Expanding Businesses Part I

Taking pages off the plans from a bakery, a beauty company, a shoe retailer and a restaurant.

On Franchising / Licensing

To franchise or licensing chains of shops requires lots of attention.

The following areas are of major concerns:

• documentation. There has to be submission of training manuals and operation manuals.



• track records. People who have seen your visible success or known for its core businesses that are replicable.



• reliable people. One has to prepare for the road-shows, marketing materials, and managers to convince the parties to take up the options to support the growing number of outlets.



• 2nd/3rd party experts. Be prepared for legal advisors, planners and forecasters, market researchers, and public relations consultants.
  

One of the greatest weaknesses will be the ableness to guarantee a certain amount of Return of Investments (ROI) in which most investors, franchisees and license are wary of. The other aspect of worrying state would be the maintenance and also the support services provided to the area management.

Contemplating franchising or licensing, one should put in the mind that not all franchise can be successsful. Whilst it is indeed wonderful to see companies such as Old Town Cafe doing so well with its 80 outlets, one has to know its historical background and wealth derivation from which drives its expansion plans as well as being in the niche market. http://www.oldtown.com.my/index.php?option=com_content&task=view&id=35&Itemid=55

Likewise, one should not put all eggs in one basket. It is better for a business owner to retain at least 20% number of outlets as his own whereas remaining 80% are franchise off. By having the 20% helping to provide margin of profits, those monies can be well-used to cover up certain eventful expenses that affects certain areas of businesses.

In the case where one pursue 1 to 1 (or 50%) or more, it is certainly less risky albeit slower growth option.

On Public Listing Exercise

Many companies afforded experts to provide public listing exercise to float their companies in the local and foreign stock exchanges.

Over the years, such exercises had proven to have taken a toll on the management group where they are ill-prepared for such as hiring of experts, stock brokerage houses, market to launch at and general economic weather.

Currently the economic nature is such that Initial Public Offerings of newly listed companies are getting soft and this shall impact the pricing to go down instead of the opposite way.

In this instance, were overall economic nature is foreboding, one should postponed the IPO until such a time where one is to get good pricing for its stocks.