This is the latest article published by Nick Strong at Select Your Franchise, friends of Coconut Creatives.

Enterprise Finance Guarantee or EFG has been released by the government to help the banks to fund small and medium size businesses. This is good news for everyone thinking about buying and building their own franchise business in the UK. EFG replaces the Small Firms Loan Guarantee scheme.

The Small Firms Loan Guarantee scheme capped lending to £250,000 and was very much focused on the small business. The government has identified that small and medium size business is in urgent need off access to capital at this time and has extended provision to medium size business as well as small.

Under the EFG scheme the government will guarantee 75% of any loans made, with the bank covering the remaining 25%. The guarantees will mean that the government, or taxpayers, will pick up three-quarters of the the tab for any bad loans.
In total, the Enterprise Finance Guarantee Scheme will see the Government provide £1 billion of guarantees to support £1.3 billion of bank lending.

At a recent British Franchise Association (BFA) forum of franchisors and franchise suppliers Launa Smith of HSBC franchise department shared the following information about the government’s new Enterprise Finance Guarantee scheme.
The Enterprise Finance Guarantee scheme could be the right solution for you if you are a business customer:
looking to increase your working capital
looking to start up, expand or diversify your business
Key features and benefits of the Enterprise Finance Guarantee scheme are that it is:
a government guarantee which secures bank loans to any viable business with a sound borrowing proposal
available for sums of £10,000 to £1,000,000 – a £10,000 minimum is available to limited companies and a £25,000 minimum is available to sole traders and partnerships excluding LLPs.

The loan can be repaid over any period between three months and ten years, individually negotiated interest rates choice of fixed and varied interest rates a quarterly premium is payable to the Department for Business, Enterprise and Regulatory Reform (BERR).  The guarantee covers 75% of each qualifying loan. But for whom is the Enterprise Finance Guarantee (EFG) scheme available?

The EFG is available for you if your business has an annual turnover of less than £25,000,000. Your business must trade and be based in the UK. Your main business activity must be in a sector approved by the BERR and the purpose of the loan must meet the BERR’s eligibility criteria, for example:
starting trading – new start up funding carries a 1.5% premium
developing a project
expanding an existing business
purchase of equipment
business will not exceed the European Community State Aid maximum, as a result of taking out an Enterprise Finance Guarantee scheme.

The key objective of the EFG is to help provide liquidity and business development capital to existing viable companies. A comprehensive business plan is required when applying for an EFG loan via the banks.

If a company already has a Small Loan Guarantee they can still quality for a EFG loan.
All loans are subject to status. Terms and conditions apply.
For more information have a look at www.hsbc.co.uk/business and www.businesslink.gov.uk/realhelp.
To research business format franchise opportunities in the UK visit www.SelectYourFranchise.co.uk and www.Business-Opportunities.net.

by Nick Strong, MD of www.SelectYourFranchise.com

Like in any sales cycle the franchise sales manager needs to understand the process of managing the buyer and the psychology of buyer. All franchise buyers are driven by aspiration and need. The balance will often be determined by the economy. In times of high employment and job stability buyer enquiries normally deliver high aspiration individuals. In times of economic uncertainty forced unemployment and redundancy often provides buyers who have find a new we carrier.

In both cases the buyer is motivated and looking for a better way forward for their working lives. This is especially so during times of a slowing economy. At such times hard working and productive people can loose their jobs though no fault of their own. When redundancy strikes the once loyal employee can move towards a future where their fait is in their own hands. Franchising offers just that opportunity.

When a buyer first approaches a franchise business he is usually looking for reasons to buy and move forward. The closer the buyer moves to the ‘close’ the more he will look for reasons not to buy. This is normal psychology. The cost and commitment required by the franchisee is huge. A franchisee may have to put his house on the line to buy the franchise so belief in the franchisor and their business system must be absolute.

This means that the franchise sales manager must treat the buyer with great dignity and respect. The sales manager must providing the buyer with clear information and support during the buying process. This will inform the buyer just how he expects to be supported should he become a trading franchisee. A good business system alone is not enough. The franchisee is a ‘disciple of the brand’ he invests his time, money and effort into. He must trust the franchisor and identify strongly with the system’s products, services and values.

