Service Industry Challenges – How to Step Beyond the Subjective Nature of the Industry

The service industry can be very subjective in nature due to the fact that you are trusting people to perform skills. Trust may not be the biggest issue, however value in the service can be perceived as very high or very low. A lot of that perception has to do with the individual selling the service. This can be a big hurdle to overcome.

Another challenge that faces the service industry is the idea that clients pay for a service or services based on the number of hours the task will take to be completed. In this model, the company is basing its services’ value on the number of hours to complete the work. It would seem that the scope of work should be based on the value that the services provide. While the company may determine the amount of hours to completion for time management and as an estimate, it should not be end price.

To get beyond this low profit margin income model, you as the owner and entrepreneur, must truly believe that your product and services are worth their asking price if not even more. That may sound outrageous, but to some consumers, they will trust companies, services and products that are at the higher end of the price spectrum because to them, they perceive more value in it. As you recognize the value that you have created in your products and services, it will start to come across in your sales pitches. Don’t stop it- that is your passion and drive speaking. That is what will get the sales. No need to be arrogant about the price, just focus on the value that your company is offering, how it will benefit and simplify the client’s life and how you can get started today.

Very simply, change your thoughts, increase your prices, and let your passion shine through. You may start to see a new market to tap that previously would have been out of reach. You may also discover that you were not charging enough for your services.

Food Service Franchise – Is a Franchise in the Food Service Industry Right for You?

Being in the restaurant business is never an easy road; just ask anyone who’s ever done it. For some people it has an addictive quality, and they cannot get enough of the fast pace, but this type of franchise is not for everyone.

If you have always enjoyed working with the public and being the person “in charge” behind the counter, then maybe a franchise in food service is right for you. To be successful with this type of franchise, you will need great communication skills, high energy, and a passion for owning your own business.

Why is a franchise in food service such a great idea right now?

According to the National Restaurant Association, the number of food service industry jobs in America will increase by 10% or more over the next decade. Most of this growth will be seen in the “franchise food service” category, particularly “fast casual” restaurants. Franchises like Chipotle, Baja Fresh, Cosi, Panera Bread and Peace a Pizza are cropping up in suburban shopping districts everywhere. They succeed by giving patrons more ambience and better food than a fast-food restaurant without the added expense of table service.

This promising new trend for franchise food service entrepreneurs has caught the attention of the restaurant industry as well, so expect to see more restaurants like this starting up over the next few years. It may seem surprising that any category of business could be growing this quickly during a recession, but the success of this type of franchise food service business has come at the expense of higher priced restaurants, who have suffered a decline in consumer spending.

Are you considering a new venture as a franchisee? Do you like the idea of starting a new business without the risk that comes from an unproven concept? Starting a franchise food service business may be the right option for you.

Organizational Culture – Service Industry

One of the most underrated aspects of making a business successful is the importance of the organizational culture. The culture is built on the shared values, beliefs, and principles of individuals within the organization. Instead of focusing on building a strong, sustainable culture, organizations are more concerned with cutting costs. The service industry is a prime example of this. I have worked in different facets of the service industry for the past five years and all the organizations I have worked for are structured the same way. They use labor, food, and bar costs as a barometer to measure how well the organization is operating. Management is judged by how well they are able to manage these costs.

How much total revenue the organization brings in seems to be almost irrelevant. The overall goal of the organization is to maximize profit. Lowering labor, food, and bar costs and maximizing profits do not go hand in hand. For example, a manager could decide to cut the number of employees working on a Saturday night in half. The manager could also order poor quality food in attempt to lower food cost. Meanwhile, the service and quality of the product suffer because of the structure put in place by the organization, so no one wants to patronize the organization, thus actually reducing profits. Organizations structured in this manner suffer from weak cultures. The organization’s goal, maximizing profits, and the management’s goal, lower costs, are not aligned, resulting in a large organizational performance gap. According to the article “Importance of Organization Culture”, building a strong organizational culture helps with many aspects of making a business successful including the following:

• Aligning individual and organizational goals
• Creating healthy competition amongst employees
• Helping create a positive brand image of the organization
• Creating a common platform allowing employees to perform at their best
• Helping unify employees from different backgrounds
• Promoting healthy relationships between employees
• Extracting the best out of each individual

A strong organizational culture conveys the goals, beliefs, ideas, and appropriate behaviors to individuals within an organization in order for the organization to achieve its goals (Gupta,2009). Poorly structured organizations in the service industry need to adapt by making changes to their culture. Changing the culture of an organization can be a very difficult task to accomplish. Leaders of the organization need to facilitate the change by evaluating ineffective strategies and recommending new strategies (Gupta,2009). The leaders must promote the cultural values of the organization by conveying these values to all individuals in the organization and encouraging socialization among employees. By developing a strong, sustainable culture, organizations will extract the best out of their employees, become more efficient, and increase profitability(Gupta,2009).

