Entrepreneurs have been urged to desist from spreading their businesses too thin if they do not have the financial wherewithal, experience and knowledge to do so effectively.
Instead, they should consider, where necessary, franchising as a way of expanding their branch network and visibility in other areas where they are not present but see a potential.
The President of the US-Ghana Chamber of Commerce, Florence Torsonhart, gave the advice when answering questions during one of the breakout sessions at a two-day Global Women’s Professional & Business Conference at the Accra International Conference Centre.
Franchising is a business relationship between two entities wherein one party allows another to sell its products and intellectual property.
For example, several fast food chains such as KFC and Dominos operate in Ghana through franchising
Mrs Torsonhart said many entrepreneurs are often tempted to spend money to open new outlets of branches in areas where they do not have much knowledge about or the financial strength and noted that, instead of going through that ordeal, it would be better to sell a franchise to another person or business interested in dealing in “your products or service to do so while you sit back to take the royalties”.
She said franchising demanded a lot from the owner of the franchise to make it attractive and these include quality products, effective and efficient customer service and strong selling proposition.
In the area of ensuring business continuity when one was no more, she stressed the need for entrepreneurs to contact credible insurance companies which have products that can help the business to continue even in the owners’ absence through death or accident that makes one incapable of working.
Mrs Torsonhart said taking such an insurance helped to protect the owner and its employees from risks and liabilities.
She said taking the right insurance coverage could give the entrepreneur peace of mind and safeguard one’s financial future.
It can also provide additional benefits such as tax deductions, help with legal issues and access to additional capital.
Mrs Torsonhart also asked the participants to consider what she described as the “Foundations or the Trusty Tripod”.
She said the first of the tripod was about “Narrow Target Market” noting that, right from the beginning of the business, one should be able to narrow their focus to be able to do things better to achieve their objectives.
Using Facebook, Harvard, Amazon among other greats as an example, she said spreading one self too thin was dangerous and could affect the beginning for a startup or slow down the progress of an existing business.
The second point was about “Exciting Value Proposition” saying as a business, there should be one or a few things that should differentiate a business from competition.
She said much as one may have a product or service that is common in the market place, “yours must have a unique distinct character that draws the crowd to you at all times”.
According to her, often times, many businesses do not have that exciting value proposition and that makes their products or service “just another one”.
Mrs Torsonhart on the third point explained that the entrepreneur must be able to have a “Scalable Marketing Plan”.
She said that was crucial because the entrepreneur should be able to have a strategy that allows them to grow their startup without sacrificing their budget, quality or customer satisfaction.
Mrs Torsonhart said starting a business can be tough but noted that with the right focus, ambition and tapping into the knowledge of how others made it, it could set one on a positive trajectory to succeed.