- Franchisee puts a sum of money to buy the right to trade under the franchisor's name.
- royalty annual fees for the franchisor
- training and support for the franchisee is availiable
ADS for Franchisee
its an already known business
training and support given
theres 'less risk'
cheaper than setting up own business
DISADS for Franchises
responsibles for debts
not your own business
lack of freedom
- introduction (basic details)
-business idea (whats the proposition going to be)
-management & personal (role of management)
-the marketing plan (USP, demand, potential consumers)
-production plan (day-to-day activities, suppliers, raw material)
-financial plan(costs, revs, cash flow, budgets rent, invoices, business cards etc)
- Provides focus
- Logical structure
- helps test financially
- Time consuming
- long enough for a purpose
- not to over optimistic
Primary research -involves the collection of data that does not already exist (field research)
Secondary research - Market research that already exists
Quantitative research - research that includes numeric data - statistics
Qualitative data - research that includes words - interviews etc
random -total population has a chance of being picked
stratified random -interested in particular market segments eg, females in their 20's
quota sampling - exact sample proportions in market segments (not random)
Factors influencing sampling methods
the nature of the product
the risk involved
the target market
Ads of market research
helps to identify the wants and needs of customers
allows the business to design & vary its marketing mix
swifter response to changes in customer needs
spot a 'gap in the market'
wasted/ failed products can be reduced
can produce irrelevant information
not 100% accuracy
not respondents true view
secondary data can be out of date.
factors influencing demand:
tastes & fashion
social and demographic
Types of markets
Physical market -bring together buyers and sellers of particular items e.g. sugar canes, beet.
National market -buying on behalf of the country e.g. education, health
Local market -buyer & seller exists and bought together within a small area e.g. hairdressing, pubs, off licenses.
Electronic - linked by some form of electronic infrastructure enables them to engage in trade, e.g. Ebay, amazon
-Easy to set up
-keep all the profits
- own boss
-limited access to capital
-pressure of responsibility
-lack of continuity
-Extra finance capital
-limited access to capital
Sources of finance
Ordinary share capital - sale of shares in the business. This allows them to raise large sums of money. But the cost of planning and implementing a share issue can be expensive, and time consuming.
Bank Loan - banks want to know the risks involved, repaid on a monthly basis over a number of years, it can be medium - long term and incurs high interest charges - either fixed or variable, easy to access but banks want security so assets maybe be used.
Overdraft - Short term bank loan, able to account more money than it has deposited, used as cover cash shortages, interest is paid only when the account is overdrawn, flexibility, high rate interest.
Venture capitalists - finance providers, invest in smaller, very risky businesses, early stage of a enterprise, share ownership in business