A Primer on B2B Franchises
By Rick Bisio | Creator of The Educated Franchisee | Franchise Consultant
When I work with people who are considering buying a franchise, I sometimes ask them to list the first five franchises that come to mind. Usually all five are business-to-consumer (B2C) franchises such as restaurant or mailbox type franchises.
The purpose of this article is to let you know that there’s another whole world out there! Business-to-business (B2B) franchises, which provide services to businesses, rather than to individual consumers, are one of the fastest growing sectors in franchising. Products and services range from temporary personnel placement to commercial window cleaning. They include sign companies, computer support, business coaching, printing, marketing services, logo apparel and on and on.
For many potential franchise owners a B2B franchise can be the perfect fit. Many people who leave the corporate world to buy their own franchise have spent years promoting their products and services to other companies or to other departments within their own company. They are comfortable and skilled in this type of environment. They enjoy professional business relationships. They are good at structuring solutions.
B2B franchises frequently need less physical infrastructure than B2C franchises. They are usually scalable and many B2B owners appreciate that the business is generally open Monday through Friday, during traditional business hours.
A B2B franchise may be less expensive to get into than other types of franchises and may have lower operating expenses. In many instances, overhead is lower and marketing is more targeted, which is typically less expensive than marketing to the masses.
One item that can keep overhead down is the amount a B2B franchise pays for rent. While retail space can be pricey, most B2B franchises are located in office buildings, where space is less expensive. Some B2B franchises are even home based. For example, an IT firm might actually be an association of high-level IT subcontractors, who travel from their own homes directly to the customer’s site.
Some B2B franchises do require retail space. For example, a staffing firm that needs to be accessible to numerous potential employees might be located in a retail location; an auto parts store that caters primarily to auto repair businesses could also be open to the public.
As you can see, there are tangible advantages to owning a B2B franchise. But there can also be disadvantages. If you do not have a strong business background you may have trouble working effectively with business people, who tend to be busy and to-the-point. B2B franchises tend to work with a smaller number of large customers, rather than many individual customers. The loss of one customer can make a large dent in your top line. And since competition in the B2B arena tends to be sophisticated, you have to be at the top of your game.
But if you have strong business experience and are one the scores of people looking to take the next step in franchise ownership, don’t overlook B2B! It could bring you enjoyment, monetary rewards, and some weekends off!
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