Case Study On Bespoke Threads: To Franchise Or Not To Franchise?

Expanding the Business via Franchising

The world is changing rapidly today and so is the business. The developments across a wide range of factors have a great effect on the entire industry (Goldin and Katz 2018). There are several businesses all around the world that is growing and developing in a way that they are setting examples for the rest others. On the other hand, there are other businesses that are deteriorating and the world is witnessing their fall over a passage of time.

However, this paper will elaborate on a case study of Alison and her business named Bespoke Threads. It shall assess the rise of her own business and how she is conducting the same. With the same, the paper shall provide further recommendation for operating her business. It shall also shed light on some of the personal problems of growing the business further as well as assess whether or not, Alison is more likely to fall than a bespoke clothing business operating out of a shop.

Background

Alison belongs to a family of small business owners and has spent a large part of her career working for a large insurance company. However, later in her twenties she decided to stop working for other people and open her very own business. She named it as Bespoke Threads. One of her colleagues with whom she was working prior to opening her own business, too had joined her and they both started the business in partnership. Both of them looked towards different retail possibilities and after several ideas they proved to be very difficult and hence, they chose the idea of custom made clothing for the females. However, later on, both of them wrote a business plan for their business and then gained finance for the venture. Gradually their idea of bespoke clothing for the Australian women turned out to be effective. Furthermore, after witnessing the success of their company, both of them decided to take on a one more owner in order to help the business develop further. They offered their partnership to one of the persons they knew and this changed the business’s nature significantly. The new owner of the business used to look after the big budgets and buying materials that did not fit with the idea of bespoke clothing that the shop had operated on. Gradually, the original partner of Alison felt that Alison was selling her share and finally their partnership dissolved. Alison decided to operate the business working from home. Her business is growing well since then and now she does not want to hire any staff because for that, she would have to rent and expand the premises. She no longer could operate the business sitting at her home, and now, as she is married and has a young child, she did not want to waste much time of hers in getting stuck up in a shop for long hours. However, she also want to grow her business and therefore she is looking forward for the possibilities of franchising. 

Personal Problems of Growing the Business

Recommendation for operating her business

I think Alison should be expanding her business via franchising. It is to note that franchising refers to the method of expanding a business for a successful business that is looking forward to develop its network. Franchising helps a business to develop in both national as well as international boundaries by strengthening the brand (Di Pietro et al., 2018). Alison should be using this methods in order to expand its business. It would allow her to make use of the money of other people for growing the business and being less engaged in daily operations. With the same, it also provides a process for growing the business in shorter period of time. Franchising would let Alison to continue to grow and expand her business as long as there are regions available for it and there are people who want to purchase her products and receive her services (Siqueira, Priem and Parente 2015). Alison is a highly motivated women but have local expertise. With the same, Alison also do not have much staff in her business. Franchising too does not need much staff for the operation. Furthermore, Alison would then have a competitive advantage as she already have a brand along with a positioning statement as well as a proposition (Dant et al., 2016). However, it is to note that one of the largest benefit that Alison would be getting via franchising is that of the franchise’s brand (Hoffman, Munemo and Watson 2016). The branding of franchise benefits a business as an advantage before and after the owner invest, notwithstanding its level of operation- national or international. As Alison does not have much number of staffs working in her business and no partner as well, franchising would help her during the problems. It is franchising that gives the franchisees an avenue for technical support as well as the qualified staffs who could give the best advice (Christodoulides, Cadogan and Veloutsou 2015). It would also offer Alison purchasing efficiencies by means of economies of the scale. Each of the required products would be offered by the trusted suppliers or by the franchisor himself. The franchisees could often take the advantage of heavy discounts too. Furthermore, it is also to state that the franchising offers the business owners a good mixture of the personal management responsibility under a well-established business model (Dant et al., 2016). Although, Alison should keep in mind that success is not guaranteed simply for the use of a business plan which is proved to work for other. Hard work is of utmost importance (Jell-Ojobor and Windsperger 2017). Without hard work it is not possible for Alison to grow her small business and expand it further.

Likelihood of Failure Compared to a Shop-Based Business

Personal problems of growing the business further

Alison is now a married women and has a young son who is in primary school. As a mother she needs to give sufficient time towards her son and family as well. Working from home, unlike earlier, suits her family life style. She no longer has to stick up in her shop in the CBD for long period of time. She now can give enough of her time to both her business as well as her family. Growing the business further would definitely make Alison face numerous challenges and she no longer could give enough time to her family. She would have to give most of her time to her business outside of her home. Expansion of the business would keep her busier all day long, especially in the initial stage of the expanded business (Wong, Holmes and Schaper 2018). With the same, she also does not have enough staff or any business partner who would take this responsibility in place of her. Hence, she would have to do the entire thing all by herself. It is also to note that her son is in a growing stage. He is still not grown enough to do all his work by himself. Appointing or hiring a maid too is not always fruitful and safe. 