References

Gupta, A. (2009). “Changing Organizational Culture”. Practical Management Retrieved from
http://practical-management.com/Organization-Development/Changing-organizational-culture.html

“Importance of Organization Culture”. Management Study Guide. 2013. Retrieved from
http://managementstudyguide.com/importance-of-organization-culture.htm.

Cost Effective Business Services

A business services franchise is a good option for many who are willing to serve the corporate world. A business franchisee needs an investment in terms of fees, real estate, marketing, merchandise etc. there are both small business services as well as high cost businesses in the category. Here we discuss some prominent business services franchises.

Financial services: The financial services space is rapidly growing in India. It is one of the most significant business services in India. According to the latest Central Statistical Organisation (CSO) data, financial services, banking, insurance and real estate sectors have risen by 7.8 per cent in the third quarter of 2009-10. This displays the success of the financial service industry. With the over-all increase in the finance services seekers, finance service providers took to franchise route, thus creating a great scope for franchise opportunity.

Till a few years back, the franchising which was an unknown concept in this field has gained lot of momentum in the present times. Before discussing the factors responsible for this development, let us first get familiar with the term ‘Financial services franchisors’.

Financial services refer to services provided by the financial service companies. The finance service companies encompass a broad range of organisations that deal with money management. A few of these organisations include banks, insurance companies, consumer finance companies, stock brokerages, investment funds etc. These companies offer various services such as asset protection, investment and savings, retirement plans, customer-orientated service, besides offering personal loans, commercial loans, mortgage loans, and education loans for the aspiring students. Financial service providers are on the rise as franchising as a mode of expansion is being opted by this industry. Manish Shah, Associate Director- Business Strategy, Equity & Product Development, Motilal Oswal Securities Ltd shared, “The belief in entrepreneurship and the drive it brings to the business, made Motilal Oswal take the franchise route. Franchising brings more scalability to the business and the business becomes entrepreneur driven.”

Courier Services: Another category of business services is courier service. The companies basically work around transportation of goods from one place to another, delivery of documents, packages, and larger shipments of products. These provide services to companies and individuals who need rapid service, accountability, and tracking that regular mail does not accommodate. Courier services are more reliable and dependable as compared to ordinary postal services due to less time consumed and delivery guarantee. However, with the introduction of modern gadgets and faster modes of transportation this system has also progressed a lot. Moreover, franchising is also one of the main stimulants of its popularity and profitability.

Franchising in this sector has grown with more and more players taking the franchise model for reaching out to far flung areas in the vast nation. Courier service companies are required to deliever important mails and parcels to any part, whether city, town or village in the country. Therefore, franchising can be the best mode for guaranteed delivery of the items. According to DS Patel, Channel Head, DTDC, “Franchising is an essential and most effective way of expanding the network. Opening our own company owned courier offices is very expensive and time consuming. However a franchise outlet is economically beneficial to the company.” As informed by Praveen Govindraj, Assistant General Manager, First Flight Courier, “Franchising definitely helps in directly reaching to far-fling areas for delivering items due to our local partners in those areas.” He further added, “Franchising can be a win-win situation for both the franchisor and franchisees as both benefit from it. The local partner (franchisee) has a much better idea of a particular locality than the main company which is based out of Delhi or Mumbai. Delivering parcels to small towns and cities becomes difficult and also take a lot of time if it is done by the company in metropolitan areas. At such times the local franchisee can be of great help.” This can be the major reason for courier companies to opt for the franchise route. Moreover, having local partners all over the nation, who deliver all items on time, also increases the credibility and profit making of the parent company.

The typical feature of the courier service franchise includes doorstep booking, customer convenience and security of each and every consignment that has been entrusted to it. Jaguar Couriers Franchise, Blazeflash Couriers, etc are some of the franchising companies under this category.

Cartridge refilling: Cartridge refilling forms another business service category. In the modern age of I.T, there is a constantly growing need of cartridgere-fills. Foraying in the cartridge refill industry through franchise route is a promising venture. A cartridge refill franchise offers to its user’s quality refills at a fractional cost. Current industry trends and future projections suggest that printer cartridges demand will continue to multiply at a very fast pace as computers and low cost printers swamp the market. Cartridge World, Cartridge Café, Cartridge Xpress are some of the good low-cost franchise options.

Challenges

Every business has attached to it certain set of challenges. Though the basic challenges remain the same across the board for all business service franchises, their relevance with each sector differs.
Before opting for any of the above options, clear all your doubts. Apart from your initial investment, take into account the ongoing costs that must be paid to your franchisor, including franchise royalties, marketing fees and other required purchases. After you are convinced go ahead and make your mark in the franchising world!