Matt O’Neil explores the current optimism experienced by business owners across the UK.
MAY-fever
It’s that time of the year when prospective franchisees, as well as existing ones, have the chance to explore franchise opportunities across a number of investment levels and business sectors. This must mean the season of UK franchise exhibitions has already begun. Whether you are looking for an owner-operator business, a management franchise or a multi-unit franchise, then a franchise exhibition is generally a useful place to start.
Not only will you have the opportunity to speak face-to-face with a franchisor, and perhaps some of their franchisees, there are also many useful seminars you can attend. At the very least you will be able to soak up the practical advice and inspiration available at one of these exhibitions.
MAY-hem
But before we get swept along with MAY-fever, you may be asking: ‘Is this really a good time to invest in my own business?’ The employment market is reasonably strong; the fallout from Brexit has not yet come to a halt; Covid has created problems of its own; and now there is the conflict and tragedy currently unfolding in Ukraine. The last three of these issues have all contributed to create a cost of living crisis.
Therefore, you may be asking: Should I sit tight in my salaried job until things blow over? Is this the correct time to be risk adverse and temporarily shelve any big investment plans?
However, this does not appear to be the current trend. According to research by SME Loans, records show that 66% of the UK workforce would like to start their own business. This same research highlighted that more than one-third of UK workers dislike their current employment. And around 33% want flexible working and the opportunity to work more from home. Some 55% of those consulted remarked that they would seek alternative employment, if the opportunity to work remotely was removed.
Definitely MAY-be
In 2021, Britain’s economy grew by 7.5% – despite the pandemic. But the year also witnessed one of the worst periods of trading ever experienced by companies. And yet, a record 319,000 new businesses were registered in the UK. This brought the overall total of UK SMEs to a staggering 5.5m.
This shows there is a fine balance between caution and missed opportunity, and only you yourself can truly decide on what route to take. Franchisors and franchisees are usually very resilient. They became more resourceful, despite ever-changing supply chain issues, or changes to work patterns, or new laws coming into force regarding health and safety. They developed new creative strategies for keeping their businesses going. They adapted to restrictions unleashed upon them and found a successful way to trade.
During the final quarter of 2021, compared to the same period 12 months earlier, over
56% of SMEs reported a rise in earnings. Many of these companies were franchises. For 2022, UK SMEs are forecasting further increases in revenue, while industry leaders are predicting that their businesses will grow significantly throughout the year. While it is clear that small businesses will continue to experience challenges, such as rising costs, they will adapt and survive just like they have during the past 24 months.
MAY I help you?
So what do these statistics highlight? A recent survey suggested that three-quarters of SMEs are confident that their businesses are more robust than ever, and better equipped to deal with issues – such as a new pandemic – if this should ever happen again in the future.
Following Covid – which is still hanging about – sources suggest that we will witness an increased number of new hybrid business models. And this clearly demonstrates how business owners have adapted successfully to new, unexpected challenges, as already mentioned in this feature. The pandemic has taught us to innovate, and this creative instinct should help us all to have confidence to invest in versatile, proven business models going forward.
It MAY take time
My advice for budding new franchisees is not to rush into it. Take your time and do your homework. Ask the franchisor to explain how they assisted their franchisees during the pandemic. This will help you to understand the true level of support provided by business owners during difficult times, such as the current cost of living crisis.
And try to validate their comments and claims by speaking to as many of their franchisees as you can. They will tell you what it’s really like to be part of the brand when times are tough. This should give you a clear indication of how flexible their business model is, when waters get choppy. Hopefully, you will then have the confidence to invest in your chosen business.
I now recommend that you read my April column and, in particular, the four tips on what to look for when evaluating a franchise. This should help you in your search to find the ideal business model for you. MAY good franchising fortune come your way.
