I f your working capital is growing and there are options to expand your business. Here are some alternatives if you don't want to take the franchise route.
Source: Entrepreneur Magazine
- Expand your company network. Adding company-owned inits is capital intensive, but this allows you to keeping the quality of products and services of your brand consistent.
- Branchising. A modified way of managing stores, "branchising" happens when a company sells its units to investors, usually to employees, to generate capital. The new owners run the business, but the company receives service fees or royalties depending on the arrangement.
- Distributorship, dealership and licensing. Generally referring to the same method, these three systems allow individuals or companies to act as re-sellers of the product. The licensor retains control of the quality of the goods, as it continues to manufacture them.
- Area of development. Awarding business rights to a single entity, a company or an individual to establish a number of outlets in a region or country. This is a form of joint ventures or master franchising.
- Equity funds. If the goal is to raise funds but don't want to deal with franchisees, you may give up some equity and offer it to investors. This means giving up some degree of control as well. Look for cooperative investors, and manage your shares well to keep you in-charge of your company.
- Joint venture and limited partnership. It is an agreement made between companies, serving various functions. Whatever their purpose, partnership do have limitations, and complications, so carefully consider your options before entering into a partnership.
- Mergers and acquisitions. Merger involves two business organizations forming a bigger, unified entity, while an acquisition is about one company taking control of another M&A usually happen to take advantage of each others resources, from technology to manpower, and to achieve a stronger hold of the market.
- Initial public offering. An IPO increases a company's value in the market, as it shows that the brand is in good shape and willing to share it's profitability to the public. It also keeps the company on its toes, to continue innovating and earning for its shareholders.
- Diversification. Company tries to offer new products or services to new markets, entails a lot of risks. It may or may not work depending on the availability of resources to meet the assumed demand, market expectations, and how adaptive the company is in carrying out a new activities other than its existing ones.
- Alliances. May be formal or informal, one time or for long term. It could be as a simple as co-branding a new product or co-sponsoring a marketing campaign, but as long as the parties concerned seek and implement win-win solutions, situation, growth is certain for the business.
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