B2B Franchise UK – the TOP 10 MUST KNOWS about finding and running successful UK B2B Franchises.
B2B Franchises have grown parallelly with the expanding entrepreneurial economy in the UK. Here’s our overview of B2B Franchise UK to help franchisees understand the landscape better.
The very fact that more and more people are willing to ‘invest’ actively in businesses instead of simply passing the baton over to their asset managers, banks or mutual funds is a great testament to the ‘entrepreneurial revolution’ that our economy has been going through for quite some time now.
The reasons for this may be far and varied – but the results are unmissably clear and evident. Today, getting the most out of your savings is all about taking part in this entrepreneurial saga. That, however, sounds far easier than it actually is.
Setting up a business is no mean feat. When you have to start everything from the scratch, things can get very overwhelming, very fast. All these factors have contributed to franchising becoming the go-to business model for rookie investors and seasoned businesses alike. Moreover, the healthy growth rate of independent businesses and SMEs means that B2B Franchise UK now have a platform that is stronger, wider and more accommodating than any other.
In this article, we’ll briefly see what has been driving the success of B2B franchises UK and how you – as a franchisee – can take advantage of this trend. This will be followed by a quick look at some of the most popular UK B2B franchises.
B2B Franchise UK – What the Numbers Tell Us
As we argued earlier, the overall business landscape is the most important metric behind the success of B2B franchises UK. Let’s try to put this argument in a numerical context.
- Since 2000, the number of privately registered businesses in the UK has been on the rise.
- In going from 5 million in 2000 to 5.7 million in 2018, the growth rate of businesses in the UK has been stronger than ever before.
- At the same time, the number of businesses ‘dying’ down in the first 3 years has gone down.
- The upward trend came to a halt in 2018. The number of UK businesses actually went down by about 27,000 in 2018 from 2017, thanks – no doubt – to the Brexit turmoil.
- The said downward trend, as experts believe, is expected to correct itself once various sectors regain their footing in the next couple of years.
- Over 99% of private businesses in the UK are micro, small or medium sized. These also happen to be the businesses that B2Bs have as customers – a great sign for anyone wanting to invest in UK B2B franchises.
- Over the last ten years, B2Bs in the UK have comfortably outpaced B2Cs in terms of growth rate and profitability.
- B2B franchises UK are among the most favoured franchises for first-time investors.
Running a B2B Franchise UK essentially boils down to making the most of these business trends and creating a well-rounded setup that addresses the needs of businesses in your territory of operation.
Competitive Advantages and Benefits of Running A B2B Franchise
Throughout our UK franchising blog, we have elaborated at length – on many occasions – that surviving as a franchise business is all about getting your market research on point. If you aren’t aware of the real state of the market you want to operate in, you are always going to struggle.
In that sense, taking an overview of the competitive advantages that are inherent to B2B franchises UK is greatly helpful. Here are a few to give you an idea.
High Customer Value
If you have ever run a business, you’d know that one of the most important factors that affect the profitability of a business is the lifetime value of customers. In the long run, this number has the potential to not only determine the profitability but also to decide the feasibility of various business operations like marketing and HR.
This also happens to be a point at which B2B franchises UK tend to do much better than their B2C counterparts.
It’s a well-known business fact that B2Bs need fewer customers in order to achieve the same level of profitability as a B2C of similar size. In other words, a B2B franchise can enjoy higher lifetime customer value.
This leads us to the next point.
Lower Customer Acquisition Costs
As an extension of this argument, it’s not too difficult to see that B2B franchises UK enjoy much better performance metrics then their B2C counterparts when it comes to acquiring customers. Since B2B franchises do not have to acquire the same number of customers as B2C franchises in order to book similar profits, they can often succeed in driving the effective customer acquisition cost much, much lower.
This, in terms of long term entrepreneurial success, a great comparative advantage to have on your side.
Better Targetted Marketing Efforts
Another advantage that B2B franchises UK have on their side is the ability to design and run flexible marketing campaigns.
Marketing for a B2B franchise is a whole different ball game when compared to a regular retail business. B2B franchises UK can afford to engage themselves in highly targeted online and offline marketing campaigns that can yield incredibly rewarding results.
New-age marketing solutions like social media marketing and industry specific PPC campaigns are also among the factors that have made B2B marketing enormously more profitable than it ever has been. This, no doubt, plays a part in further driving down the customer acquisition cost.
Flexibility of Services
UK B2B franchises – or any B2B for that matter – has the luxury to build a flexible, customisable portfolio of services that can be tweaked and fine-tuned to address the customer’s needs. What this means is that B2B franchises UK can hope to retain valuable customers for longer period of time, creating an ecosystem in which customers not only value their services but also offer their continued loyalty.
Running a B2B franchise essentially means catering to customers that usually have large scale requirements. Quite obviously, to fulfil these a business needs to be able to ace their sourcing and procurement strategies.
By teaming up with a franchisor who already is an industry veteran, franchisees can benefit from low sourcing and procurement expenses.