The most important attributes in any successful franchisee are:
Enthusiasm
Hard working
Follower of the proven system

It is vital therefore that during the recruitment process the franchise sales manager has a clear path for the buyer to follow. The reason for this is to demonstrate that the buyer can follow a system effectively. Early failure or disagreements on behalf of the buyer should set alarm bells ringing for the franchise sales manager.

Selling a franchise is not like selling a product. It is more like the process that leads to a long term contractual commitment such as marriage. Both sides better make sure that they can and want to work together as separation after contract can be messy, time consuming and expensive.

When franchise sales is done well both seller and buyer can do very well. Franchise business added £13 billion to the UK’s GDP according the the Nat West BFA franchise survey of 2008. Franchise business grew five times that of the UK economy during the same period according to the report. This all happened because motivated franchisees followed the franchisors well developed business models enthusiastically and effectively.

Franchise business works for the franchisor, franchisee and their customers when they all believe in the system and in each other.

For all attendees to this year’s Franchise Marketing Conference, we are delighted to offer the opportunity for a one-to-one consultancy with one of our marketing specialists from Coconut Creatives on any aspect of your franchise marketing strategy.

* Have your current campaign assessed prior to attending the conference
* Receive 30 minutes of one-to-one targeted and personalised marketing advice
* Take your business to the next level by asking the experts your franchise marketing queries
* Find out if your marketing and franchise recruitment plan maximises both efficiency and effectiveness
* Gain real and achievable solutions to your marketing and franchise recruitment challenges

Session times:
09:45, 10:15, 11:35, 12:20, 14:10, 15:15, 16:00

For more information about the conference visit http://www.franchiseinfo.co.uk/fmc/consultancyclinic

Coconut Creatives have been invited to publish a range of articles in several magazines to respond to the increased interest that business people have in marketing.

Featured articles can be found in the national Making Money Magazine sold in Tescos and WH Smith, Start Your Business magazine also sold in WH Smith and independent retailers and the national Franchisor News magazine which serves the franchise industry.

“We are delighted to offer marketing features to complement the magazines existing articles and information,” says Coconut Creatives founder, Sarah Dyer. “We have been writing articles for the press and online sources for some time now and it is our pleasure to help spread the word about marketing through established and reputable magazines as well.”

Coconut Creatives Directors, Sarah Dyer and Christopher Cook also sit on the South West Regional Board for the Chartered Institute of Marketing and work tirelessly to help improve the awareness and standard of marketing practices UK-wide. “It is vital that a company’s marketing function starts from a strategic level so that it maps in with the direction of the business plan. Campaigns and promotions are then created to meet the objectives set out at this strategic level and we have found that our clients see and achieve much greater success by approaching marketing in this way,” explains Christopher.

For further information about Coconut Creatives contact Sarah or Chris on 01963 31030 or email helpme@coconutcreatives.co.uk.

Fair Trade Company Shared Earth has donated £10,000 for the creation of the first sustainable community centre in India. Managing Director Jeremy Piercy handed over the cheque to the John Lally International Foundation outside Shared Earth’s head office in York, which is to fund a new community centre in Goa.

John Lally was extremely active in the environmental movement before he died in his late 20’s. He persuaded the council to give over a disused landfill site as a conservation area, and helped to raise several hundred thousand pounds to set up the UK’s first eco community centre on the site. This now forms the template for the Goa project.

The new Goa centre in Moira, will be promoting environmental education, sustainability, community enterprise, recycling and agriculture for all the community and also includes a kindergarten. Using an old Portuguese-style house renovated to 21st century standards, the Centre will be carbon neutral forming a community base for environmental enterprises in agriculture, recycling, garbage collection and other small scale non-polluting industries.

Shared Earth actively campaign against the use of plastic bags with their jute bags made in India which boast a selection of logos such as ‘Reduce, Reuse, Recycle’, ‘Use me till me bottom wears out’ and ‘Say No to Plastic Bags’. They also backed the Daily Mail’s Banish the Bag campaign which also formed part of their PR plan undertaken by Coconut Creatives.

“Fair Trade is making such a difference,” explains Jeremy. “Critics are quick to question whether the Fairtrade logo is just another way of businesses to profit. We are ensuring that the profits of our fairly traded goods directly benefit those communities that require assistance and this Goa project is a classic example.”

I’m often asked about tactics which can fit into a marketing strategy, so this month’s tips focus on a few different ideas that can be done alongside your existing 2008 campaign.

