What are the advantages of buying a business-to-business franchise?

John Pratt writes:

There may be none if you’re not suited to dealing with businesses.

Many people like the regular contact with consumers because it makes business interesting. For others, however, having a large number of customers or supplying products or services of relatively low value is an administrative and financial nightmare. For them, their strength may well lie in efficient management rather than their sales skills, so having a business-to-business franchise is likely to be more attractive.

Business clients will generally place larger orders, but will expect an efficient machine to satisfy those orders. In other words, regular, timely and efficient invoicing is essential and ensuring orders are delivered on time must also be achieved, as business customers are unlikely to allow too many mistakes to be made before they move on.

The other challenge is that because orders are likely to be for a larger amount than when dealing with consumers, ensuring a positive cash flow by making sure that payment is received on time is essential and, of course, a failure of a customer or its inability to make payments could have a very substantial negative impact on a franchisee’s business.

In a nutshell, there are undoubtedly positives in having a business-to-business franchise, but there are also negatives.

John Pratt is senior partner at specialist franchise firm Hamilton Pratt and has advised franchisors for over 25 years.