Congratulations if You’ve got this far with your business …

You have an existing business which has grown and become profitable, but the growth has slowed or plateaued.

What’s next?

You want more – but how do you expand your business?

Especially if you don’t have a lot of time or money?

And you don’t want to increase your risk?

Grow organically

Use the profits generated by the business to grow the business over time

1

Grow organically

Use the profits generated by the business to grow the business over time

1

Grow organically1Advantage:

No risk because you’re using your

own money

Grow organically1Disadvantages:You have to wait

until profits accumulate

That means less profits for you

Borrow money to grow2Advantage:

You can use the money

immediately

Borrow money to grow2Disadvantages:You have to pay

interestYou increase your

risk as you increase your debt

Obtain money for equity3

Advantage:You can use the

money immediately

Obtain money for equity3

Disadvantage:You have to give away part of your

business

Leverage marketing channels4

Channels are the middlemen which distribute your products or services to customers

• Wholesalers• Agents• Online sellers• Retailers• Trade shows• Direct sales• Network marketing• Factory outlets• Buying clubs• Cooperatives

Leverage marketing channels4

Advantage:Your channel

partners use their existing networks and resources to

sell on your behalfso you don’t have

to provide your own networks and

resources

Leverage marketing channels4

Disadvantages:They get a piece of

the action, often sizeable

You have limited control over how they market your

products or services

franchising1In Franchising, franchisees pay you, as the franchisor, for the right to use your successful business model, sell your products or services, and/or use your intellectual property (brand names, business systems, etc).

franchising1 Advantages:You expand using someone

else's money.

Franchisees are responsible for all the costs of setting up

their franchise business, providing their own capital and assuming the risk of

success or failure.

Franchises can open quickly, often getting a new

concept out ahead of the competition.

Franchisees are highly motivated operators.

You have greater control over a franchise channel

than other channels.

franchising1 Disadvantages:You need to put time and

money into setting up your franchise system, which will not be recouped until your

franchise reaches the necessary scale.

Franchisees require your ongoing support.

You risk potential damage to your brand and overall

business if some of your franchisees perform poorly.

You have less control over franchisees than if you owned the businesses

yourself.

What you’ll need in order to franchise

1. Proven, Replicable Business ModelA business operating successfully in the same format you intend to offer as a franchise.

2. Registered TrademarksProtection for your business’s brands and other intellectual property.

3. Franchise Systems and ManualsDocumented systems explaining every part of the business – operations, marketing, financial and training

4. Franchise Agreement The legal contract between you and your franchisees defining expectations and obligations

5. Franchise Recruitment MarketingA way of reaching and marketing to prospective franchisees.

6. Franchise Support People and SystemsPeople to work with your franchisees to develop their businesses and monitor their sales.

licensing2In Licensing, licensees pay you, as the licensor, for the right to use your intellectual property (brand names, artwork, characters, etc) and/or sell your products or services.

licensing2Given the popularity of licensing, many small businesses today must face the question of whether to manufacture a new product itself or license the production to another company. Major factors entering into this decision are the nature of the product and the relative strengths of the small business and its potential licensee. Experts recommend that small businesses examine their core competencies when deciding whether to license a product. For example, an in-depth assessment of the company's unique skills and abilities may indicate that it could make more money by licensing its manufacturing process than it could by manufacturing and marketing a finished product. Basically, if your company has the expertise and resources needed to make the product profitably in-house, then you should probably do so. If not, then it makes sense to find a licensing partner who can contribute the needed resources and expertise.

What’s the difference between licensing and franchising?

LicensingVarying interdependence

FranchisingLong-term interdependence

Examples of licensing

Ideal for products, services,

and intellectual property

licensing2 Advantages:Rapid expansion of

your brand and sales through third

partyMinimal capital

outlayRisk spread by

licenseesUsually less “hands

on” than franchising - less

resources and support required

licensing2 Disadvantages:

A licensee may licence other brands and

products, leading to a lack of focus on

yours.

Intellectual property control

and quality control issues.

Strategic alliances3A Strategic Alliance is an arrangement between two companies to share resources for a specific, mutually beneficial project.

