How to succeed as a franchisee

Turning a start-up franchise business into a success is tough, but possible. Learn from an expert the keys to striking gold.


By Jeremy Lang

If you’re the kind of guy who likes to go to sleep early, don’t buy a restaurant franchise. I am stating the obvious? Perhaps, but you’ll be surprised how many first-time franchisees make the mistake of buying a franchise that simply does not fit their lifestyles.

In the world of start-up franchising, it can easily be a fatal mistake to make, because there is so little room for error. Very few people who buy their first franchise have the resources for a second chance once they’ve found out that the franchise they had set their heart on is actually not the right fit.

Lifestyle preference is only one of three pillars which prospective franchisees must consider to make sure that the franchise they choose is the right fit for them. The other two are skills and personality.

The skills set of the entrepreneur is the most important. First, there is the technical know-how related to the specific industry, such as a beauty salon or a service station. You’ve got to be able to choose a franchise for which you either have a natural skills set, or one in which you’ve had previous experience in.

Irrespective of the industry, a franchisee will always have to be a jack-of-all-trades to a certain extent - the HR person, the salesperson, the office-manager person and the tea lady, so you’ve really got to have a good general hybrid of skills such as:

• Good management ability, which is the core of what the franchisee is signing up for
• Sales skills, because your whole enterprise revolves around your ability to secure business
• An eye for detail and practical problem solving skills. Because you will be fulfilling multiple tasks in your business, you have to know as much about all the different systems as possible
• Networking and relationship-building skills for forging ties with your clients, staff, suppliers and franchisor, and
• Practical problem-solving skills. You are going to be faced with many challenges every day. You will have to be decisive, and think quickly to find solutions to problems.

This list is true for any start-up business, franchised or not, but there is one set of skills particular to franchising: the ability to follow the rules of the concept. Franchising is a recipe that requires strict adherence by franchisees, otherwise the service or product will start differing from branch to branch, and the collective power of the brand will suffer. If you are not somebody who likes to operate your business under a strict set of rules that you have not created, then franchising may not be for you.

Being a successful franchisee not only has to do with skills, but also with personality. Prospective franchisees need to be honest with themselves about their personality. A generally introverted person should shy from retail or service-heavy businesses such as restaurants. Similarly, a sociable, outgoing personality will become frustrated in a desk-bound business where there is little interaction with clients.

Although nothing can replace common-sense self-knowledge, I would suggest doing a personality test such as the Myers Briggs test, more to help you think through what you already know about yourself rather than teach you about aspects of your personality that you didn’t know.

The unknown usually lies on the side of the franchise. A first-time franchisee who knows himself well could still be in for a nasty surprise when it turns out that the franchise requires an approach, attitude or trait that he simply isn’t comfortable with.

There are two methods of avoiding this mistake. First, speak to the franchisor that you have your eye on. A reputable, established franchise group will have a very clear idea of what kind of personality and skills set are required to make a success of their concept. Some will have formal descriptions and even tests as part of their assessment process.

Most importantly, speak to the franchisees in the group that you want to join. If possible, work-shadow franchisees who are hands-on involved in the management of their businesses for a week or two. The exercise should leave you under few illusions about whether you are up to the task, and whether the work and lifestyle suit you.

Jeremy is regional general manager of Business Partners Limited.

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Below are links to some franchise opportunities on the Frontier platform

International financial services company is seeking a master licensees in Africa

Investors sought for expanding popular fast food franchise in South Africa

10 secrets to winning tenders

By Kristina Mills

If you think about it, sealing that deal is all about salesmanship. It is all about addressing the needs that your prospect wants to be fulfilled as well as proving you fulfill those needs in the most results-oriented ways.

Below are the top 10 rules to follow when preparing your tender document.

