Fastfood chains, restaurants, cafes — these have been taking the world in a storm ever since Mcdonald’s blew to its household fame today. Now, people are more creative and more assertive with their own business. This is also because people are enjoying eating out more than ever.
How can you ride the wave and succeed in the food industry?
People hear the term “outsourcing” quite a lot, but how often do we find those who understand what it means? By dissecting the word, outsourcing refers to looking “out” for “sources.” Read on for a crash course on outsourcing!
The History of Outsourcing
In business, it’s a scheme that involves contracting an external organization to provide goods or services in favor of another company. It’s a term popularized in the 1990s as manufacturing companies turned to others to furnish spare parts. At the time, outsourcing was mainly associated with the production of goods. But now, a paradigm shift has brought services under the outsourcing limelight. That’s right, and the rising trend is now outsourcing services.
It was a strategy born out of the constantly rising complexities of commercial enterprise. As organizations evolved, it was realized that some products and services were better off outsourced than created and provided in-house.
The main goal appears to be shifting the focal point towards the company’s core competencies; it could be on its main production line or the essential services it offers.
Often, companies outsource the skills, expertise, and facilities of others for spare parts. This is more cost-effective than building the facilities and training associates for the production line—for instance, manufacturers of mobile phones contract external organizations to produce screens, cameras, and speakers. The popular Corning Gorilla glass screens used in both Samsung and Apple phones are made by Corning Inc., a company with expertise in specialty glass, ceramic, and related technologies.
A law firm can contract an accounting firm for bookkeeping services. This way, the law firm can prioritize law practice, while the accounting firm can rest. Again, this proves to more cost-effective than hiring an in-house accountant full time.
Business firms engage in outsourcing one way or another, regardless of the organization’s size. By not trying to do everything independently, an enterprise can hone in on its core competency. As it maintains this focal point, the business achieves effectiveness and efficiency through cost-savings measures and decreased capital investment. It reinforced responsiveness to inconsistencies in the environment of commerce. There is also increased competition among suppliers that encourage them to ensure better quality goods and services in the future.
Franchising is another business scheme. It involves the distribution of goods and services through a franchisor. The franchisor is the one responsible for creating the brand image, system, and tradename. When you decide to get a franchise, you are borrowing a business for a fee.
There are many advantages to owning a fresh food franchise business. For starters, the required capital is usually lower because the franchisor provides everything ingredients to facilities. In turn, you can use some extra cash to improve the business, pay a loan, or start another company altogether.
Another benefit to owning a franchise is effective and enthusiastic management. Local management of each franchise will be more efficient and creative because they treat each franchise like their own and not that of the franchisor. This facilitates the speed of growth in terms of development and sales.
Other factors contributing to fast growth are how the franchisor will upgrade facilities, think of a new menu, and reinforce staff training. And as a franchisee, you don’t even have to worry about half of that. You just wait until the upgrades are delivered to your doorstep.
The best part about being a franchisee is that you no longer have to build customer loyalty from scratch. You’re already buying a well-establish brand. Take Mcdonald’s, Shakey’s, and Jollibee for examples.
Franchising isn’t perfect, though. There are still disadvantages, such as the fact that develop the system is going to be expensive. You will need a high initial investment to get the business started. You may also be restricted in terms of creativity because you must adhere to terms and conditions by the franchisor.
Perhaps one of the worst parts about franchising is that not all profits go to your back. It’s different from when you’re a solo entrepreneur because you get to have all the profits. In a franchise, you need to remit a fee to the franchisor.
At any rate, succeeding in the food industry today takes more money, time, and effort. In fact, it takes real grit to survive. But with outsourcing and franchising, you’re two steps closer.