You bring some benefits and advantages to the arrangement, and they bring some benefits and advantages to the arrangement.

Common reasons for entering into strategic alliances

• Developing more effective processes

• Expanding into a new market with your alliance partner’s existing network

• Utilising another company's innovations without having to invest in new research and development

• Combining complementary products or services

• Financing a mutually beneficial project or business opportunity

Examples of strategic alliances

• An ecommerce business could form a strategic alliance with an analytics company to improve its marketing efforts.

• An oil company might form a strategic alliance with a research laboratory to develop more commercially viable recovery processes.

• A fashion retailer might form a strategic alliance with a single clothing manufacturer to ensure consistent quality and sizing.

Examples of strategic alliances

Unisys and Oracle entered into combined global initiatives in areas such as financial services, outsourcing solutions, public sector and enterprise computing

Starbucks entered into strategic alliances with Barnes and Noble’s bookstores to provide in-house coffee shops, Pepsico to bottle its Frappacino product, United Airlines to sell branded coffee on its aircraft, and Kraft Foods to gain access for its products into supermarkets.

Strategic alliances3 Advantages:Each company in the alliance maintains its

autonomy while gaining a new opportunity.

Less involved and less permanent than a joint venture, in which two

companies typically pool resources to create a

separate business entity, or a franchise.

More cost-effective than an acquisition where you buy

the resources or capabilities you require.

Strategic alliances3 Disadvantages:Dealing with different and

sometimes conflicting objectives, values,

strategies and operating practices.

Time consuming for managers in terms of communication, trust-

building, and coordination costs.

Can result in taking your eye off the ball in your own

business.

Mistrust when collaborating in competitively sensitive

areas.

Becoming too dependent on your strategic alliance

partner.

How we can help you optm-ise your business

I'm Robin La Pere, director at No Ordinary

Business and Franchise Consultants.

Over thirty exciting years, I have been at

the forefront of tremendous innovation

and change across industries as diverse as

banking, retail, construction and franchising.

I have combined my wealth of experience as a senior

corporate executive, franchise director, entrepreneur,

writer and consultant together with the latest thinking

on business model generation, distribution channel

management and franchise development.

Among the ways I can help you to develop your strategy

and expand your business are three specialist services

designed to decide on the optimal way to expand your

business – hopefully using Other People’s Time and

Money!

Practice Specialties:

Business Model Assessment and Generation

Utilising the proven Business Model Canvas adapted by

No Ordinary for specific industries such as franchising

and retail to test the relevance of businesses’ current

business models and work with their senior teams,

suppliers and partners to develop more powerful and

sustainable strategic frameworks

Channel Development

Helping clients to improve the performance of their

existing distribution structure and identify, set up and

manage new channels appropriate to their business

model.

Franchise, Licence and Strategic Alliance Development

Developing world-class franchise and licence systems

using proven templates to save time and reduce costs,

and working with clients to identify and broker strategic

alliances.

1. We’ve been there, done that

We produced the t-shirt on expertise and experience in

marketing, advertising, content development and writing

of all sorts. But by no means does that mean that our

work isn’t fresh and vital and innovative. That’s why we

still love what we do, and our clients love what we do.

2. We’re based in New Zealand

Of course, that’s handy if you’re based in New Zealand

too, but if you’re from somewhere else, we offer some

real advantages. The first is that we offer international

experience and world-class expertise. The second is that

our first language is English, which is an advantage if

yours is too. The third is that we find that by using Skype,

Team Viewer and of course email, we can communicate

as effectively with our international clients as if we were

right next door. And the fourth advantage is that

because our country is small, our dollar probably isn’t as

strong as your unit of currency, and you may save

something in the exchange rate. If you’re Australian or

American you’ll currently save about 20%.

Contact us now

Visit our website at www.noordinary.co.nz for free

updates to this ebook, and articles and downloads of

other ebooks, reports and white papers. Contact Robin

La Pere on robin@noordinary.co.nz or phone 64 9

3606063. We offer a free initial consultation.

More compelling reasons for working with us2