Recommended: The Many Benefits of Franchising
Business to Business Franchises UK – Important Types
There exist multiple types of B2B franchises UK. Since we cannot discuss all of them right here in this post, we will try to organise the important ones in two broad categories.
Product Based B2B Franchises UK
Product based B2B franchises are traditional businesses that have other businesses as the paying customers for their products. Depending on the franchisor’s business model, there can be further offshoots in this category.
A very common example of product based B2B franchises UK is a typical software franchise.
Essentially a product-based franchise unit is supposed to act as the local representative and distributor of the franchisor business. The profits for the franchisee are derived from the commissions made from each sale and/or referrals.
Service Based UK B2B franchises
Service based UK B2B franchises are service provider businesses that combine the franchisor’s business model with the franchisee’s expertise and experience.
Service based B2B franchises need to be more proactive in regard with networking and marketing efforts than their product-based counterparts.
Good examples of service based B2B franchises are financial Service franchise. If you wish to learn more about these, head over to our financial service franchises blog post.
How Much Does A B2B Franchise UK Cost?
While we have been able to provide fairly accurate estimates and franchise fee ranges for most sectors, we will refrain from quoting a certain figure for B2B franchises UK.
This is largely due to the fact that B2B franchises cover nearly every industry and touch upon every business sector. Right from highly specialised technology solutions to broad, market-wide services and products, UK B2B franchises have it all.
Interestingly, we can device a correlation between the minimum initial investment and the size of businesses served. For B2B franchises that cater to micro and small businesses, the minimum initial investment typically ranges from £15,000 to £50,000.
On the other hand, UK B2B franchises that have medium and large sized businesses as their customers need to shell out upwards of £75,000 in minimum initial investment to set up shop.
In addition to the client l size and industry, the minimum initial investment also is a function of the territory served and other incidental and/or operational expenses.
The brand value of the franchisor also has a massive impact on the amount you need to put up in order to buy a franchise unit from them.
Is It Possible to Run A B2B Franchise From Home?
The idea of running a business from home is undeniably tempting. Who wouldn’t, after all, like to make a living on their own terms?
As far as B2B franchises UK go, this, however, isn’t a simple proposition. Even though running a business from home means that you can afford the luxury of working on your own schedule, it isn’t something that business models of most B2Bs can agree with.
There are, of course, exceptions to this and we have seen many successful franchises that are based entirely on servicing other businesses as home based franchised units.
A great example of this is a typical B2B audit business. By setting up a home office, franchises can, in such cases, onboard businesses without worrying about the scalability problems.
B2B Franchise UK – Choosing The Right Franchisor
Choosing the right franchisor is an exercise that’s best performed in a systematic and purposeful way. The most common mistake franchises make while choosing their franchisor and getting into a franchise agreement is putting too much trust into hearsay and buying too soon into the franchisor’s marketing ploy.
The right way to choose the right franchisor involves combining three important factors:
- The brand value and the industry standing of the franchisor
- The market research and territorial economics
- Your interests, passions and experience
We have already discussed a detailed methodology for this in our How to Choose a Franchisor guide.
Top B2B Franchises UK – A Short Summary
To give our readers an idea about what some of the most popular UK B2B franchises have to offer, we have compiled a short list that spans across various industries, budgets and USPs.
- Minimum Initial Investment: £20,000 (plus VAT)
- Industry: Commercial cleaning
- USP: After build cleaning services for construction projects
- Ongoing support
- Use of trademarked services and accreditations
- Business support
- Exclusive Territories
- Provisional BFA Member
- Minimum Initial Investment: £20,000 (plus VAT)
- Industry: Foods and beverages
- USP: Vending machines solutions for SMEs
- Launch assistance
- Offers initial inventory
- Top of the line equipment and vending machines
- Full training
- Technical and sales support
- Associate BFA Member
- Minimum Initial Investment: £14,995 (plus VAT)
- Industry: Business consultancy
- USP: Cost reduction solutions and consultations for businesses
- Full training
- Launch and marketing support
- Minimum Initial Investment: £147,000 (plus VAT)
- Industry: Construction
- USP: World-leaders in construction site photography, videography and monitoring solutions
- Thorough business knowledge and expertise sharing
- End to end software and technology support
- Proven business model
- 15+ years in operation
- Minimum Initial Investment: £25,000 (plus VAT)
- Industry: Communications
- USP: On-site visual communications and signs for businesses
- 650+ franchise units in operation
- Present in 10 countries
- Protected territories
- Dedicated business consultants
- Full training
- Marketing support
- Full BFA Member
B2B and Business Franchises UK – The Takeaways
- Choose your industry carefully, and franchisor diligently.
- Get a solid grip on your numbers.
- Make sure you’re the right fit – B2Bs often require you to have a special set of communication and networking skills.
- Don’t discount your competition.
- Go with a future-proof business model.
- Put your marketing pounds to the right use.
If you run a B2B franchise and want to share your insights with our readers, we’d be thrilled to hear from you. Just send in your comments and whenever possible, we’ll try our best to feature them on our website.