April 06, 2023
To understand the ecosystem of the franchise or dealership, we did basic research with few of the dealers and consultants in the market. The following is an excerpt from the interview Deltic (Delta Autocorp) took with a consultant who has helped more than 50 franchisees to own the right business for them.
Deltic: How do you make someone understand what is the right business for them? Which is the most suitable framework to understand a business as a layman especially when keeping franchise-investment in mind?
Consultant: Well, I make it case dependent but one generic model is most understandable is BCG Matrix. According to BCG Matrix, there is something called Cash Cow and Star refer below:
How to Focus on the Stars with a Clever BCG Matrix
This helps you to assess your running businesses or assess any other businesses especially for a person who has not been into business.
Keeping the perspective of a franchise in mind, one can help oneself with understanding the various aspects of a franchise and personal requirements and boundaries.
Deltic: How do you find the electric vehicles segment when it comes to a franchise model?
Consultant: Well, I will suggest to anyone planning to go for a franchise to invest in a Star as per the BCG Matrix, when going for a franchise business. Without repeating what is already presented in the article whose link I had shared above, we can clearly figure that e-vehicles dealership is a segment which has a growing market and if a good chunk of market share can be held then it is an ideal case i.e. a star as per the BCG Matrix.
I always suggest something safe and easy for the first lot who is planning to start off the first time!
Deltic: What do you think, is a franchise business good for a beginner who has no experience of running a business before?
Consultant: See, franchise business is ideal for such people only. Especially when the investment bracket is 10-40 lakh. Try to understand that the franchise model exists since a proper business, franchisor, is looking for expansion while not having the investment for the same hence they get franchisees to invest and own a unit where the franchise doesn’t have to worry a lot about the core business. This is pretty ideal if you don’t have experience as all you have to do is to do your job properly while not facing the random heat a businessperson has to undergo. Owning a franchise is best for the ones who are trying to figure out what to do, a typical passionate entrepreneur with an idea would have more focused queries.
Deltic: What are the parameters one should look at when going for a franchise/dealership especially when someone is trying a hand at a business for the first time?
Consultant: Look it should be first about your own requirements but if I put it in a generic way then one needs to clearly understand that Safe, Easy, RoI, etc. should be the terms defining the nature of business you are eyeing for especially when you lack experience.
Don’t look for a quick buck, it might be lucrative but is risky at the same time. Go for more traditional businesses where you don’t have to create demand, just act as a supplier in a field where demand is already there.
You are not doing this with the mindset or room to work for someone’s visions and solving problems but to invest in expanding an existing business, don’t go for undiscovered adventures but pathways where returns might be slow but sure. Buring fingers at first business is a bad idea, really terrible.
Deltic: Would you suggest to invest in the electric (like e-rickshaw) dealership?
Consultant: I will advise you to go to the e-vehicles segment. Despite a lot of players hitting the market with a good dealership network already there - the industry is so new that there is enough of the pie left. Also, most of these entrants will be out as the market matures as many of them are experimentalists while most of them are a part of the ‘unsaturated-group’ which will be gone.
So all of the proper businesses and dealerships in this segment are doing fine and how would someone define ‘proper’? Approaching, Pragmatic, Honest, Relation Management, etc. for the dealers. Serious, Investing, Visionary, etc. for the businesses.
Sounds like any ‘good boy/girl’ businessperson? Yes, this simple. With no cruel and very intelligent competition, this is it!
Deltic: And how do you recommend Deltic as a brand?
Consultant: The numbers are really good and I term Deltic as one of the only brands in the segment of e-vehicles. I really appreciate the way the company has established its firm ground, an example for the entire ecosystem. With an investment of 10–15 lacs, including your 8–10 inventories and marketing support which is like ‘zero-brand fees’ and a dealership of e-rickshaws and e-scooters. There are a good number of brands in the market but I have been personally advising to go for Delta Autocorp - Deltic. Few of my clients went with you and could break-even within the first year.
Deltic: Thank you so much! Deltic is already becoming the market leader in the e-rickshaw segment by 2020 while having competition from both the unorganized segment and players like Mahindra.
Consultant: Oh, wow! Congratulations.
Deltic: Yes, our state of the art technology and big enough on-ground network is making it possible. A lean team working with various tie-ups and partnerships which has made the current reality possible. We have been engineering our products in India while creating the vehicles for India, our leadership has made it clear from day one that Deltic electric vehicles shall be good for every kind of terrain while fitting in the budget of the common man.
Consultant: Yes, I read about this and got truly amazed by the approach you have been taking. Industry seniors have huge expectations from Deltic as they are believing that the ‘engine based vehicles’ segment is truly different from electric and Deltic is on the right path to make a distinct name in the industry, not only against the ‘startups’ but even the ‘big brothers’.
I especially appreciate your emphasis on creating products that are affordable while technically upgrading your e-rickshaws and e-bikes for the different regions in India. Your presence and monopoly in 11 states while offering e-rickshaw and e-bike (electric vehicles) dealerships in Bihar, Uttar Pradesh, Assam, Orissa, West Bengal, Delhi, Karnataka, Maharashtra, etc. is commendable.
Deltic: Thanks, creating employment source via e-vehicles is another angle which satisfies us immensely.
Consultant: Yes, exactly. This wave of electric vehicles as emerged as a fine source of entrepreneurship and job creation. So many people have gotten employed because of this. How many electric vehicle dealers you have by the way?
Deltic: Over 150, and every dealership employs 4-5 people individually hence that is certainly there. Also, the e-rickshaw especially employed over 10,000 people - most of them being youth hence the amount of feel-good is certainly there.
Consultant: Wow! And how has the government been supporting you and other electric vehicle companies like yours?
Deltic: Government has been really cooperative and helpful. We have financing aids with loans and subsidiaries plus quite an on-ground support as this is like an evolution in the transportation system. At times government policies and awareness programs really help us to reach the masses.
Consultant: That sounds nice, would love to know more about these programs some other time. I wish you all the very best for your journey ahead, keep leading the baton of electric vehicles and this change in legacy for the good of the ecological system.
Deltic: Thank you so much! We have launched e-scooters/e-bikes/e-two wheelers with the onset of 2020 and soon you will see many more innovations coming from our side.
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