Often the temptation is to focus all efforts on recruitment when in fact, your existing franchisee network is capable of much more than you think.

Franchisees at Exhibitions
Taking a franchisee to an exhibition with you gives two very clear messages to prospective franchisees. That you are happy for prospects to chat with an existing franchisee and that you have happy franchisees. So much time is spent on the lead up to an exhibition in the preparation of the stand, signing off final artwork and sorting last minute freebies to tempt prospects onto your stand. The best possible attraction that a franchisor can have on their stand is a real life franchisee (even if they wear a t-shirt saying “I’m a Franchisee”) the message will be strong, clear and powerful. So make sure you take a franchisee with you and get them talking to the visitors

Franchisee recruitment questions
Franchisees are the best possible advocate for your brand and franchise package. It has been proven that when prospects are given a chance to talk to or visit and existing franchisee, they ask better questions and therefore find out at an earlier stage if the franchise is for them. After all, the franchisee is doing the job that they hope to do. They will have many questions and will want to find out what it is like in their shoes. This may require some training and agreement from a particular franchisee and is well worth the effort.

Marketing collateral
Use your chosen franchisees on marketing materials, within press releases and on your website. People like to see people and their testimonials will aid your franchise success for the future. All franchisees should be encouraged to report on positive feedback, gain comments from their own customers and to take photos where possible. You never know when this material might come in handy saving time and money when a promotional opportunity requires such materials. However, be choosey on which materials you use as they must meet your brand standards and give the right message.

Research for future development
Your existing franchisees can offer valuable insights into the future development of the franchise package. A system for capturing their feedback on everything from initial training to newly launched products is essential for continual improvement to maintain a competitive advantage in the future.

Useful Tips
1. Try to build a bank of franchisee case studies which ideally cover several key market areas. Such market areas can include women in franchising or couples in franchising. This allows you to have marketing collateral at your disposal to target specific market segments.
2. Always take a franchisee when you attend events and exhibitions to recruit new franchisees
3. Ideally have a franchisee that is available for serious prospects to talk to.
4. Encourage a marketing focus within your network and reward your franchisees for offering customer case studies that you, as the franchisor, can use.

Shared Earth held its first ‘Discovery Day’ on Thursday 15 November, to introduce potential franchisees to Shared Earth and explain what is involved in its franchise package. Seven people attended from a variety of towns around the country and feedback was positive, with almost everyone wanting to progress to the next stage of undertaking detailed interviews and searches for specific suitable properties.

Coconut Creatives has been working with Shared Earth since September to create and manage the public relations launch of the franchise package. With very little advertising undertaken, the campaign has been hugely successful with national, regional and industry specific PR and Media interest being aparent. Since the launch of Shared Earth’s franchise scheme in October, over 70 people have expressed an interest, including two current wholesale customers who have approached Shared Earth to discuss the possibility of converting their shops into a Shared Earth franchise.

To prepare for the opening of the first franchise, Shared Earth is undertaking a major re-branding exercise in their existing 7 shops. A new green colour has been agreed for outside walls and windows, and all shop signs are to be unified, hopefully with the letters made by Fair Trade supplier Mitra Bali in Indonesia.

Recently, Jeremy Piercy founder of Shared Earth decided to offer his business as a franchise package. In this article he explains why Fair Trade is so important and why consumers everywhere are making the choice more and more often to buy Fair Trade Products.

Fair Trade is a way of making sure that the goods we buy have a positive effect on the world around us. The main aim of multinational companies is to maximise profit, and generally in the past they haven’t been too concerned about how they make it. There are still millions of children in the world who work long hours in sweatshops, and millions of people working in unsafe, unhygienic conditions to earn a wage which is insufficient to feed their families.

In Britain, laws were passed in the 19th century to make slavery, child labour and other abhorrent practices illegal. Large companies have realised they can transfer production to countries where such laws don’t exist, or where local officials can be bribed to ignore malpractice. Multinationals have enormous power – often more power than the governments of the countries they buy from. All we see is the colourful goods in our shops. How they’re made is hidden away, often on the other side of the world.

The Fair Trade movement is making the multinationals sit up and take notice! Millions of people are realising that there is more to life than just money and material possessions. They are starting to care about where the products they buy come from, whether people are being exploited in the process and whether they’re damaging the environment unnecessarily. Consumers are saying, “We have power too!”

