Why franchising is the smarter form of entrepreneurship
Over the last few years, we’ve seen a great surge in the number of Australians making the switch to self-employment with many in favour of becoming their own boss. But for those who are new to business, is this really the best move?
It’s no secret that the startup culture is thriving, but for entrepreneurs without experience, the road ahead can present many risks with failure rearing its ugly head at every turn. Many attempts to go it alone and start something from scratch but I believe that this is riskier than investing in an established brand and system which is what franchising provides.
I began my career with Stockdale & Leggo back in 1981 as a real estate agent before quickly recognising the potential to turn the business it into a franchise, effectively introducing the franchising business model to the real estate industry in Victoria.
In 1986, I purchased what was then a seven-office company and set out on my mission to transform it into what is now a 70-office strong agency. It wasn’t long before other real estate agencies also introduced the franchise model to their brands. Why? Simply because it works.
Here’s why I believe Stockdale & Leggo has seen so much success, and why franchising really is the best business foundation in today’s economy.
Perhaps the most attractive aspect of buying into a franchise as opposed to launching your own business venture is the fact that a franchise offers an added layer of protection and reduced level of risk. While signing on to a franchise can’t guarantee your business success, it can offer a tried and tested business model with proven success. As the old saying goes, you can lead a horse to water but you can’t make them drink, and ultimately it is up to the franchisee themselves to take advantage of the tools offered. As with most things in life, those who are willing to put in the work are the ones who will see the greatest success, and franchising can offer a fast track to getting there that is free from the setbacks that so often occur when launching your own start-up.
As anyone in business would attest to, strong systems are vital to business success – and this is something that the new entrepreneurs often seem to struggle with, especially during a growth period. Creating an effective set of systems is no easy feat, and often these systems can start to fall apart once you experience any considerable kind of growth. However, when you’re operating as part of a franchise network, the franchisor will have already put in the hard work so you won’t have to. Whatever problems you encounter are likely to have already happened at least once before, so rather than floundering when issues arise, you can expect to have an effective strategy to fall back on. Real estate in particular relies heavily on strong systems, and I would argue that without them an agency would have a really hard time in trying to grow.
Another challenge that is often faced by new businesses is the fact that they are essentially unknown. Trying to convince a new client or customer to take you on when they’ve never heard of you isn’t easy, as they lack the brand awareness that is closely linked with trust. On the other hand, when your business is part of a
highly reputable franchise such as Stockdale & Leggo, they are likely to already have a certain level of understanding about your service, regardless of whether they have worked with you in the past or not. In an industry such as real estate where trust is so important, you simply can’t underestimate the value of a well-established brand and a strong reputation.
Finally, perhaps the single most valuable thing about franchising is the support and guidance you receive along the way. This is something you just can’t find in any other business model, and certainly not as a solo entrepreneur. When you become part of a franchise business, the franchisor acts as your mentor and will guide you through the process and help you stay on the right track to achieving your goals. By default, they have a vested interest in your success, and as such, they are committed to teaching you all that you need to know. At Stockdale & Leggo, my business leaders know that my phone is always on and that they are always welcome to contact me at any time if they are in need of some guidance. How many start-ups can say they have the same level of support?
They say that life is better when shared, but I believe the same is true in business. While the future of the entrepreneurial world certainly looks interesting, it doesn’t mean you have to go it alone. Franchising really does have so much to offer and could open up a whole new world of opportunities you might have never thought possible. Peter Thomas is the Chief Executive Officer of national real estate network Stockdale & Leggo and industry pioneer, credited with introducing the franchising model to the Victorian real estate industry in 1981, when he became the group’s first franchisee before acquiring the business in 1986 and growing it to 70 franchises across Victoria, New South Wales, Queensland and the Northern Territory.