As the UK economy suffers from more uncertainty, what kind of business leader are you planning to be over the next year or two?
Alan Wilkinson, our Head of Franchise Development, was lucky enough to attend a talk recently by Mark Berrisford-Smith, Head of Economics for HSBC UK. He had a very interesting take on what the UK is currently going through. While we are now officially in a recession, Mark made it very clear that this is a recession like no other – but not for the reasons you might think.
The press hits us with one bad news story after another these days, but Mark told us that, compared to past recessions, things are not nearly as bad as we might think. The average amount of household savings is far higher than in 2008, we’re not seeing the mass repossessions and bankruptcies of the past, and many sectors are still seeing plenty of growth – albeit sometimes slower than recent years.
Our perceptions of the economy have been so skewed by the terrible news in some sectors, that we are too easily ignoring the huge potential for growth still out there.
However you view it, though, there’s no doubt that things are far from normal, so how should forward-thinking business owners view the recession? There’s definitely two camps emerging…those who are battening down the hatches to ride out the storm, and those who see the potential opportunities in a changing situation.
Where do you lie on that spectrum?
We probably don’t need to tell you much you don’t already know about how recession threatens your business. Visit any news site or business forum and doom and gloom is all too easy to find!
The rising cost of living and energy not only means potentially larger overheads for your business, but less money for your customers to spend, too. You could be both losing income and spending more. Higher interest rates make borrowing less affordable, and volatility means banks are less willing to lend. The list goes on!
However, one of the biggest threats has to be all the uncertainty of it all. We just don’t know how long this will last, or how bad it could get. Worst of all, who knows which sector could be hit hard next?
The only light at the end of the tunnel is that you’ve already made it this far. Your business has already been through the pandemic and several changes of government, and has already proven itself robust enough to survive. The question is: how can you build on that, and is it even possible?
Scratch below what you read in the papers, and you may see this as the perfect time to grow and expand your business – especially if your competitors are in threat mode and sitting on their hands while you’re out there making the most of opportunities!
When it comes to investing, smart entrepreneurs recognise that, while risks are high, so are the opportunities for future returns. Less robust companies may not survive, providing an opportunity to increase market share and positioning. Recessions also shake up the status quo opening all sorts of avenues for those willing to innovate.
And let’s not forget: recession is anything but economic collapse. It’s just an end to what worked yesterday, and those who are already planning for tomorrow are the ones who will come out on top when the economy turns around. Not those who panic or, worse, do nothing.
What’s this got to do with franchising?
You’re probably already aware of many of the advantages of franchising as a business expansion model: less risky, but more easily scalable, growth, lower capital expenditure, and the increased ability to attract other people’s money to invest in your growth. All huge benefits even when the economy is doing well, and doubly so during a recession.
But that’s not all. In our experience, franchises don’t just survive during recessions, but thrive! Why?
Well, one great reason is that franchise recruitment tends to be highest during these times. More people are being made redundant or are worrying about their future, and the shake up to the norm causes a lot of people to reassess their priorities and future. They become more open to new strategies and opportunities.
Franchises are hugely appealing to the kind of people who are experienced in business and are highly motivated – in other words, exactly the kind of people you want to attract.
This is just scratching the surface, of course, but if you would like to know more about how well franchises perform during recessions, please do get in touch by scheduling a call. We’d be happy to talk about our experiences.
If franchising is that great, why isn’t everyone doing it?
You can’t just start calling yourself a franchise tomorrow and expect to get results. Like any growth strategy, it takes time, focus and planning.
However, there are more than 1000 franchises operating already in the UK, and the vast majority of them have weathered their fair share of recessions already. We’ve even worked with quite a few of them ourselves! Here are two great examples of successful UK franchises that we have had the pleasure of helping:
Water Babies: 20 years ago, this franchise started as a chat between the owner and one of our consultants around a kitchen table to thrash out a development plan. Since then, it has grown to 80+ locations worldwide and welcomes 52,000 customers every week.
Hub Care Support: One of our newest partners, but a real rising star who have taken on our bespoke blueprint with real enthusiasm and positivity. Together, we signed their first 3 franchisees last year, with between 50 and 100 new leads every month in the last quarter.
Is now really the right time to franchise?
Whether you consider yourself #TeamThreat or #TeamOpportunity, or anywhere in between, we completely understand it’s a tough time right now to make any sweeping decisions about your business. However, we are very confident in saying there’s no such thing as a bad time to start planning for the future and laying out your business growth goals.
Wherever you are in your franchise journey – still considering whether it is the right route for you and your business, or an established franchise who wants to take things to the next level – we’re here to help.
Why not reach out and see what we can do for you?