Fair Trade ensures that producers are paid reasonable prices for their work; child labour is avoided; working conditions are decent and sustainable materials are used wherever possible. Fair Trade companies also pay sufficiently upfront on their orders so as to ensure that producers don’t end up in the hands of unscrupulous moneylenders. This often happens because the producers just cannot afford to buy the raw materials for production, or the seeds to plant the next year’s crops.

Fair Trade tries to help those at the bottom of society, those who are least well off – such as the disabled. It also tries to support communities, not just individuals, by refusing to bargain producers down to the lowest price. Fair Trade companies often enable enough profit to be made to pay for wells (fresh water), schools or the development of other community projects.

Sales of Fair Trade products are increasing substantially in all areas. And the reason for this? It has nothing to do with price. It’s simply that people like to feel they’re making the world a better place.

Written by Jeremy Piercy, Fair Trade pioneer and founder of Shared Earth.

For more information on Shared Earth go to http://www.coconutcreatives.co.uk/portfolio/ to read the case study or visit www.sharedearth.co.uk

Vicki Cunningham editor of Franchisor News recently invited Sarah Dyer, Marketing Specialist from Coconut Creatives Ltd to write a regular marketing feature within the Franchisor News magazine.

“I’m thrilled to be writing for the magazine,” says Sarah. “There are so many elements to marketing and franchised businesses can generate so much benefit from employing just a few of the tools that I will be explaining through the features.”

The magazine is full of franchisor examples and news from the industry. Vicki has ensured that the tone is light and the text large so that it is an easy yet informative read.

Watch out for the next quarterly addition which goes to print later this month and is available from the beginning of December.  For more information about the magazine go to www.franchisornews.co.uk

Guide your new franchisees through their first few months with step by step enabling tools.

New franchisees often require quite a bit of ‘hand holding’ and it is during these first few months that they go through their real learning curve. Often franchisees require specialist training to be able to run their franchise within the given market sector or industry. Marketing is almost always included as part of the training package through the operations manual. However, there is so much more that can be achieved once new franchisees understand their new business and have a few additional solid enabling tools, focused on marketing techniques, to assist them.  

Managing expectations through a marketing orientation

A big part of the process for franchisors is managing the expectations of their new franchisees (who are often eager to establish themselves and create a return on their investment). At this stage, marketing can play a key role to help focus their minds and keep them busy while setting some small achievable targets and objectives for them to aim towards.

Setting your standards through marketing

Every franchisor wants every new franchise sold to become a success. It has been proven that by setting franchisee standards through a specific 2 month launch marketing activity plan, you can significantly increase the chances of success and within a shorter time period. While this can be time consuming for the franchisor to create and implement, it can save a great deal of ‘fire fighting’ time later on. 

Dealing with the ups and the downs. Being sturdy, consistent and strong

As I am sure most franchisors have experienced, franchisees often go through a whole host of emotions over the first 6 – 12 months of running their franchise. The mere fact that often they have committed their life savings, changed their lifestyle and working relationships which often causes a shift in family relationships. It can be a very stressful time. Franchisors need to be the parent in the situation and create that focus for the franchisees to concentrate on. They also need to become the understanding agony aunt when things get tough but most of all, franchisors need to reflect (at every opportunity) a consistent and strong disposition during every dealing with any franchisee.  

Creating confidence through marketing

When marketing is done well, it creates a great confidence in franchisors from franchisees. Marketing should be used as a focusing tool of franchisors to help them keep control of not only their business and brand, but the whole host of people that have bought into their psyche and believe in the business model. 

The Four Steps to new franchisee success

1. Invest more time at the beginning in teaching new franchisees key marketing skills
2. Provide a tailored and specific two month marketing activity plan to help focus your new franchisee
3. Always remain sturdy and strong, giving your franchisees a consistent impression of their ‘leader’
4. Offer lots of encouragement and praise at every opportunity to keep new franchisees positively focused

The best possible tools that I have given franchisors is how they can teach their franchisees to look after themselves. In doing this, the franchisor deals with far less problems and far more confident, happy franchisees. By teaching your franchisees to market themselves, you give them the keys to their own success which in turn, also leads to yours.

Next feature; Using PR to Launch Your Franchise (very topical as we approach Octobers National Franchise Exhibition at the NEC in Birmingham!).