Business climate in Serbia – by two relevant reports.

Who are entrepreneurs and what isentrepreneurship – common definitions?

About franchising – the basics.

Franchising – specific entrepreneurial alliance.

Franchising – an opportunity not a miracle.

Introduction

Entrepreneursand

Entrepreneurship

Franchising

Franchising asPathway to

Entrepreneurship

Conclusion

Introduction- Doing Business 2008 Serbia -

Serbia has negative change in overall business’ life ranking, falling from 84th place in 2007 to 86th in 2008 – World Bank’s Doing Business 2008

Positive change for two of ten rankings:

1. Getting credit and2. Closing Business.

Number of reforms in previous year – zero (0).

84th2007

86th2008

Reforms = 0

Introduction- European Charter for SME’s -

Report on the Implementation of the European Charter for Small Enterprises in the Western Balkans

Overall score for 2007 – 2,48.

To join EU a country must have between 4-5.

Overall score2,48

Introduction- Starting business in Serbia -

To start a business – hot topic (i.e. to cut unemployment rate).

Increasing number of start-ups.

The most popular industries in Serbia:

2008Σ companies

6.338Σ

entrepreneurs23.321

Companies Entrepreneurs

Trading Bars & Restaurants

Consulting Hair Cutting

Construction Taxi

Entrepreneurs and Entrepreneurship

“Entrepreneur is a natural person who is registered and who conducts lawful activities for profit as his profession, including art, old trades and domestic work.” Serbian Law on Business Companies

“Entrepreneurship is a way of thinking and acting that is opportunity obsessed, holistic in approach, and leadership balanced – for the purpose of wealth creation.”Timmons J.A., Spinelli S., "Creation for th 21st Century", 6th ed., McGraw Hill, 2003

Entrepreneurs:- create- innovate- employ

Entrepreneurs and Entrepreneurship

Self-questionnaire: “Should I start a business from scratch, buy an existing business, or purchase a franchise?”

High failure rate due to poor sales, intense competition, lack of capital, or lack of managerial ability.

Financial and nonfinancial assistance to start-ups by government’s institutions.

For the person who actually starts his or her own business, the experience is filled with enthusiasm, frustration, anxiety, and hard work.

Franchising- Definitions -

Franchising is a method of business expansion characterized by a trademark license, payment of fees, and significant assistance and/or control.

A franchisee acquires the use of ‘proven formula’ for new entry from a franchisor.

Serbia: Franchising Market

Franchising is an example of a new entry that focuses on imitation to reduce the risk of downside loss for the franchisee.

Franchising- Advantages vs. disadvantages -

Buying a franchise gives to a franchisee only a head start, comparing to starting stand-alone business:

Franchise is type of contractual vertical marketing system.

Proven product and/or service

Brand

EstablishedBusiness Plan

Financing Assistance (sometimes)

Knowledge of market

Operations

Quality Control

1

2

3

4

5

6

7

Franchisingas Pathway to Entrepreneurship

Franchising is specific entrepreneurial alliance (contractual vertical marketing system) through which franchisor and franchisees are exploiting business opportunities in competitive manner.

Franchising (from a franchisee aspect) is not only imitation or copy of some other company’s business concept, because a franchisee, for example, must cope with competition.

Four qualities that franchisors want in franchisees:1. good people skills,2. ability to be coached,3. general business skills,4. access to capital.

Franchisingas Pathway to Entrepreneurship

The franchisee is getting all necessary skills (through training and procedures) to run a business in one specific industry.

Franchisors are there to provide “hands-on”, one-to-one assistance.

For US franchises, the most attractive prospects in Serbia is probably in the restaurant sector.

Conclusion

Franchising provides entrepreneurs with an affordable means of accelerating expansion and achieving development goals more quickly than might otherwise be the case, and with far less risk.

Franchising is major contributor in the development of management and technical skills that are vital in the creation of an experienced work force, which is so important in building and strengthening Serbian economy.

The challenge is to run a business in today’s turbulent environment, trying to survive in market arena, fighting with competition for every customer.

Conclusion

The challenge is to run a business in today’s turbulent environment, trying to survive in market arena, fighting with competition for every customer. In such environment, knowledge (information, experience) and networking are becoming vital resources of modern company.

Franchising appears as business model for those who want to start their own business, but lack in some business skills.

“While franchising does provide opportunities, it does not create miracles.”

19 Questions about franchising”, IFA, www.franchise.org

Do you Do you have any have any questionsquestions??