We added the question mark because we are not totally convinced that this time-honored saying is correct.
We do not dispute for one minute that it certainly was true and very meaningful just a few years ago but as for its merits today, we believe a question mark is appropriate.
Franchising continues to be the avenue of choice for many entrepreneurs leaving the corporate world and transitioning into entrepreneurship and self-employment. In their corporate lives many people have found that long hours, hard work, being available and on call are all part of the expectations that go with the job. In such scenarios maybe hard work is an asset, and even a key to climbing the corporate ladder.
When transitioning to their own business, the habits and traits of a lifetime are surely going to follow. They might even be enhanced as one is now working in a self-employed capacity, and the rewards of the hard work and long hours come right back to the owner. Working harder on your own project would seem to make sense as you benefit directly from your efforts. This is in fact one of the reasons that so many people move into self-employment – the opportunity to run their own business on their own timetable.
Starting a business is not an easy venture, and again this is in part why franchising has ‘caught on’ and new franchised units are opening across the continent on an hourly basis. There is very little that we use or consume today that isn’t distributed through a franchise of one type or another. However, there still lingers the notion that franchising is very much confined to fast food and automotive-related entities. That may be because they have such a visible presence on every street corner. However, the story is far from limited to a few categories – today there are literally hundreds of different business types that are successful franchises, and likewise thousands of opportunities to choose from for the would-be franchisee.
One area often overlooked by potential franchisees is that of financial services. Many former company executives often seek out a ‘white collar’ type franchise, so financial services would seem to be an excellent choice. While the financial service franchise area is not overcrowded, there are some very well-established models worthy of review.
The Interface Financial Group is one such franchise with well over 40 years of history – history built on performing and providing a financial service for many years prior to franchising that same service, thus bringing a tried and tested approach to the franchise model. Interface now operates in nine countries and services the SME marketplace. Small and medium-sized businesses are finding it increasingly difficult to access capital for growth purposes through conventional sources – banks, which have been the traditional funder of choice, are now showing a definite reluctance to finance anything but the largest and strongest of ventures. This situation certainly does not help the growth cycle of the SME strata – as a business grows it invariably needs more working capital and, as it acquires that capital, it grows and needs more working capital, and so on.
The Interface Financial Group helps business owners access that growth capital through a unique and proven invoice discounting plan. This is basically a cash-flow acceleration program, taking invoices that a company has issued to their customer and turning them into instant cash – a cash-on-delivery (COD) sale that enables them to expand rapidly. Interface buys those selected invoices at a discount as and when their client needs to accelerate their cash flow for any particular reason.
Interface franchisees interact with their clients on a local basis bringing an in-demand and timely service to the SME marketplace. The transaction is structured as a buy/sell approach and, as such, there is no loan involved in the transaction. This makes it an off-balance sheet funding facility for the user.
The fact that Interface has been able to successfully transform that service into a franchise model is in itself quite unique, but the uniqueness does not end with just the delivery of the service – Interface has developed a methodology and transaction structure that makes it a very attractive financial vehicle for franchisees. Clients really like the ease and speed with which the service is delivered, and franchisees like the ease and return that they enjoy in employing their working capital.
When you by an invoice or discount an invoice, obviously someone has to come up with the funds to make it happen. The Interface method takes the approach that this should be a shared venture between franchisee and franchisor. This approach, therefore, reduces risk and capital involvement for Interface franchisees. Interface has devised a leveraging structure that only requires a franchisee to contribute 16% of the capital needed to complete the purchase of an invoice. Interface – the franchisor is responsible for the balance.
Logic would seem to dictate that if you are contributing only 16% of the capital in a transaction, then your income entitlement would be that same 16% number. This is where Interface has scored – their innovative leverage program, which comes at no risk or expense to franchisees, gives all franchisees a much higher yield than just 16% of the income.
We started at the opening of this article talking about hard work and introducing the question mark for that statement. The Interface Financial Group has crafted their franchise, which is known as the IFG 50/50 franchise, to minimize the hard work aspect. Most franchisees would not even categorize the minimum amount of ‘work’ that they do as hard work. This is because the Interface system has embraced technology to the maximum extent possible. In addition, the franchisor takes on a major role in each transaction as they handle virtually all of the transaction paperwork and the transaction management process.
The approach favored by Interface is to work smart and not work hard. Interface franchisees are involved with what they call the ‘people part’ of the business, leaving all of the ‘paper part’ to the franchisor. So if franchisees are not working hard and certainly not working long hours – a typical Interface franchisee can often run their franchise in 2 or 3 days a week – are they really reaping the rewards of self-employment and owning their own business? Needless to say the answer is a resounding yes – IFG 50/50 franchisees work in a well-controlled environment, they work smart, and they generate a well above-average return on their working capital. Not only are they winners, but their clients who use the service are winners too as they have a greatly accelerated cash flow and enhanced growth opportunities.
Working smart rather than working hard is certainly the Interface approach, and it is still paying dividends after 40+ years of operations.
For more information visit www.interfacefinancial.com