How Small Businesses Can Survive Smartly in Business!
Understanding and Understanding The Logic of The Market
When you think about establishing a new company, you will think “first of all, a profitable industry, a growth industry”.
And in order to determine what is a profitable or growing industry, it is necessary to collect useful information.
As you gather information, you’ll find specific industries based on various success stories and expert stories.
However, when such a story comes out, it is often too late to enter the industry.
That’s because it’s likely that a successful business is already crowded with people.
If all the people who enter the market are newly independent people, there is a way for coexistence and co-prosperity,
but such a market cannot be overlooked by large companies. It is very difficult to succeed in such a situation.
Needless to say, large companies with capital are overwhelmingly advantageous in terms of competition such as location and price.
Opportunities in The Gaps Between Large Companies
There are some areas in the business where it is difficult for large companies to enter. It is also called the gap industry.
The point is that large companies cannot make small turns. That is the aim.
The biggest attraction of a business can be that the assortment of specific products is second to none, that it specializes in services in a specific region, and that only such small business owners can do it. ..
It’s rare for an idea like this to come up right away, but it’s the same if you’re doing business in an existing industry. Let’s think about what it is
, to have something that can never be defeated, to have something that other companies can not imitate
, and to provide services unique to small businesses.
Advantages and Disadvantages of Joining A Franchise (FC)
Franchise businesses such as convenience stores are now affiliated with so many companies.
The biggest merit is that you can open a business without any experience or qualifications, and the risk is relatively low.
At the same time as the opening of the business, you can use the know-how, system, etc. as well as the name recognition of the franchise headquarters.
In addition, the
headquarters will do various things that require money and time, such as market research, product development, and advertising, so you can concentrate on the business itself.
On the other hand, the disadvantage is that there is little freedom. The discretionary powers of merchants are often limited, with
headquarters having the upper hand. If the management of the headquarters deteriorates, the affiliated stores will be affected, and if
other affiliated stores have a problem that causes the image to go down, they may be insulted.
Choose Your Franchise Carefully!
Which franchise you choose is a very important point.
First of all, is it properly managed? Is the idea sympathetic?
The first thing to do is to compare it to as many franchises as possible.
It is important to participate in fairs and seminars to gather information.
After narrowing down the candidates, you should carefully consider visiting the headquarters directly to hear the story and touring each member store.
Things To Check Before Signing A Contract
When signing a contract with the franchise headquarters, it is a good idea to read the “Legal Disclosure Document” first.
You can know even the most detailed contents. This is stipulated by the Small and Medium-sized Retail Commercial Promotion Law.
If you have any questions, ask more questions and ask for answers. Make sure to check the contents carefully and make a contract after you are satisfied.
The items to be disclosed in advance are as follows.
- About the outline of the headquarters … Shareholders, subsidiaries, financial results for the last three years, number of stores, number of proceedings, etc.
- Matters such as special obligations imposed on members … Store exteriors and interiors, etc.
- Whether or not there is a territory right … Restrictions on sales around member stores
- Whether or not there is an obligation to avoid competition … Regarding restrictions on business in the same industry
- Confidentiality or not … Restrictions on information disclosure learned from the business
- How to calculate loyalty
- Conditions related to transactions of goods, raw materials, etc.
- Contract period, renewal conditions, contract conditions, penalties, etc.
- Obligations that arise in the event of a breach of contract … Penalties, etc.
Of these, the most important thing to pay attention to is the item related to loyalty.
Is the calculation method different for each company as a percentage of net income after deducting expenses?
Is it a percentage of sales or gross profit? It is very important to confirm them in advance.
This is the item that is most troublesome, so be sure to check it carefully.
After narrowing down the candidates, you should carefully consider visiting the headquarters directly to hear the story and touring each member store.
