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If you are contemplating on entering the world of business as an entrepreneur, you will have two alternatives; either opt for self-own business or partner with a franchise brand. However, it would be difficult for first-time entrepreneurs to operate their
If you are contemplating on entering the world of business as an entrepreneur, you will have two alternatives; either opt for self-own business or partner with a franchise brand. However, it would be difficult for first-time entrepreneurs to operate their own business because of the high marketing costs involved and the lack of knowledge about the business. Conversely, low-cost franchise businesses are certainly better propositions as the franchisee, besides getting the brand name of an already established brand, also receives business know-how from the franchisor, thereby easily penetrating the market in lesser time.
Establishing a low-cost franchise business is easier and a better choice than opting for an self-own business because it requires less capital investment to start the business, is low on risk, high on investment returns, lesser time to break-even, backing of an established brand, high footfalls expectancy and lower operating cost.
Low-cost businesses have both positive and negative aspects. Though there is no guarantee that a business idea would succeed, it is possible to assess whether the business idea is feasible. Your business could fail if you lack business knowledge and enter the low-cost business without proper market research. Maintaining standardisation at all the franchise outlets is equally essential to target the customers.
For any individual, be it housewife, retired professional or any aspiring entrepreneur, franchising is one model that provides an alternative to starting the business with investments ranging from zero to thousands to lakhs of rupees. Franchising is an attractive industry which is growing by leaps and bounds. According to research agency reports, franchising in India is growing at the rate of 30 per cent per annum despite the slowdown in other sectors. About 30 per cent of business in the franchise industry is from the education sector and around eight to 10 per cent from the food and beverages sector. Undoubtedly, these sectors offer huge opportunities to aspiring entrepreneurs to be part of the franchise industry even with low-capital investment.
For example, more and more retailers, today, are interested in the kiosk model. When asked, most of the retailers said that a sample test is undertaken whenever something new has to be tried out and same is the case with the kiosk business model. Companies find kiosks as the best option to test a model, its operations and products and services. The company and the franchisee can experiment in the market with this model. Easy to set up and moved around make the kiosk model more popular.
Low-cost franchise formats have been accepted internationally as viable options that work well in all geographical locations. It is the right way for budding entrepreneurs to enter a country, a majority of who are from the medium income group. Whereas low investment generates faster returns on the one hand, it provides a wide opportunity to participate in organised segment on the other. Owing to the plentiful benefits that this format provides, Indian franchisors have begun to offer this low-risk success formula to their franchisees.
In the following pages TFW showcases business opportunities from various sectors like food & beverages, education & training, retail and others which can be started with an investment of below Rs 10 lakh. We also highlight the pits and falls of this low-cost industry and the areas where this model works well.