Business Thinking 2010
Cathryn Hayes - HSBC Head of Franchising
HSBC has recently launched a new campaign ‘Business Thinking 2010’ to help UK companies turn their great business ideas into reality.
The Business Thinking initiative, in partnership with Telegraph Media Group, will give selected companies the chance to achieve their potential by learning best practice from commercial leaders worldwide.
Eighteen companies will benefit from up to £90m of loans, which come with cash grants of up to £100,000 each. Those companies short-listed will take part in networking events in the Americas, Europe and Asia where they will meet some of the foremost management thinkers in their business fields. There will also be opportunities to meet potential business partners, buyers and suppliers.
Noel Quinn, Head of CMB UK, said: “What we are trying to do is help UK businesses realise the potential that exists in the broad market, the world, rather than just the UK market.”
The businesses could have existing international operations and are looking to expand into new markets, they could be first-time exporters or even UK-focused businesses keen to take creative business thinking and apply it to their own ventures.
Businesses looking to take part in Business Thinking 2010 will have sales of at least £2m and be planning to take advantage of the economic recovery to expand in the UK or build their international footprint either organically or through acquisitions.
This could be an ideal opportunity for franchisors looking to further develop their franchise business either in the UK or internationally. If you would like to take part, simply complete the Business Thinking 2010 online application form by 25 June.
The regional finals will take place during October and early November followed by the national final at the end of November.
For further information, take a look at the Business Thinking 2010 website.
Tags: business loans, business thinking, Franchise Finance, franchise loan, hsbc, hsbc business, hsbc franchise unit
Getting Finance for your Franchisees
Cathryn Hayes - HSBC Head of Franchising
When looking to purchase a franchise, one of the most critical areas for prospective franchisees is obtaining finance. You, as franchisors, can help by advising individuals on what information they need to present to the bank in order to make the process of gaining finance as easy as possible.
Here are some key pointers to help prepare your franchisees for that first meeting with their bank:
- Ensure they produce a concise plan that sets out a clear strategy for their business.
- Their business plan should include well thought out financial projections, including a cashflow forecast, profit and loss account and balance sheet, ideally for between one and three years. This is a key area where you can give your franchisees an advantage over conventional start-ups by assisting them with the figures, based on the existing performance of your current franchisees. However, the franchisee must own and understand these figures to present a credible case to the bank manager. All too often our Commercial Managers tell us that they have been presented with figures that a potential franchisee cannot explain.
- Include a marketing plan detailing how they will target their potential customers and the unique selling point of the product/service offering. Again, you will be able to assist them with this.
- The plan should address any risks facing the business and what action needs to be taken to either prevent them or minimise their impact.
- Finally, encourage your franchisees to practise their presentation before meeting with the bank to ensure they deliver a professional “pitch”.
There is still funding available for sound business propositions. Your franchisees are in a stronger position than a stand alone start-up due to the help and support of their franchisor and other franchisees in the network.
Requests for funding are more likely to be agreed, if they present a professional and credible business plan.
Posting adapted from the monthly HSBC Connections newsletter. For more information or to get on the mailing list for the newsletter please email franchiseunit@hsbc.com
Tags: cathryn hayes, finanching a franchise, Franchise Finance, hsbc franchise unit, obtaining finance
Economic projections for franchising in 2010 from HSBC
Cathryn Hayes - HSBC Head of Franchising
As we enter a new year, we take a look at what 2010 holds for the franchise sector – and find there are lots of reasons to be optimistic.
There can be no denying that 2009 has been a turbulent year; the UK has been in the longest recession since records began, interest rates are at a historic low, the Bank of England has pumped £175 billion into the economy and many businesses have been struggling.
But the UK franchise market has remained resilient, even when faced with the toughest trading conditions for years. The sector is home to some of the UK’s most successful brands and, in spite of the economic climate, there is plenty to be optimistic about.
In fact some sectors, like fast food and domiciliary care, have continued to expand their operations and reported increased profits throughout 2009.
So what does 2010 have in store for franchise business?
Research from the Institute of Directors (IoD) found that 65 per cent of directors believe the economy will see an overall upturn in 2010/11. The IoD’s chief economist, Graham Leach, said that incentives from the Bank of England, such as quantitative easing, have lead to an increase in confidence about 2010. But having said that, there is still a great deal of uncertainty.
HSBC’s economic experts expect the Bank of England to begin increasing the base rate from May next year, finishing 2010 at 2 per cent and rising to 3.5 per cent by the end of 2011. Individuals will need to protect themselves against this rise.
The British Chambers of Commerce chief economist, David Kern, pointed to other factors as the cause of improving confidence. “The housing market is improving, the stock market is improving, and many businesses are realising that they are resilient, having survived the recession so far,” he said. Control costs to ensure survival into the upturn, cost control is a number one issue. It is always vital to keep a close check on how much money the business is owed – franchisees should stay on top of invoicing, chasing, credit checks and so on.
Recovery is on its way, so this is a good time to be innovative and think about how to improve market share in the upturn. Franchises have a distinct advantage over other types of business here; as the franchisor, you can help keep your franchisees focused and share your considerable knowledge and experience.
The future of franchising isn’t entirely controlled by external events – franchisees and franchisors can make a big impact to ensure the sector continues to be a successful, essential part of the UK economy.
Clever marketing, high service levels and knowing your customer are key.
Tags: economy, franchising, hsbc franchise unit
