There is no disputing that a lack of capital is one of the most common reasons why entrepreneurs struggle to expand their operations. They find that their goals outstrip their available funds, and while obtaining a loan from the bank is viable, it only incurs more debt and ramps up the pressure to succeed.
Franchising, on the other hand, offers an alternative that allows entrepreneurs to expand their business without the need for extensive capital. The franchisee provides the money, allowing the company to grow without incurring more debt.
As the Business Development Bank of Canada puts it, “franchising your own business can be a successful growth strategy, especially if you have a profitable operation that can be easily replicated by others”. In layman terms, it’s simple: if you have an operation that can be replicated, it’s viable.
Your first reaction to successful franchises is to think of the global fast-food chains, like McDonald’s, Burger King, and KFC.
But any business, large or small, can benefit from franchising – even your own digital marketing company.
How do you go about franchising your digital marketing business? This guide explains the key points you should follow to maximize the potential of your franchise and help expand your operations.
Establish Your Brand & Vision
Second Cup is Canada’s largest specialty coffee retailer. It’s a well-established coffee chain with thousands of franchise stores open across the country. Now, while your company might not yet be a household name, what made Second Cup so successful in franchising, is that it established an accessible brand and vision for its franchisees.
Its vision is “to be the Canadian specialty coffee brand of choice across Canada, committed to superior quality, innovation and profitable growth,” while its brand is to “ignite customers’ passion for the ultimate coffee experience”.
It’s simple to understand, but more importantly, it encapsulates what is expected when franchisees involved themselves with the company. Clarity from the very top can do wonders for investors, as they know what is expected from the start. Make sure your brand and vision are succinct and clear so investors understand what is expected of them.
Target the Right Franchisee
Not everyone is cut out for franchising, so you have to target the right professional that will be interested in your business. But you shouldn’t only consider their personal attributes and experience (as crucial as that is). You have to go to a deeper level: something as simple as deciding if the franchisee wants to run a brick-and-mortar store or if they want to work at home.
Cruise Planners is one of the biggest travel agencies in the world, ranking in the Entrepreneur Franchise 500 for more than a decade. But what makes it such a valuable and worthwhile investment, is that the travel agents are home-based.
Franchisees have little to no overhead costs, can work the hours they want, and have the opportunity to establish themselves in the long-term.
This example highlights the importance of narrowing down your target audience, so you’ll be able to expand your operations without wasting time franchising to the wrong people.
Understand the Value of Your Business
You have to consider the cost of franchising your company. And while you would like to charge an excess amount, once again, you have to go back to your target audience. What can they afford?
There might not be any value in the market for your service, or the franchisees might not be able to afford it. You have to find the right balance for your business, but that doesn’t mean you won’t expand your reach by selling it low. There are a lot of excellent companies that sell their franchises for low fees but still establish themselves in the market.
Healthy Cravings Canada Snack Vending is a prime example. It’s an established company for over 30 years, a recognized brand name and has carved a powerful niche in the market (promoting healthy eating). More so, you can get it for only $10,000.
Your company can do the same. Low pricing doesn’t mean it you can’t use it to your advantage. The lower the price, the more opportunities for investors, the greater the reach of your business.
Target Untapped Markets
Perhaps the most significant impact that comes with franchising, according to Entrepreneur, is the expansion and penetration into secondary markets. Much like McDonald’s and other giants, who push their products and services into new areas, digital marketing franchising works on the same level. You can expand your operations into new territories across your city or country (or even globally).
But while that is a staple of most franchising, you should be tapping into untouched markets that you never considered, or craving a marketplace out for your own business. This is the most beneficial route to take, as opposed to franchising anywhere.
You could find your business servicing untapped clients or industries that don’t get the recognition they deserve. Consider where you would like your company to expand into, so you can make the most out of the opportunity.
Remember Your Training & Support
Selling fast food is one thing; selling digital marketing services is another. People flock to buy burgers and coffee, but for digital marketing, they have to be convinced that they need those services. It’s a different ballpark altogether, and extensive training is required to ensure that the franchisee is capable of delivering the service.
GrowME Marketing, for example, provides an extensive three-week training course for its digital marketing franchise, where franchisees will receive marketing, sales, and product training, so they are fully trained to take on the franchise. However, most significantly, it is what happens afterward: they get on-going support.
In the ever-changing world of digital marketing, changes to algorithms, services or policies can play a significant impact on services. It highlights the need that when it comes to training, on-going support is just as important.
You need to ensure that you have an established support system in place, so your franchisees can maximize the potential of your brand when things change.