Business-services franchises are taking care of business

Come rain or shine, one thing that can be counted on is that there will be a market for business-services brands, whether they’re offering accounting, reducing expenses, providing training or coaching companies. According to The UK Consulting Market in 2017 report published by Source Global Research, UK consulting grew 6.6% in 2014 and 8.4% in 2015; even against the grim financial realities of the UK attempting to negotiate its departure from the EU, the industry grew 7.5% last year. Evidently business services are going from strength to strength at the moment and it seems franchises are getting in on the act.

One of the reasons we’re seeing such a spike in the demand for business services is the fact that modern CEOs and founders seem to be becoming increasingly comfortable asking others for help. “People are more used to going externally outside of the company,” says Shaun Thomson, CEO and founder of Sandler Training, the sales, management and leadership training franchise. “It’s not a failure to bring somebody else in: in fact that can really help give you a fresh perspective.” And having someone external keeping an eye on what’s coming up ahead can prove invaluable: in an era when a business can go from fortune to failure in a matter of 18 months, companies are increasingly concerned with being prepared for the shifting expectations of the market. “It’s an area we talk about to our clients: ‘Are you keeping on trend so you’re making sure that you’re still relevant and current? Are you changing what you do?'” Thomson says. “The marketplace is changing so much the whole time that even if something was successful five years ago, people may have moved on.”

Another factor fuelling the rapid rise of business-services franchises is the huge availability of talent, thanks in no small part to the steady stream of skilled personnel making a break from the financial sector. “A lot of people who are looking to get into business services are ex-corporate types looking to launch their first company,” says Vic Ciuffetelli, CEO of ActionCOACH, the business-coaching franchise. “The skill set that they have obtained over the years in their corporate positions lends itself very nicely to a business-services franchise.”

And while some suits escaping the City may relish the opportunity to serve up sliders or whip up some thickshakes, many leaving the corporate arena are searching for greater autonomy rather than looking to break into a whole new industry. “While they might think ‘I don’t ever want to do that again’, actually quite often that attitude is explained by a disillusionment with their previous job,” says Neil Apter, marketing manager of Expense Reduction Analysts UK & Ireland, the purchasing consultancy franchise. “It’s not about never wanting to be involved in the industry again; it’s about wanting to change the parameters of the game a little.” By allowing those leaving the corporate life behind to plug their skills into a pre-existing system, business-services franchising offers an easy way for those with the experience to strike out on their own without facing some of the trials and tribulations that come with building a business from scratch. “Business services allow these people to throw off the shackles of the corporate life but not throw away all of the experience they’ve gained,” Apter says. “Instead we teach them to harness experience but to utilise that for their own ends, rather than those of their employer.”

But it’s easy to focus too heavily on skill sets: in fact, one of the biggest factors that will dictate a franchisee’s success in the services sector is actually mindset. “Within the business services industry, the client buys the person first,” Thomson says. “Because they’re really thinking to themselves: ‘Can this individual help my business? Can I put them in front of the financial director?'” While knowing the ins and outs of how to train staff or slash expenses can be helpful, this actually isn’t necessarily as desirable as being able to stick with a business when times are hard or instilling confidence in its clientele. “It’s a question of both the soft skills like communication and what I would call presence: will the client see them being able to hold their own and become that trusted advisor?” explains Thomson.

Part of the reason aptitude and attitude are so critical to service-based industries is the fact that, in the absence of standardised merchandise or produce, the way a brand is judged rests exclusively on the franchisees’ shoulders. “In fast food, the product is the pizza or the hamburger,” says Ciuffetelli. “In business services, you are the product: people are buying you and your confidence.” This means that the training a business-services franchisor provides not only needs to cover its core business system but also requires a strong focus on how franchisees sell and promote themselves. And this is far from something franchises can just set and forget: training should be viewed as an ongoing, regular commitment. “Franchises in other sectors may have initial training, then once a year have a general conference and that’s often it,” Ciuffetelli says. “Whereas in business services the train of thought is very much that you should do it regularly.”

However, even with an established brand and comprehensive training programme backing them up, new franchisees have to face some stiff competition. Traditionally, business services are the stalking grounds of big beasts like PwC, EY, KPMG and Deloitte, which would make the sector seem like an odd ecosystem for franchises to try to gain a foothold in. “It is difficult to compete with those guys on the same playing field,” says Apter. “The resources and the budgets that they’ve got to throw around are substantially different to ours.” But these businesses’ size means they also have big appetites: having long had their sights trained on large corporates, the big four have traditionally neglected the SME space, allowing agile franchises to easily get their teeth into a huge market. “PwC or Deloitte are pitched at larger international conglomerates that have turnovers of £150m and up,” he says. “We’re an organisation that’s pitched at SMEs: our sweet spot tends to be between £5m and £100m turnover.”

But though there is more than enough demand for business services to go around, there is another hurdle for the industry to overcome. “The barrier to entry is quite high,” says Apter. “Most of the business franchises are fairly expensive and they require a degree of startup capital because a lot of the time it can take a while to land clients and get paid.” Inevitably this skews the kinds of talent that business-services franchises attract, making it harder to draw in new blood. “On the one hand, we’ve got very highly experienced people coming into the franchise with a 25- or 30-year career behind them but on the other they’ve only ten or 15 years of work left,” Apter says. “I would much rather see a few younger, hungrier business people getting into organisations.”

Even so, the future is evidently bright for business-service franchises.