An opportunity for budding entrepreneurs
Would you prefer to work for yourself or someone else?
Employment figures continue to dwindle and you may well be correct in thinking that per chance the best way to employment is through self-employment.
For all those looking at securing work, the question therefore lies: would you prefer to work for yourself or someone else?
Darling announced an increase in Entrepreneurs’ Relief in the last Budget – meaning the Government is currently encouraging people to invest in, and grow, their own business – the ultimate opportunity for any entrepreneur to realise the capital they have created.
Investment allowance has also doubled. To SMEs this means they can write off up to £100,000 of capital expenditure annually on plant and machinery against profit for tax purposes.
In spite of the recent economic turmoil, the computer industry continues to grow exponentially, proving itself to be an enviable sector to be in.
As companies seek to streamline their operations and outsource some functions, the IT department is an obvious place to start for SMEs, which rely on computers and technology to work efficiently. In an age where the internet and email are the communication lifelines of most companies, businesses simply cannot afford to be without them.
Most SMEs and home offices do not have the skill, time or desire to manage their own computer services, repairs or upgrades and they generally do not have the expertise to implement new technologies such as voice over IP, wireless networking or remote computer access, to name just a few.
The 2009 NatWest/BFA survey – the leading study of franchising in the UK - cited ‘business services’ as the franchise sector expected to show the highest growth in the coming years as SMEs look to outsource non-core areas of their business. This is an opportunity for budding entrepreneurs to capitalise on the growing demand for outsourced IT services.
Setting up your own franchise may be a daunting prospect, but there are many sources of wisdom which can tell you the Do’s and Don’ts.
Here, a few connoisseurs offer their pearls of wisdom – these include a Director of Franchise Development at NatWest Bank, the founder of First For Franchising, and the MD of a highly successful IT franchise in the US.
Mark Scott, Director of Franchise Development at NatWest, says:
“NatWest has been the leading provider of finance to franchisors and franchisees since the 1980s; we have been successful by lending to franchisees of proven franchise concepts.
“Fundamentally, you can not franchise ‘blue sky’, there has to be an underlying business model which has been proven to be profitable in the past. The term of the franchise is also an important factor to ensure any finance taken can be serviced over this period. Turnover is vanity, but profit is sanity.
“Failure rates of franchisees are normally below 5% per annum, but with independent businesses the failure rate rises to 20%.”
Les Dyson, of First For Franchising, advises:
“A common misconception about franchising is people often assume it is a ‘get rich quick’ solution to achieving wealth.
“Although many franchisees have found this approach to self-employment to be rewarding, starting a franchise is hard work.
“Successful franchise models must have strong intellectual property and a reason for customers to buy, plus a strong market to keep the brand in the customers’ attention. A relationship where both the franchisor and franchisee are focused upon common goals and strive to work together to achieve them is the best recipe for success.”
Roger Richardson, CEO of Nexus, which owns a successful franchise, Nerd Force, explains:
“Experience in the US market has taught us that demand for outsourced IT managed services is high and growing.
“When the economic climate is causing businesses to cut costs, one of the first areas they look at is outsourcing their IT services.
“Rather than this being considered a sub-standard service, most client feedback has since been that in fact having a 24/7 IT specialist on call remedies problems far quicker than any inhouse resources they have had in the past.
“Nerd Force franchising is proven and established, it operates within a growing business sector, and therefore the opportunity in The UK is simply a transition of a successful franchise to another area. Also within its sector, with the considerable support of Nexus, Nerd Force is uniquely positioned to offer ongoing data support and management services thereby securing ongoing passive revenue for franchisees as opposed to being simply dependent upon ‘’one off’ support and technical assistance.”
Written by Gary Howes http://www.smeweb.com
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