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B2b ‘Business-to-Business’ means earning money via serving business brands than individuals. The latter Is B2c ‘Business to Consumer’. Why are majority of entrepreneurs jumping into the pool of b2b opportunities? We give you a plenty of reasons.
“I prefer taking a franchise of a brand that makes shoe laces than a renowned footwear brand. I want to play in volumes, as this is a business trend these days,” says, Ravish Singla, a potential entrepreneur. Low investment, better consumer connect, wider clientele, no funding ‘fundas’ and location hassles, high on returns etc makes B2B franchise opportunities viable for potential franchisees.
Franchisors and brands, presently involved in retail or have a concept where in they sell products are also changing their priorities in terms of their clientele. Retailers are now targeting corporate client base for earning profits in volume. Many franchisors believe that growth is better if they concentrate on business-to-business, since it engages more volume.
As per Samit Lakhotia, Co-Founder and Director, Strategy and Business Development, Refeel: “Low investment and a better consumer connect makes service based franchise better than product based.”
Franchising in business services sector is fast picking up pace as it offers multiple benefits to franchisees. Besides an established business model, a franchisee also avails the benefit of serving the existing corporate clientele of the franchisor. Therefore, a franchisor does not have to put in extra efforts to build client base. The cross geographical sharing of database is the most significant aspect of franchising in business services.
When asked about the reason of business services franchise being more profitable than a product/service based franchise? Anurag Poddar, Director, Presto Wonders, says: “A business service franchise offers 360 degree solution where as a product based franchise simply has the product on offer. For instance, if I'm given a business service franchise, you are actually offering me the entire system...how to make the product, how to sell it, etc. But, if it's a product based franchise then you simply offer me with the product. Hence, it is like having a good product and not knowing exactly what to do with it.”
Commenting on the same, Anil Gupta, M.D.,Sparket, says: “ Since customisation is required, the profits are large here in business services franchise and the unique combination of more number of customers with more number of products makes it that much better against fragmented competition of a product-based franchise.”
Rewards and returns B2B offers
The utmost significance of taking a business-to-business franchise is that majority of these are recession proof. Especially, courier services, logistics and cartridge refilling franchises are key examples. Other than this, there is another attraction; a prospective franchisee doesn't have to get involved in public dealing. A B2B franchise attracts a quintessential set of people, depending on the particular sector. But majority of franchisors seek franchisees who have already toiled themselves in the corporate world and have been involved in assigning resources in the organization and can also manage outside resources too, as all these skills are apt for foraying into business services franchise.
Additionally, there are other benefits of taking a business-to business franchise:
No location hassle: Business services franchise does not require high street premises, or a location at a high-end mall and can even be operated from home. Unlike other retail franchise business options, business service franchises save on rental expenses. Apart from financial savings, being able to operate without premises affords business franchises much great scalability.
Play in volumes: One deal and multiple margins. Volume play is the theme of the B2B franchise. A franchisee does not have to bother about selling to it on one to one basis. Post taking a franchise, a franchisee gets an opportunity to serve the existing clientele of the franchisor and also gets returns in volume unlike other businesses.
Operational cost: Simple interiors, limited number of employees, a compact office, minimal gadgets is what one requires to run a business service franchise. Besides a few sectors, majority of B2B franchises are operational in small offices. This reduces the operational cost for a franchisee as he does not need to maintain a swanky office.
Business-to-business franchises account for a big proportion in franchising. For detail information about the leading brands that are offering franchise of an already successful business to business concept, don't miss to go through our 'On The Cover' section in the following pages which is packed with useful tips and advices about where and how to invest.