open Joint Franchise Stores

Re-feel ClubLaptop Opens A Joint Franchise Store in Jodhpur

It is the biggest franchise store for the company till date at 700 square feet. It is a spectacular store has received immense response from the consumers so far.

Within its inception of only two months ClubLaptop caught on the imagination of the customers and franchisees alike and now boasts of opening 16 franchise stores in 13 cities of India. However, the most spectacular Re-feel-ClubLaptop store so far has been the Jodhpur franchise store. Started on March 7, 2010, the franchise in jodhpur is the biggest one till date with an area of 700 square feet.

Says Puneet Daga, the Jodhpur franchisee, who happens to be the owner of this store, “It was only because of encouragement and support from ClubLaptop that I could open this franchise store. They provided me with all sorts of possible assistance that I required.”

ClubLaptop has embarked on an industry that has been majorly untapped. ClubLaptop is a first of its kind retail service chain that provides quality repair services at affordable prices. Moreover, it aims to be a one-stop solution for all kinds of queries on laptop care and accessories.

Speaking about the store, Mr Amit Barmecha, Director Franchise Development, Re-feel and ClubLaptop said, “At Re-feel we use cutting edge technology and state of art equipment to ensure print quality and print quantity, both similar to the original cartridges. We target to open 250 Re-feel cartridge store and 300 ClubLaptop stores by the end of 2011 and contribute by setting quality benchmark in an otherwise unorganized market.”

Echoing the enthusiasm, Mr. Daga said, “With increasing awareness among the Indian users about using environmental friendly and cost effective alternatives, we are positive about the store receiving a great response for both cartridge refilling and laptop servicing.”

Mr. Daga said, “I have received a very good initial response and my entire team has been well trained and supported by Re-feel.”

Clublaptop, the laptop service franchise specialist, offers a one stop solution for laptop repair and laptop accessories. Pioneered by young entrepreneurs, ClubLaptop is a unique initiative of establishing a chain of branded laptop repair stores in India. Customers will get fast, friendly, reliable and affordable laptop repair and care services from the store. ClubLaptop stands out to be a better alternative to the authorized service centers for affordable pricing, fast turn around time and world class service.

The Re-feel & ClubLaptop project is a pedestal to the cost cutting mantra of the corporate power houses. More than 10 billion cartridges are projected to end up in landfills. Considering, that one cartridge dumped, takes 400-1000 years to biodegrade, this a great environmental hazard. And unfortunately with every passing day, the problem is getting worse.

The number of cartridges in landfill increases by 12 per cent each year. To the contrary, Re-feel, in the course of over two years, has saved over 4 Lac cartridges from being dumped into landfills and would save many more in the future. Discarding laptops due to problems is a common practice, thereby creating a huge amount of e-waste. Re-feel group is dedicated in providing low cost environment friendly solutions to the customers.

With service, trust, knowledge & technology forming the core brand differentiators, Re-feel is a highly committed organization that offers superior solutions to its ever growing customer base through Re-feel & ClubLaptop Stores through out India.

Re-feel Cartridge Engineering has been given the prestigious award for "The Emerging Company of The Year", 2009, at the Annual Franchise & Star Retailer Awards, 2009.

Re-feel (re-feel.in) has also been ranked amongst Top 30 emerging franchisors and Top 100 business opportunities in India, 2009 by the Franchising World, Asia’s highest selling franchise magazine.

Source: NewswireToday - /newswire/ - Kolkata, West Bengal, India, 03/26/2010 -

Grow Your Business: Get The Right Franchise Consultants

Overview:

With more than 1500 organized franchisers in India and an estimated 3000 getting organized in the next couple of years, it becomes very important for every business to analyse, what's the best way forward. Will franchising serve my organizations growth objectives? If yes, how do I 'Franchise My Business' or 'How To Franchise.' How can I quickly build a robust business system that works efficiently with a variety of franchisees, all of which work independently and yet at the same time together? What are the challenges I need to address? Franchising can give you great results. Every business is unique and has to be dealt differently. You can mould your business strategically around franchising and set the foundation for scalability and growth. The first step is to look for a franchise consultant expert who will run this marathon along with you.

Introduction:

Expanding a business always has a lot of planning, resource allocation, risk analysis, adaptability and timely growth that one has to engage with.

The first question that you ask yourself is what course of expansion must I follow?

Should I have more of my own company units in different locations?
Do I have the resources to do it?

If yes, how much time will it take me to do the desired number of units?

If no, how would I fund the expansion?