Is Alison is more likely to fall than a bespoke clothing business operating out of a shop?

Yes, Alison is more likely to fall than a bespoke clothing business operating out of a shop. This is due to the fact that a growing business faces a huge range of challenges. As it grows, there is rise of different opportunities and problems that demand different solutions. It is to mention that it is not necessary that the things that worked a year ago will work with the same efficiency now. Operating her business out of a shop would bring in many challenges for Alison. The first and the foremost would be keeping up with the present market. It is significant to note that the conditions of business change continuously (Yun, Jung and Yang 2015). Hence, the market research should also be consistent and continuous in nature. Or else one would run the risk of narking the business related decisions depending on the outdated information and data that could lead the business towards failure. The more successful Alison become, the more of its competitors would notice and react to. It is also to note that a market leading offer might be of no better than an average after the passage of few months that it is one day. Moreover, the loyal customers of Alison who used to purchase her products and services only could be very quick to find the alternatives then who would provide them with better deals and pricing policy. After all, it is customer nature to tend towards low pricing objects with equal or better quality. As the age of the products, the growth of sales as well as the profit margins get squeezed (Venkataraman, Summers and Venkataraman 2017). For Alison, understanding where she is in their lifecycles could help her work out in the process of maximising the entire profitability. With the same, she also requirement to invest in the process of innovation for building a stream of profitable and innovative products in the market. Furthermore, the published information could supply some beneficial insights into the market trends and conditions (Gandomi and Haider 2015). As one of the growing business, Alison’s own experience could be even more valuable for her business. She should be capable of building up in-depth picture of what the customers need and how they behave and to decide which of the market approaches would work the best for her business. Taking the time for talking to the important customers pay off would be beneficial to some extent. The suppliers of Alison could be one of the very crucial sources of market information for her. She should motivate them to share what they know regarding the customer natures as well as the market. 

Conclusion

Furthermore, Alison also needs to keep this in mind that as she is planning to expand its business from a small scale, her strategy too needs to evolve in order to suit with her changed circumstances. Her focus should be on building up of profitable relationship as well as increasing the growth with the prevailing customers instead of winning new customers. The already prevailing business relationships have significantly higher potential for the profit and at the same time it could also give some reliable cash flow. Although the newer relationships might maximise the turnover but the profit margins might be very low and that might not be sustainable (Meiseberg and Dant 2015). Furthermore, it is of utmost importance for each and every businesses to be alert to the new opportunities. There are some really obvious risks of relying solely on the prevailing customers. Such risks would spread if Alison plan to diversify her customer base. Following up the very same business model but bigger is not the only way of growing and expanding (Vomberg, Homburg and Bornemann 2015). There are some strategic options like franchising and outsourcing which might provide better growing opportunities for Alison. Although Alison is thinking of franchising its business. One of the other risks include of cash flow and that of financial management. A good cash flow is very important for each and every business, whether it be a small scale or a large scale (Good et al., 2016). For any growing business like Alison’s, it is very crucial because it is the biggest factor that have the potential to limit the growth as well as the overtrading could be very fatal. Alison should make the best use of her finances as this is the significant element in the business planning as well as for assessing the new opportunities. In todays’ market the trend of effective supplier management and stock control have become highly important for the growth of the business (Wang et al. 2016). Hence, holdings of the stocks that are obsolete in nature would become an issue which needs a periodical clean up. Planning for the same would help Alison in anticipating her financial needs as well as arranging the suitable funding. Moreover, complacency could be one of the major threats of a growing business. Alison needs to be completely committed to her strategy and motive even it takes her out of her comfort zone. She could never give the exact time to her family and son like the way she is giving them now. After the expansion of the business, she needs to be wholly committed to it in every possible way, or else she would end up in failure.   

Conclusion

Hence, from the above discussion it is clear that after the end of the partnership of Alison, her business have not run in a complete loss. It has not yet failed and Alison is successfully operating the business sitting at her home. However, at present she wants to expand her business and for that purpose, she is looking forward for the possibilities of franchising. Franchising could be very beneficial for her business growth in every way if she is ready to commit completely towards her business. There are also several personal challenges that Alison would face after the expansion of her business out in the market. She could no longer give time to her family in the way that she is actually giving right now. With the same, there is also a possibility of failure if she expands its business in the market. Hence, it is recommended that if Alison wants to see profit from her business and at the same time, if she want to dedicate herself towards her family as a mother and wife, she should continue operating her business in the way she is doing at present, at least for the time being as her son is small now. She could expand her business later on after few years 

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