To find out their needs, always call them

When you phone your prospect, don't just ask for a copy of the tender document or a list of specifications. You need to find out why they are calling for tenders, what is important to them and why they want to undertake the project. Have a conversation with them and get to know them a little better, to discover what they are all about. You would be surprised how much information you can find out. This would be priceless information when going through the process of creating the tender.

Follow the salesmanship formula that is already proven

Instead of just talking about being able to carry out the work, start by identifying their problem, or the core reason that they included that criterion. Then you can talk briefly about the downside of the problem. When you have done that, you can talk about the solution - how you are really going to get their needs fulfilled. You need to include specifics about the mechanics behind the processes that you use. Prove your claims by including case studies, results, guarantees and testimonials.

Send them a pre-proposal letter

When you have made the initial telephone call finding out the facts, always send a quick note thanking them for their time. The letter should also thank them for the information provided, and should include something that makes them feel good about what they want to have achieved. Finish off the letter by thanking them again and letting them know that you are looking forward to putting together a tender document for them, or some quotes and ideas. An important factor in your success is to establish a relationship with your prospective clients, a relationship that begins from when you first call them.

Do a lot of research

Find out everything you can about the company - even if you are only submitting a 'quote' for an easy job. Do an online search; get them to send you a brochure; know what their competitors are doing; find out what their customer service philosophy is, their mission statement, and what their culture is about - regardless of the job you need to do. By doing this, you get a feel for what is important to the company, as well as some priceless ammunition that you can include when preparing your tender documents.

Follow the guidelines so precisely

When you are tendering for Government contracts, there are always specific guidelines to follow. Structure your documentation around these guidelines, which makes it easy for the prospect to assess your tender. If there are any other sections that you'd like to include, you can place them towards the end of your tender document.

Use graphs and tables

Show figures in a graph, rather than in text format. Include a comparison of your results with other companies' results.

Make a list of your most impressive customers

By listing your customers, it gives prospects an understanding of how you can cope with a business of their size, reputation and type.

List the best results you have achieved

List any great 'claims to fame', if you have any. Doing this proves that your company has 'runs on the board' and suggests to them that they can also get results from you. Include a brief description of the project, industry and the results which were achieved.

Include a guarantee

In the tendering process, people can be very sceptical. They are fearful of being ripped off and of not getting the results that they expect. If you include a powerful money-back guarantee that reverses the risk, it takes away one of their major buying fears. In effect, that lowers their barriers against doing any business with your company.

Include some testimonials

If you say something, they may not believe you, but if someone else says it, then it must be the truth. This is definitely true when you are talking about selling your services to them. When you tell someone how good you are all the time, it's not until they can hear it from the 'horse's mouth' that they will believe you. For this reason, you need to include in your documentation as many testimonials as you possibly can.

Bonus points

• Talk in benefits - Because people are basically selfish they don't really care how big you are, or how professional you are, or even how long you have been in business. They just want to know what you are going to do for them, how you are going to deliver those results and what it will mean for them. You need to tell them. Talk benefits, Instead of talking features. Tell them what is in it for them.
• Use the word YOU more frequently - 'You' is the most powerful word in the English language, because people are so self-absorbed. Use the word 'you', instead of 'we' and 'us' to keep your prospect interested.
• Present it professionally - You should include action plans so your clients know what to expect and when to expect it. It is a bit difficult to know how a project is going to work, what needs to happen, and when it should happen  - particularly with large projects. Include a comprehensive action plan which clearly sets out each step. This gives your prospective client a much clearer picture of how you are going to deliver these results. 
• Do not stop when you have submitted the tender - That is only part of your process. You need to develop a structured follow-up system, which includes some nurturing follow-up letters or a series of telephone calls, which are designed to 'check-up' and provide them with further information, if it is required. This shows that you're committed to helping to get results for them.
• Never give in - Because you didn't win a tender, it doesn't mean that the company will not want to do business with you sometime in the future. Make sure you keep in touch with them, with telephone calls, newsletters, interesting news articles as well as 'how are things' letters. These show that you care about them.

