Mum working on her franchising

Franchising and Licensing – What’s it all about

Most people have heard of franchising and licensing but not everyone understands what the terms really mean and what the differences are. Both can offer opportunities to Mums who are looking to start a business.

Franchising and licensing are both ways for businesses to leverage their success. They do this by allowing other people to use the knowledge, branding, intellectual property or business model that they’ve developed. These methods can offer a route to expansion in businesses that are “local” by nature and so don’t lend themselves to national expansion.

Licensing takes quite a hands off approach. The licensor grants someone permission to use something, a design or intellectual property, for a set period. They don’t offer any on going support to the licensee and have no say in how the businesses are operated. Licensees usually have no limits to the area in which they run their businesses and don’t Pay management fees.

Franchising is more like running an independent branch of a business. Franchisees are usually granted the right to run the business in a specified territory, for a specific period of time. There is an initial payment to purchase the franchise (anything from a few hundred pounds to hundreds of thousands of pounds). This is then followed by an ongoing management fee, either a set amount or a percentage of sales. Franchisers retain much more control than licensors and franchisees are usually expected to run the business in a particular way. They often follow a manual, to ensure consistency across franchises. Franchisers will provide ongoing support for their franchisees to make sure that they are able to operate correctly. Franchisers also sometimes make additional money from franchisees by selling items that they use to run the busines. These might be branded merchandise that franchisees can sell on. Franchisees can usually sell on their franchise although the franchisor may include some limitations on this. They might insist on a certain amount of time running before it can be sold and will probably want to approve the buyer.

If you’d like to read more about Mums running franchises check out Claire’s story of running a Talking Tots franchise or my story about running a Mum2mum Market franchise. You could also have a look at our franchise business types for mums.

Both licensing and franchising offer a way in to business using something that has been tried and tested. Licensing can work well if there’s a great product or service that you want to bring to a market. Franchising allows you to start a business that you know has the potential to be successful along with getting some support to run it. You can find out more about franchising from The British Franchise Association.

If you’re trying to decide if a franchise business is right for you our course “Business for Mums: Finding the right idea for you” can help.

Franchising and licensing

 

Running a Business around Children with Additional Needs - running online business

Running an Online Business

The massive growth of the internet over the last 10 years has offered many online business opportunities. This is  especially true for those who need to work flexibly from home as mothers often do. In the early days you needed coding skills or the money to pay someone to code for you to be able to launch online. There are now hundreds of options to design your own website with no more than the basic computer skills. The flip side of this is that of course, low entry barriers can mean a saturated market. That means it’s more important than ever to have something that will set you apart from the competition.

Retail

One of the most popular types of online business is retail. Before the internet, mail order businesses had to invest a huge amount in national advertising in newspapers or on TV to make people aware of their Products’s. They then need to spend more money sending out catalogues which might or might not lead to a sale. Now people wishing to sell online can do so in a number of different ways. They can promote their products either for free or at a low cost via social media and email. If you want to sell products online you have two options.

The first option is to launch your own website. Great because you get to keep all of your profit, but harder to get seen by people. The website will need to be optimised to ensure that search engines can find it. An active social media presence is likely to be necessary, all of which takes time.  Love Anais is a great example of selling direct from a website.

The other option is to sell via an already established website. Many small businesses use eBay to sell their goods but Amazon also had a thriving community of self employed people selling their wares. You can also sell directly through social media. With shopify you can integrate a shop in to your Facebook page. If you make your own items then you can look at more creative outlets like Etsy or it’s more UK equivalent, Folksy.

The other question is, what are you going to sell? Fine if you make your own things but if not you’ll need to find some products. If you don’t have space to hold stock you might want to look at drop shipping. An arrangement where by you promote a product and take orders then a wholesaler ships the items. If you’ve got space to hold stock then you can buy your products from wholesalers (although bear in mind they are unlikely to give you credit in the early days). Check out wholesaler.co.uk to find a list of UK wholesalers. The other option would be to focus on one product and buy it direct from the manufacturer. This is great if you’ve seen a product overseas that you think would do well in the UK.

 

Information products

Another popular type of online business is the creation and selling of information products. These can be ebooks, ecourses or membership services that provide expertise of some kind. If you are an expert in your field information products can be a great way to leverage it. Once the product is created there is no limit to the number of people that it can be sold to. The work really comes with promoting the product so good social media skills are key. Cassie Farren’s story shows how she used her expertise to create an ebook.

Blogging

People with very specific interests run content focused websites or blogs for a particular niche (rare breed pigs, complementary therapies for rabbits). They make their money by selling advertising. While this type of business is unlikely to make your fortune it can be a nice way to try and earn something from the thing your passionate about. Subscription based deliveries, where a box of items on a particular theme is delivered to your house each month, are becoming more and more popular. Check out surprise boxes story about craft based boxes. There’s even one for sanitary products called “Sanitary owl”.

Services

Other online businesses provide services, such as web design or social media management, to clients and others create software or apps to provide a service. People with admin backgrounds often set up as virtual assistants to provide admin support for small businesses. Some professionals, such as counsellors, nutritionists and accountants, offer their services online via software like Skype.

The law

As with any business there are regulations that you need to be aware of. All businesses need to have some kind of liability insurance. You will also need to make sure you comply with the distance selling regulations if you are selling a product. The government provides a brief summary. There is also legislation around copyright, and data protection. You will need to comply with anti spam laws if you are creating a mailing list, The Law Donut provides a good summary of these.

For more ideas on internet based businesses check out out page of online business stories

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Running an online business