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 organically 1 Advantage:

No risk because you’re using your own money

Grow organically 1 Disadvantages:

You have to wait until profits accumulate

That means less profits for you

Borrow money to grow 2 Advantage:

You can use the money immediately

Borrow money to grow 2 Disadvantages:

You have to pay interest You increase your risk as you increase your debt

Obtain money for equity 3 Advantage:

You can use the money immediately

Obtain money for equity 3 Disadvantage:

You have to give away part of your business

Leverage marketing channels 4 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 channels 4 Advantage:

Your channel partners use their existing

networks and resources to sell on your behalf so you don’t have to

provide your own networks and resources

Leverage marketing channels 4 Disadvantages:

They get a piece of the action, often sizeable

You have limited control over how they market your

products or services

franchising 1 In 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).

franchising 1 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.

franchising 1 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 Model A business operating successfully in the same format you intend to offer as a franchise.

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

3. Franchise Systems and Manuals Documented 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 Marketing A way of reaching and marketing to prospective franchisees. 6. Franchise Support People and Systems People to work with your franchisees to develop their businesses and monitor their sales.

licensing 2 In 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.

licensing 2 Given 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. F l i d th

What’s the difference between licensing and franchising?

Licensing Varying interdependence

Franchising Long-term interdependence

Examples of licensing

Ideal for products,

services, and intellectual property

licensing 2 Advantages: Rapid expansion of your brand and sales through

third party Minimal capital outlay

Risk spread by licensees Usually less “hands on” than franchising - less resources and support

required

licensing 2 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 alliances 3 A 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 alliances 3 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 alliances 3 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 us 2