Kristina Mills is an author and business consultant

5 steps to planning a business trip to China

By Fredrik Grönkvist

So, you’ve found a couple of suppliers online and want to find out if they are everything they claim to be. That’s a good first step.

But, boarding the next flight to China, with a list of three random suppliers you found online, is most often a complete waste of both time and money.

In this article, I explain how you need to prepare yourself before your business trip to China, and what to should look for while you’re there.

#1: Is the supplier able to show compliance with product regulations in your country?

In most industries, less than 5% of the suppliers are able to show previous compliance with American, European and Australian product regulations and standards. Assuming you don’t verify their compliance prior to your visit, you’ll waste a lot of time visiting suppliers that are neither willing nor technically capable of complying with the relevant standards.

Besides, compliant suppliers tend to be above average in other aspects. Apart from the obvious legal requirements, I also consider compliance a strong indication of the supplier’s technical expertise.

#2: Schedule meetings with as many suppliers as possible

All manufacturers are not equal. Expect at least 50% of them to not be what you expect. It’s bad out there. I’ve been taken to factories that have not been operational for months. Factories that would barely pass for junkyards.

I can even recall one really weird situation a couple of years ago, in Xuzhou, when I was taken to the same factory twice in the same day. First in the morning, when a representative of a Trading Company took me there. The second time in the afternoon, when the actual owner of the factory picked me up.

It felt quite awkward to tell the boss that I had already visited their factory earlier that day. Not to mention that I wasted my entire afternoon. Not that there’s much else to do in Xuzhou…

The lesson here is that you’ll return home empty handed if you visit one or two random suppliers. It’s not enough. Schedule visits with at least five or six suppliers, and list a handful of backup suppliers – in case the first round fails to live up to expectations.

#3: Make yourself familiar with the geography

China is a big country, with hundreds of industrial clusters on the east coast. If you’re lucky, you can limit your visit to a single city. Certain industries are in fact concentrated to single cities, such as Shenzhen. However, in other industries, suppliers are scattered all over a province – or even the entire east coast.

First of all, you need to make a traveling plan. Getting to China is easy, and there are direct flights to major cities such as Shanghai, Hong Kong, Shenzhen, Guangzhou and Beijing. But most suppliers are not located in these cities (with the exception of Shenzhen). Instead, you are likely to find yourself spending time provisional cities like Taizhou, Foshan, Dongguan and Changzhou.

Getting there is not that much of a hassle though, thanks to China’s high speed train network. You can get to basically any city on the east coast by train. And that’s about as far as you need to get on your own. Any supplier worthwhile visiting will take you from there to their factory by car.

#4: Confirm the suppliers factory address

It’s common that suppliers, even those who are manufacturers, trade products supplied by subcontractors. It’s not always a bad thing though, but I prefer to be aware of such arrangements before I make my way to whatever village the supplier is located in.

All Chinese companies have a registered address. If the supplier is actually manufacturing the products, the factory should be located at the same address as specified on their Business License. There are exceptions, but this is the general rule.

If the supplier brings you to another address, they are probably taking you to a factory that’s not theirs. But then again, sub-contracting is not always a bad thing. What’s important is that you make your supplier understand that they are going to be held liable for defective products. This is a relatively small issue when dealing with qualified and organized manufacturers, that are in turn outsourcing certain products to sub-contractors. They have assets, and it’s not so easy for them to “disappear” in case things turn out bad.

But that doesn’t apply to smaller trading companies, that consist of little more than an a small office and a few employees. Apart from old laptops and dusty product samples, these companies have no assets. They can’t afford to compensate you if they would run into quality issues. It may also be in their interest to align with the manufacturer, rather than you, in case of a dispute. Stay away from these companies.

That being said, there are also reputable Trading Companies that act as exporting platforms for tens, sometimes hundreds, of manufacturers.

