Financing_Entrepreneurship Essay Example | Topics and Well Written Essays - 3000 words

Financing_Entrepreneurship - Essay Example From the findings of this study, the MD of this case study Pimlico Plumbers is reluctant to do a franchise kind of business. Unless a business’ operations can be conducted from a central point, spatial expansion of activities would not be advisable due to its expensiveness. An example of performing business activities in different locations is that of one establishment in a given town and another in a different town or even a restaurant with the expectations of purchasing equipment and recruiting staff as well as renting of other business premises. Otherwise, if carrying out business operations in various geographical locations becomes hard, there is an alternative of licensing a format of business to other 3rd parties asking them for an opportunity of franchise. Pimlico Plumbers Ltd can be advised to consider franchising and on that note the MD, Charlie Mullins may consider the information provided by the growingbusiness.co.uk website. Under circumstances where third parties are seeking franchise just like in this case Zockoll, then there is need to understand this type of business approach. In such situation, franchisees have to take care of the entire or a portion of their cost outlay of launching franchised parent business’ version. Charlie Mullins’ fear of not Franchising is not losing control. ... It says that franchising presents an opportunity of growing a business both nationally and internationally and where the parent business need not make investments in premises and staff. Franchising is not advisable for all businesses in entirety. While it works for some, others are not likely to make it by way of franchising their businesses. All there needs to be is a recognisable or a widespread brand. (growingbusiness.co.uk, 2009) Pimlico Plumbers has been in business since three decades ago, with a staff made up of 133 engineers besides 42 personnel working in their offices. It is the biggest independent service body corporate. It is atleast known nationally in the UK and thus business franchising can work for the company. The clients of the company are with the inclusion of Chelsea football members of the team, Daniel Craig, Hugh Grant and Keira Knightley. The MD has appeared on Secret Millionaire a programme by Channel 4. (pimlicoplumbers.com, 2010) A franchise business is not free of merits and demerits alike. Franchises are advantageous to owners in that they get to undertake their own operations using the brand provided by an already existing business. A franchise also gains a profit share as well as upfront fee. Franchisees take financial risk while a business profile is being grown besides ample revenue. On the other hand, it is hated for its hindrance to expand in future since the only existing potential is that of staking in profits while franchisees enjoy the remainder. Poor management of franchises as likely to demolish a business brand is another disadvantage that should be put in mind. (growingbusiness.co.uk, 2009) (2). External Finance and Bank Borrowing On the issue of