Partnership, franchising or licensing? What is the right way to expand your business. What are the options and what is the difference between ‘licensing’ and ‘franchising?’ What model will help me expand my business, offer the lowest risk and the best returns?
Building on the sweat of your own brow
Most business owners have a narrow understanding of what options are available to them to help expand their businesses. That is why they often go it alone when they are expanding their business, only to find it may not be the best option. These are the reasons why.
If you open another location, you will need to hire employees and managers. You will have direct control, but increased direct responsibilities. It will also require use of your own capital and might spread your own time dangerously thin. Maybe this is not a big problem if you open just one location but what if you want to expand to three, five or even ten sites?
The more locations, the more employees, the more paperwork, the more capital cost and the more chance there is of damaging your core business and core brand that you have worked so hard to build.
Even if these problems are largely solved, it’s unlikely that managers will be found who will care about the business as much as you do. The problem gets worse with every passing decade. It gets harder and harder to find responsible employees and almost impossible to find good managers. Maybe profit sharing or work incentives will provide the needed inspiration and desire but you will still have that daily, direct responsibility and capital outlay to spread out over a number of locations.
Other Business expansion opportunities
With such important decisions it’s important you have access to the resources and knowledge that makes you aware of all of the options (not just the most obvious) to help you expand your business. As they say ‘knowledge is power’ and the greater awareness you have of the options you have available to you, the more likely you are to make an informed and the right decision. This is where DST retail can be of service. We can provide you with the insights, resource and experience to identify business expansion opportunities and work through the pros and con’s of each option. The following is a brief insight into three such options you may not have yet considered, however these options are not the only ones available to you.
Business partnerships. How to franchise your business. Licensing (links)