Systems or franchises
I recently attended a seminar on a business and met a few people who worked from home. There were just a few and they seem to have started fairly recently. They had bought the ‘system’ or the licence for the product. Having been an entrepreneur who reluctantly went back to the work force, I have studied business franchises over the last 10 years. I attend every seminar, free and sometimes paid ones to know about them and always find some reason not to buy into it. A job for several reasons is better, but has severe disadvantages. The biggest one is if you are stuck in one where you cannot capitalise on your experience or skill. Luckily having been in and out of several jobs and businesses I have had the time and inclination to self-study several business systems.
Business is more like ‘beggar my neighbour’, or simply how you can get money out of the other bloke. To be fair, it is the function of marketing and not the businesses model by itself to rip the other guy. However, it has reduced to it and the ethical aspects of business are governed by well crafted public policies. Yet we have consumer courts and all is not well for everyone. There is still a chance it is your entire fault because you did not check a box. Today in the world of choices, you are an alien if you don’t understand choice. ‘Eat in or take away’,’ mild, medium or hot’, the banks give you a choice that is buried in some small print or a check box, which you may have overlooked and realised when you find something amiss in your account.
Be wary of the sales pitch.
Some more ‘business’ models
Let me take the case of calling cards. They are never fully used; the unused part is to the credit of the seller of the card and the company that originated the card. One can never figure out the connection charges. If there are connection charges, the chances are that you may be cut off to re connect. They have cards called dirty cards that are cheap and profit on consumer ignorance. The cards anyway are small enough to carry even smaller print.
Telecom providers are great for locking you into accounts that work on the assumption that you have understood the plan. You sign your knowledge or lack of it, anyway. You can get itemised bill for calls, but its data that there is no way of ascertaining data consumed in bytes. True bytes can be recorded, but humanity is more used to time as factor of use. It is a jungle out there and knowing what is best for you could take a while.
The consumer even if conned is still king and a quick refund or credit is always available to those who insist. Why don’t they publicise the credit aspects in the contract? All things being equal, contracts are meant to work for both sides. They always seem to have the leverage, of which we need to be aware.
Google Adsense alas works in the same way, at least that is what I think as I write this blog. I have had an account for some time and was horrified to find hidden check or tick boxes that allow revenue accrual. It is like asking do you want to earn money from the ads displayed on your website. Hello, is this a question to ask! If you are dumbstruck by this I suggest visit you account straight away and read the Ad sense Blog, if applicable. There may be a possibility that you are doing things free in this world … in that case ignore my comments.
Franchising
I started with writing about franchises. Franchises are great and the best possible example is that of Mac Donalds. It is a money earner and a very well known brand. I wonder how the owners could be making money in the current Global Financial Crisis (GFC). The fact is that their products are affordable and perhaps even nutritious. They are affordable and with proper silting of the real estate, able to attract large volumes of foot traffic. They have survived the onslaught of criticism and public outcry over McJobs, non biodegradable foods and the exploitation of labour at minimum wage. They are expensive to buy and they have long waiting periods to get into the game. I have not favoured the idea of a franchise, but what I see in them is a systematic approach to work. Inter operable systems that can make the team work with supervision.
With an exception of a few like Mac Donalds, where the investment is relatively high, most others try hard to get a franchisee. There is however a different method of attracting franchisee. Much of it will appear as choices made by the franchisee. The master franchisor can call the shots and the franchisee is the one who is at the receiving end. Depending on the financial position one can end up buying a job or become an investor.
Every business is franchise-able. Not every franchised business is entirely successful. The franchise model is as good as its systems, its transparency and brand equity in the market. One of the difficulties is that many are not able place their successful ones before potential franchisees. The other aspect is that even if you did meet existing franchisees, they are likely to paint a good picture to convince you to get on board. By joining up, the existing franchisees do not feel left out and get validation for their choice.
Due diligence is left to the potential franchisee. The banks are ready, if you meet the criteria and will lend to those franchises that have established some reputation in the market. More about this and franchising later blogs.
About business from home, they also could run like franchises but the model varies with each business. To begin with, their ads inundate the cyber world. So one has no idea what it’s all about till almost the end. If you sign in for an email, then the most used key on your key board will be the delete button. You can unsubscribe. Most systems used on the internet are reliable and clean so you will not know if you are dealing with some unreliable entity. They are after your business and it is fair to ask them for credentials. I always look for an exit strategy e.g.: can the business be sold back to the seller, or what are your options if it is not for you. The next is evidence of earnings followed by a projected cash flow, competition in the market, your market share, your territory, support, draft contracts for viewing and so on and so forth, till you are ready to make the leap of faith.
Everybody is vulnerable. The con artist is an ace at this, it is a job. Persistence pays. This happens to us all the time as we get influenced by advertisements.
Now you really don’t have to buy a system to run a business from home. In the first place you need to develop the skill or service that you want to get out to the market. This is just the beginning as mere skills get you nowhere. You have to advertise your wares or services to your potential clients. I’d say most of these businesses do rely on a lot of networking, advertising and marketing. So you really won’t be working from home, but for much time out of it.
If you have an idea and want to make business out of it, then getting a business coach or mentor may be a better idea. You need a good one, and are able to assess who could be a good mentor. The foremost requirement will be the comfort level. Have a clear-cut job description for the mentor, drawn from your expectations. The mentor will only be your motivator and guide to seek further knowledge till your business is set up and on the move. Business coaching is an industry by itself and due diligence to get the right one will pay. May I add, that just because someone has an Olympic medal, they may not be the best for your needs. A tip here: if you are unwell you go to a doctor, not a celebrity. Assess your needs and look for a mentor to match them.
If you have any specific questions on franchises don’t hesitate to ask. No charge. You probably can benefit from my due diligence methods. I am very risk averse, but can tell which one is the real stuff!
