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Feb, 11 2013

SPENDING LESS, MAKING BIG MONEY

As an entrepreneur ventures into a new business, he requires having a unique and sellable product and a technique to sell it, high investment with a plan to generate multiple returns. The task becomes effortless if the entrepreneur takes up the kiosk form

BE it the high-end malls or shopping plazas, one thing which is common is the presence of a kiosk at almost every shopping plaza or mall. The kiosk format has become a popular one, be it the food and beverage, telecom or fashion industry. A kiosk format is preferred as it has low-investment and high-returns which has turned out to be a goldmine for entrepreneurs who are keen on the 'plug-and-play' concept present in the kiosk format wherein the business can get started within 10 days of the franchise agreement.

When it came to taking the family-owned business, Mitesh Gaiwala, Managing Director and Creative Head, GreenLands  the Garden Boutique, decided to launch his brand in a kiosk format. The brand, Greenlands, deals with home gardening plants and accessories required to beautify indoor spaces with greenery. The best location of the kiosk is generally on exit drive ways or basements as plant lovers shop and drive out of the mall/store.

Likewise, Rahul Bhuyan, Franchise Development Manager, Florista, asserts: “The kiosk format is very attractive, easy and quicker to replicate across locations.” Another factor which makes the kiosk format popular is that it involves a low investment proposal for prospective franchisees.

While Ranjit Singh Makkar, Chief Marketing Officer, Appmart, asserts: “In a kiosk format there are activities which are centred on these kiosks. However, in such a format the entrepreneur must have patience and it would atleast take three to four months for your business to grow. The plus points are that the locations of kiosks are high footfall areas and at the same time affordable too. But you should know the ways to bring customers to your kiosk.”

Kiosk format promises potential

Besides the increasing popularity of kiosks, the format ensures great potential for your business venture owing to its low investment. The kiosk format works well for impulse buying of products and also for an unorganised sector getting organised. Also, the capital required for this format is less as compared to opening and running a standalone store. Hence, kiosks or an SIS format have a great potential in the Indian market. In a nutshell, with the increase in rentals across all high streets in the country, kiosks in good malls are always a good bargain.

Thus, the most appealing thing about a kiosk format is low investment and optimum location of the kiosk which has the potential of generating high yields. As most of the entrepreneurs and franchise experts feel the strategic location of the kiosk helps in attracting potential consumers and it does not make a hole in your pocket as well. With the increase in rentals across all high streets in the country, kiosks in good malls are always a good bargain.

The kiosk format follows in the footsteps of cash and carry business, while in the traditional format half of the things present at the shop are on credit and the owner does not even know whether he will get the money back.

Franchising, the kiosk way

Like Greenlands, Florista and Appmart several brands are following the franchising route where the kiosk format has been adopted. The owner of Greenlands also follows the franchise model. “This Green business is like digging gold from mud; once you manage to operate one outlet, you will want to open more outlets. Also it requires personal involvement, maintaining inventory, managing staff and investments. All this is smoothly managed through franchising,” elucidates Gaiwala.

Sharing his journey Gaiwala says: “In 2009, we started ‘The Garden Boutique’ catering to the home gardening requirements of the masses. We realised the potential and demand and hence decided to expand through franchising in 2011. After all R&D on the working and profitability of the retail business, we thought of expanding through the franchise model.”

Franchising is the only route available for expanding the business in this category. It is a very customer-centric and sensitive industry. A franchise owner with apt training and mindset would be able to give same quality experience to customers, which otherwise would be difficult.

In a franchise model all products are going to be available under one roof which is as convenient as accessing a company website.

Package of opportunities

All brands believe in rendering professional training and support to their franchisees as it helps in expanding the business and building the brand image in a refined manner. Similarly, Gaiwala avers that his brand Greenlands provides training to the sales staff and franchise partners about how to take care of the plants and products as they have to inform the same to consumers buying the products. It is important to make them understand the nature and application of the products. All the outlets of the brand are under the vigilance of CCTV cameras, so that the partners can remotely watch the operations. “Right from advising about the location for the outlets to setting up the kiosk till the time it's operational, we support all our partners to run a profitable business.

In the same way, Florista provides all its franchisees complete training in areas such as customer management, order management and store management. “The basic corporate guidelines and the systems to be followed are documented and are also provided to our franchisees which ensure that all customers receive the same experience across all outlets.

Even Appmart provides all information to its franchisees. Apart from the basic technical knowledge, the company trains them in soft skills such as communication and some selling skills.

Expanding for profit

Expansion of any brand reflects the growth and bright future of the brand. Greentrends plans to expand in years to come. Green is very much in, even the government, MNC's and institutions are backing up to plant more and more trees and have greener indoors to fight global warming. So, we have the advantage and ready market for all our products in metros, mini metros, tier I and II cities, which have good shopping malls, departmental stores and high street shopping areas.

Our target is to open around 150 outlets in India through franchising with a turnover of Rs 18-20 lakh each, that's Rs 30 crore per annum,” says Gaiwala.

While Bhuyan says: “With the industry growing at 40 per cent annually, and increase in demand by corporate as well as retail segments, there is a huge opportunity waiting to be tapped for a professional brand such as ours. We plan to open 200 franchise stores in India covering tier I, II and III cities in the north, east, west and south zones and then expand across the globe through franchising by 2015.”

Meanwhile, Makkar of Appmart has a different perspective. “We have not set any goals, but what we are aiming for is that whenever people think about apps, Appmart should be the only brand that comes to their mind.”

Franchise facts

Greenlands

  • Investment: Rs 2 lakh
  • Area: 150-200 sq ft.
  • Break-even: 12-18 months
  • Profit margin: 45%

Florista

  • Investment: Rs 5-6 lakh
  • Area: 300sq.ft
  • Break-even: 8-12 months
  • Profit margin: 200-300%

Appmart

  • Investment: Rs 10 lakh
  • Area: 36-40 sq ft
  • Break-even: 5 months
  • Profit margin: 46%
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