The See-Saw Affect

Why Small Business is Succeeding

It’s interesting to see who is growing and succeeding in the global economic downturn. Strangely enough for some business, times haven’t been this good for a long time. It seems to often be the case that one person’s success is another person’s failure. While some markets are failing others succeed due to that failure.

Franchising, like all other markets, also has is opposite. In a strong employment market, where job security and pay-packets are high, there definitely seems to be a trend of less people investing in franchises.

This may be for all sorts of reasons, but primarily it probably comes down to a few.

Firstly why pay $100,000 or more for a business when you can get a job for free, especially if the business may only return the initial investment after 2 or 3 years?

Another is why have all the responsibility for the success of the business, when I can keep my job and have none?

And of course in a strong employment market people often get inflated salary packages because there simply are not enough people to fill the positions available

All of these reasons have their merits, and to be honest, for some people, they are simply not risk takers or entrepreneurs; it’s not in their makeup. So for them having a job is the only option. However for those open to starting their own business there is definitely another side to the arguments.

The only problem with a lot of these reasons is that they tend to be true if you have a short term view. In the medium to longer term however they often come unstuck.

We have just seen, in the last year or so, once very strong banks and massive companies, have gone under overnight. In almost all of these cases, if you were a betting person you would have said a job in that company would be a job for life…….not anymore

The job market has also collapsed. Unemployment is growing globally, and the salaries that people once could expect are no longer on offer. The numbers of people needed to fill positions are getting fewer and fewer as large companies down size and streamline their operations.

And where once it was hard to find a person to do a job, you now have more applicants than you know what to do with.

Its in exactly this type of climate that franchise businesses start to prosper. Most franchise brands have strong business models and those that have been around 10 years or more, weathered the last downturns.

It also makes a lot more financial sense to set yourself up in a business where you are the captain of the ship. Rather than waiting with baited breath every month for the latest list of employees to be made redundant.

Small business is making a comeback and Franchising is at the leading edge of this wave. Small business can quickly, upsize or downsize according to external market demands. Small business reacts more quickly to customer expectations and is perfectly matched to give best service and quality. Customers will always prefer the face to face, the one on one and the more intimate experience of dealing with a small business, versus a larger faceless corporate entity.

So as the big businesses fall and shrink the little ones are preparing to fill the gaps left behind.

Elton Williams

www.franchiseexpo.com.au

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