Any business becomes successful only after facing numerous challenges that can either make, or break the business. Let’s have a look at few such challenges faced by any low-cost businesses
Entrepreneurship is being recognized as a panacea to many economic problems in India but a big sprawling business is not possible by all. Most entrepreneurs start small then gradually spread it via franchising etc. According to Anil Sharma, Vice-President, Retail & Franchise, Ferns N Petals (FNP), “Low investments and high returns always work well to grow the business that’s why FNP adopted this low-cost business model in 2002. Today, in metro and non-metro cities any person can take FNP franchisee in just Rs 6-7 lakhs. At present, FNP has 252 outlets across 93 cities in India. This model has made FNP the world’s largest chain of flowers.”
However, there are few challenges that an entrepreneur needs to be prepared and address during his/her journey, which are listed as below:
Capital deficiency at initial stage: Any business -- self-owned or franchised -- needs enough capital, which is difficult to arrange at an initial stage. Finding the right amount and kind of investment is an increasing challenge for entrepreneurs. The government and private sector investors have set aside funds through investment channels, but they are not available for all forms of business.
Finding a viable retail location: A high footfall location is a must for the success of any business. Similarly for a low-cost business finding, a viable retail location is a big challenge for any entrepreneurs. Any franchisee or entrepreneur opting for a low-cost business wants to get high financial returns in future. For this, selecting a good location is must.
Team competence: A company is only strong with its team. In order to establish a business, it needs to be built and supported by a dedicated group of individuals, who can focus on their goal and at the same time drive the business to fruition. While it is good to let novices prove themselves, an entrepreneur must continue to look out for the advancement of their enterprise by hiring experienced people.
Innovation & Digitalization: For any low-cost franchise, there has to be continuous innovation and quality maintenance, which requires a lot of cash inflow. This brings forth another challenge for low-cost entrepreneurs, who also need to advertise about the brand as well. Moreover being in the 21st century, digitalization also poses a challenge for low-investment entrepreneurs, as they do not have the capital and time for digitalizing their technology.
Finding like-minded people: It is of utmost importance that the owner finds like-minded entrepreneurs for their expansion plans. This also poses a challenge.
Overcoming the challenges
All entrepreneurs have faced some or the other challenges in the way of their success. The only way to deal with them is by being persistent and never giving up on your dreams.
All the above challenges can be overcome easily with patience and recruiting loyal employees, franchisees, etc. Sharma of FNP shares, “We overcame all challenges like finding like-minded people, getting viable location, untrained manpower, innovation and digitalization by conducting various training workshops at regional and national level for our franchisees as well as for our employees.”
On the other hand, Sohrab Sitaram, CEO & Director, Keventers, says: “Scalability is the key in a low-cost franchising model, this ensures that the person is able to do multiple units and is able to mitigate any sort of risks associated with this. Secondly, RoI is much quicker in a lower cost model.”
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