#5: Prepare product related questions

When communicating with a supplier on the internet, you rarely get further up their organization than the sales agents. However, you can expect a lot more attention when you show up in person at the suppliers factory. This means that you’ll get access to their managers and engineers - the people who are actually qualified to talk about their products and manufacturing capabilities.

Whenever I go out to visit suppliers and sit down with their engineers, I get to hear things the sales agents never told me. Probably because they are more concerned with making the sale, rather than telling me the truth. But also because sales agents are not engineers, they spend their days drinking tea and gossiping with their friends on WeChat -  apart from a few occasional conversations with potential customers. The engineers, on the other hand, are qualified to tell you what they can do, and what they can’t. I can recall plenty of times when the sales agents had promised things the supplier was simply not able to deliver on.

While you got the manager’s attention, it’s also a golden opportunity to make them understand that you’re not a gullible idiot. Make them aware of planned quality inspections and lab tests. It’s always good to put pressure on a supplier to comply with your quality requirements and product specifications.

Chinese companies are top heavy, and the only way to make things run smoothly on the production line is by applying pressure on the people in charge.

Inspecting the factory

The production line tells a lot more about a supplier than their brand of instant coffee or what car the owner is driving. Perhaps his new Audit was (involuntarily) financed by the last customer who didn’t bother to hire a quality inspector. The first thing to look at is how well they monitor product quality during the different stages of production. This is what you need to take a closer look at:

#1: Incoming materials

Manufacturers are not “Santa Claus workshops” that make every single material and component in house. They purchase components and materials from tens, sometimes hundreds, of domestic and foreign subcontractors. When quality issues occur, these subcontractors are often to blame (and many suppliers try to use that card).

What really matters to you is that the supplier checks the quality of the incoming materials and components. They shall also separate components and materials that are compliant with certain standards (such as REACH), from those that are non compliant. A supplier that’s not able to manage such separation is a major liability.

#2: Production lines

Manufacturing is not a science, there are always quality issues. What differentiates a good supplier from a bad supplier, is that the former monitors quality during the production process – and minimizes the number of defect units that slips through unnoticed.

A supplier that cares about maintaining a high quality standard has several checkpoints throughout the assembly line. They shall also be able to show how they define and manage defective units. A supplier claiming to have a zero defect rate during production is simply not monitoring their production well enough – if at all.

#3: Assembled products

Products coming off the assembly line shall also go through a final check. While a supplier is not necessarily testing every single unit, a final quality check shall include 2-5% of the batch. Finally, the supplier shall also maintain quality control records. If they claim to be ISO certified, they are even required to maintain records.

Is the supplier’s production lines busy?

It speaks for itself. A supplier with empty warehouses and dozing workers is obviously not doing that well. There’s a lot of overcapacity in China. Plenty of suppliers barely get enough orders to make ends meet. Doing business with such manufacturers is a liability. Even if they have the best intentions, suppliers operating on the edge of bankruptcy are not liquid enough to compensate buyers in case serious quality issues occur.

Before you leave, check out the factory warehouse

Not all manufacturers in China are geared towards Western markets. Many, of not most, are primarily made products for the domestic Chinese market, and developing markets in Asia, Africa and Latin America. That’s not saying that these suppliers are “bad”, but it may indicate that the supplier is not that knowledgeable about Western quality requirements and product certification requirements.

That’s why spending some time in the factory warehouse is a wise decision. This is where the suppliers stack hundreds of cartons, before being loaded into containers and shipped to buyers around the world. There’s only one thing that’s better than a warehouse full of goods about to be delivered, and that’s a warehouse full of goods addressed to buyers in your country.

These are strong indications that the supplier is not only kept busy with regular reorders, but also that they are well aware of product regulations and quality expectations in your market. And that is something you shall never take for granted when doing business in China.

This article was first published here

Fredrik works at ChinaImportal, an e-commerce platform that assists businesses looking to import products from China.