Will I knock on the venture capitalists door or will I go to banks and other financial institutions?

Are market conditions favourable, how fast is competition catching up, will tomorrows markets be as potential as today’s or will they improve?

By doing so will I be able to serve my customers efficiently through my employees, what are the kind of team members I must have?

What is my exit strategy? What is the reason for which I am into this business and how will I optimise my time and investments?

Most entrepreneurs have the above doubts when they are thinking of expanding their business, which is when they also explore franchising.

Is franchising right for your business?

Franchise as a business development strategy has been around for some centuries now. Different businesses have used franchise development for their growth and over the years grown into successful franchise brands. I will not speak of the numerous franchise success stories that repeat themselves as a standard template in such business blogs or franchise articles.

“Most businesses that have a replicable prototype which works without a specific individual, and is able to generate profit for the franchisee and the franchisor, and at the end of the distribution chain offers value to the final consumer at price and service levels, satisfactory to a clients consumption, generally take the franchise route.”

It is very essential for business owners to realise the potential of what franchising could do to their businesses. They must make sure that they are ready to expand, because they cannot reverse this decision and more often than not, there is only one chance that they get to, ‘get the act’ right. Once they decide to expand the earlier they reach out to professional help, the better it is. There are a few experienced franchise consultants in India, who could help you grow stage by stage and ensure that you do not commit the typical mistakes, most businesses commit whilst they expand. You could very quickly learn from the experts and create a franchise expansion strategy that is suited to your organization not your industry.

Choosing the right franchise consultants in India:

Also be very careful in selecting your franchise consulting company. You could come across a few consulting companies, who have the reputation of making the Franchisers/ Business owners invest so heavily at the onset on Initial Documentation, Franchise Marketing, Franchise Advertising, Franchise Agreements, Franchise Exhibitions and other related activities that the client does not have anything left for the actual business development or support to the franchisees or capital to take their business from this stage to the next. On the other hand, it’s never prudent to release an advertisement or participate in a franchise exhibition and then plan your franchise responses based on the calls you get. It’s the surest way to fail. I have seen several clients who ‘cut and paste’ their competitors franchise plans or accumulate various offerings and speak to several franchisors just to figure out what could suit their businesses. They then go back and announce a ‘mixed concoction’ of what they call as a ‘franchise offering’ trying hard to please the initial set of entrepreneurs whom they reach out using their own ingenious ways. I remember seeing, one such company/franchisor, distributing leaflets of their offerings outside a franchise exhibition venue and trying to talk to all visitors about the same. Will they ever succeed in getting the right franchisee? Is that the right way of projecting your business?

Well all of us know the answer to this while most people then go about asking as to why does a franchise fail.

I often answer, “Franchising doesn’t fail, its how you franchise your business that has failed.”

You’d rather go with a franchise consultant who works closely with your business like a coach and is interested in the long term success of your franchise, works closely with your organization on the entire systems, understands your brand and its ethos and engages the prospects interested in your business, chooses them carefully for you, does the entire expansion fieldwork on your behalf while you are constantly strengthening your business and making it ready for franchise growth. Franchise Training, Creation Of Franchise Manuals, Standard Operating Procedures (S.O.P’s) are also very essential components of franchising and you must check if your consultant is competent to help you with these at the speed and costs that are feasible for your business. It is very important for you to assess the team that would work on your project and the actual people and their backgrounds along with previous track record of the work that they have already done. Doing a reference check with clients who have already experienced the services could help you understand if the franchise consultant will be able to deliver what you seek. You must assess the size of your organization, the growth that you want to achieve and then choose a long-term franchise guide, whom you could speak to at any point in time and get valuable guidance along the way for years to come.

While larger organizations might have people changing at the top and at different levels, its important that the consulting team is able to put in systems and processes that new people can instantly adapt with a appropriate franchise training programme and a standard set of internal documentation in place. The focus on the right training at all levels of franchising is very important. I remember putting down specific internal employee do’s and don’ts for a client, who was very concerned of change in people at different levels and that affecting the business franchising. That was something that we put in place from the word go.

Hence, while most businesses can be franchised and with franchising gaining momentum in the Indian subcontinent, it is very important that the business community and the franchise entrepreneurs understand the availability of such experienced resources to their disposal, which if used properly could ensure franchise success for their businesses. We must learn to learn quickly from others mistakes and go ahead with franchising your businesses with utmost care, proper research, on ground market realities and the franchisees expectations.

At the end of the day it’s about creating a happy customer, a happy franchisee, and a franchise business that delivers what it promises.

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.