The articles written by the PÚBLICO Brasil team are written in the variant of the Portuguese language used in Brazil.
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Entrepreneurship is a verb that fascinates Brazilians. Many see this action as a form of general liberation, from bosses, from demands, from subordination. And one of the most popular ways to own your own business is through franchises. Not that it is an easier path to success, but because it is a better structured path, the risks are diluted. Data from the Portuguese Franchising Association (APF) shows that 80% of companies originating from franchises survive in the first five years.
There are many rules to avoid failure, says Cristina Matos, general secretary of the association. “The first tip for anyone who wants to start a franchise is to ask themselves which segments they don’t want to operate in. It is fundamental, as the chosen business needs to be related to the person who is going to undertake it”, he states. The choice must involve a good business modelthe size of the investment to be made, where the franchise will be located, who will do what. “These are basic rules, but sometimes they are not observed with the necessary criteria”, he emphasizes.
On the franchisor’s side, there is also important questions to be followed. There is no point in a brand granting franchises as if there was no tomorrow if, later on, the business will close. “This greatly compromises the image”, says Cristina. Therefore, companies evaluate very highly those who propose to take their brand forward. They often even say no. This process is so rigorous that, in some cases, it can take up to a year to say yes.
“In general, negotiations take two to six months, but it all depends on how the two sides understand each other and whether there will be match”, he reinforces. “Franchising is like a marriage, both sides need to be together on the same route. The franchisee must fulfill his obligations in the relationship and the franchisor must provide support so that all ends are tied”, he points out.
Cristina Matos, from the Portuguese Franchising Association, says that it is possible to start a franchise from R$5,000
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Today, details the APF director, it is possible to start a franchise from 5 thousand euros (R$ 30 thousand). This is a very small business, which will not generate large revenues at the beginning. “There is no point in thinking that the operation will result in income to guarantee good remuneration for the entrepreneur, his wife and anyone else in the family. It’s not like that”, he warns.
Cristina also emphasizes that it is essential that the entrepreneur invests at least some of his own money to start the business, to have a clear feeling that he owns it. “The more resources the franchisee puts in, the better, as they will not be dependent, for example, on bank loans, which everyone knows how they are”, he says.
Bold Brazilians
Brazilians in Portugal, believes the representative of the Franchising Association, have been excelling in entrepreneurship through franchises. “Normally, they are more daring and willing to take risks,” he says. But this in no way diminishes the need to keep both feet on the groundfollowing a pre-determined itinerary, without hurting your financial capacity, believing that you have invested money and that’s it. There is a period of maturation. During this period, working capital is needed to cover all expenses.
Cristina even says that, at the fair that will be held by the association on October 18th and 19th, several Brazilian companies will be present to offer opportunities to those interested in entrepreneurship. “We will have brands coming from Brazil, such as Lavateria, which has 500 points in the country and is in the process of internationalization, and companies that were born in Portugal, but are owned by Brazilians, and have been expanding very consistently”, he adds. The fair, to be held at Pátio da Galé, in Lisbon, will have more than 50 exhibitors.
Among the economic sectors that have stood out the most in Portugal are tourism franchises, supermarkets, food, home support and real estate. “There is great diversification among the fair’s participants. The interesting thing is that there will be room for experimentation. Participants will be able to experience what the business they want to have is like in practice”, he highlights. They will also learn technical terms from the business world, such as breakeven e payback. The first means break-even point, when the revenue generated by operations is already sufficient to cover expenses. The second is when the return from the business starts to cover the investments made.
Cristina, daughter of Portuguese parents who was born in Angola, lived in South Africa and Brazil, pays special attention to entrepreneurial immigrants. According to her, their biggest challenge is having support to take the necessary steps. “They generally do not know Portuguese legislation, do not have relationship networks, nor do they know how to deal with the banking system. Therefore, the option for a franchise appears to be safer”, he says.
She adds: “Franchisees must be committed to the business, motivated, defend their companies, know how to work in groups and lead teams.” These tips apply to everyone, regardless of nationality. Money, as we know, doesn’t take kindly to insults.
