Almost two fifths (38%) of owners of businesses set up in the last ten years are optimistic that the UK economy will improve in the next 12 to 24 months.
Some 9% said that they expected to see improvement in the next 12 months. This is according to new research by Geek Retreat, the geek culture retailer, gaming café, community hub and events venue.
This positive outlook is welcome news after a challenging two years which has knocked profits and confidence for many business owners.
Almost half (49%) of those questioned said that the cost-of-living crisis has adversely affected the performance of their business, with over half (55%) of these saying this has resulted in a decrease in profits of between 11% and 50%.
The research reveals the challenging circumstances has significantly impacted business confidence, with 17% of owners questioned extremely concerned about their business failing in the next five years, and 27% said they are quite concerned. Over half (52%) said that they aren’t concerned about going bust at all.
Peter Dobson, CEO of Geek Retreat, said, “After a difficult couple of years where businesses have struggled with profitability and the impact of the cost-of-living crisis, there is a sense that economic recovery is on the horizon.
£It is in these challenging circumstances where the franchise model comes into its own, with failure rates lower than sole propreitorship2. At Geek Retreat, we have created our Franchise Success Team to support our franchisees when they need it most, whether its financial management or purchasing merchandise.
“Over the last 12 months, Geek Retreat has outperformed the CBI’s high street performance reports, demonstrating real resilience of our network of stores but also the importance of reimagining retail to focus on experience and community building. By focusing on creating meaningful integrations, businesses can attract new customers, drive more sales, higher engagement and long-term loyalty.”
The Geek Retreat franchise, which opened its first store in Glasgow in 2013, now has 36 stores compared to ten at the end of 2019, reflecting its huge popularity on the high street because it offers local communities and individuals a safe and inclusive place to enjoy their hobbies and interests.
Benefits of joining a franchise
Reduced risk – nothing in life is risk-free but joining a franchise is a safer and more reliable way of starting your own business than setting up from scratch.
One fifth of new businesses in the UK do not make it past the first year and 60% of new businesses fail within the first 3 years. Only 33% of small businesses reach the 10-year mark. According to the British Franchise Association, the rate of failure for franchisors has stayed between 8-12% for over 22 years.
Reduced costs – the initial investment required for joining a franchise is often a lot less than starting from scratch and franchisees can tap into an established brand and systems and processes – saving time and money.
An established brand and customer base – with a franchise, customers will already know about the brand, although there will still be a need to promote the business in its new territory. There is also the opportunity to tap into national marketing campaigns and enjoy access to large scale coverage, such as TV adverts, that would be prohibitively expensive to pay for on your own.
Product innovation and R&D – established franchise brands have the manpower and capital to constantly research and develop new products and services to adapt to changing consumer trends. They are more likely to invest in entirely new products and services to help to keep their business one step ahead of the competition.
Purchasing power – whether it is new merchandise or supplies for the café, franchisees benefit from the enhanced purchasing power of the bigger group. As the cost-of-living crisis bites and suppliers are asking more for their goods and services, every penny counts.
Support – many people aspire to run their own business and franchising makes this a reality. Franchisees have all the benefits of being their own boss but are also part of a larger network of like-minded individuals and industry experts who can help solve problems, share ideas and best practice. This makes maximising the earning potential of a new franchise much quicker.