Written By: Gouri Ghosh

You have 20 lakhs, and now you want to start a business. The most popular choice is that you will invest your total amount of 20 lakhs in either one franchise or one store. You believe that this method would be easier, and most of the novices prefer this approach.

However, relying on one business is sometimes not a wise decision. For example, if your business turns out to be unsuccessful because of reasons like low sales, bad location, or any operational problems, then your entire investment would be at risk. Moreover, when you rely on only one income source, then there are chances that things may turn out to be troublesome and tense for you.

This is why a multi-franchise concept becomes relevant. Rather than relying on a single business, you allocate your funds into 2-3 different smaller franchises. This blog post would assist you in understanding how to make a multi-franchise India strategy by utilizing ₹20 lakh, select the best franchises, and increase income sources.

Understanding the Concept of a Startup Portfolio

A start-up portfolio is nothing but running several small enterprises as against just having one. This ensures that you are not depending on one particular stream of income.

• This concept works the same way as when you invest in the stock market. You do not put all your money in a single investment.
• In the business context, the principle works similarly. Adopting a multi-portfolio management strategy helps you ensure a better balance between risks and rewards.
• The profits generated by the other start-ups will help cushion your income in case one of them does not turn out profitable. This will make your income much less stressful.

In India, adopting such an approach can easily be done through multi business franchises. Franchise opportunities come with a system, with branding advantages, making them easy to operate.

What is Micro-Franchise?

A micro franchise is a low cost small franchise business. This is suitable for investors who want to enter in franchise world with low budget.

• A micro-franchise typically possesses the following characteristics:
• Low capital costs required
• Efficient business operations and standardization of processes
• Backed by the parent brand with support and guidance
• Examples of micro-franchise companies include tea/coffee outlets, courier services, retail stores, and cloud kitchens.
• These firms utilize existing proven models, meaning that there is little innovation required in such businesses.

The rising popularity of micro-franchises in India can be attributed to the following factors:

• People believe in branded companies
• Affordable business cost
• Already established, proven systems

It is a viable option for beginners due to the availability of an already set structure for their business operation.

Why ₹20 Lakh Budget is Perfect for Diversification

High level of flexibility: It provides scope to pursue more than one business opportunity at once rather than restricting you to a single business only. It becomes ideal for new entrants who seek to minimize risks.

• Not sufficient for premium franchises: But the budget fits perfectly well into the category of small and proven business models, which are part of the multi brand franchise in India business model. These businesses are easy to start and manage.
• Allocation of funds becomes feasible through this budget:
• Investment in two-three micro-franchise models is preferable to the investment in a single business enterprise.
• Part of the fund can be allocated to working capital.
• Unexpected expenditures can be easily managed with the help of such a budget.
• Rather than investing all your money in a single business: You get the opportunity to invest in different sectors such as food, retail, and service industries, thus ensuring balanced risk.
• The most significant benefit of this budget is its strategic vision: Rather than starting one outlet, you get an opportunity to establish a network of multiple franchises, which generates multiple revenue streams for you.

Portfolio Model of Three Micro Franchises

Now let us try to divide our model into three parts to make it more practical. The purpose of developing this model is to create a balanced multi-franchise portfolio in which each micro-franchise plays its part to ensure your profitability.

Food

Food business franchises have always been successful because their products get consumed by people daily and hence the demand is steady everywhere. You don’t need anything fancy to kick off such an enterprise and even tea shops, coffee kiosks, and cloud kitchens will serve the purpose.

Advantages:

• Regular demand means regular customers visiting the shop.
• Fast sales cycle will enable you to generate revenues daily.
• Excellent margin means better chances for profitability.

Role in the multi franchise portfolio:

It serves as the generator of cash flow in your portfolio.

Logistics/Courier Franchise

Logistic/courier firms have been flourishing because of an increase in e-commerce activity. This business model does not rely significantly on customers entering their premises and is system-based.

Benefits:

• Minimal need for stock, hence making operations simple.
• Consistent demand guarantees continuity in the business.
• Guaranteed income, making budgeting easy.

Place in your business portfolio:

• The logistics franchise will be your anchor business, offering income consistently.
• It counteracts the instability in other businesses.

Retail or Dairy Franchise

The retail shops selling products for everyday use bring in repeat customers and generate continuous sales. The dairy franchises, ice cream shops, and FMCG shops work perfectly in places where there is consistent traffic.

Strengths:

• Continuous sales means continuous customer visits.
• Predictable sales due to consistent demand.
• Simpler operations, which makes running it much easier.

Part played by this business in your portfolio:

It serves as a stability factor in the income you earn.

How This Model Works Together

If you put all three businesses together, you will be able to develop a synergistic multi-business franchise model that will function as an effective portfolio.

• The first business will bring cash flow in your system on a daily basis.
• The second business will give stability and income in terms of your business cycle.
• The third business will make sure that you have consistent sales in your system.
• Each business fulfills a different type of demand, hence reducing dependency on one market sector.
• Even if one business fails, the rest of them can earn money for you and maintain your cash flow balance.
• You will receive a mix of high risk and low risk ventures, which will help increase your overall stability.
• This approach will allow more effective multi-portfolio management because you do not have to rely on one source of income.
• Eventually, you will be able to recruit employees and run the three businesses with greater efficiency.

The best thing about this method is that you get exposure from various industries, enabling you to make the right decisions in the long term.

It provides a solid foundation for any further expansion plans for franchises down the line.

That’s the beauty of implementing a multi-franchise portfolio India approach.

Franchise Comparison Table

Sample ₹20 Lakh Allocation Plan

Expected Returns and Timeframe

Every venture needs time to develop, so you should not expect profits right away upon startup.

There are varying timeframes for each type of franchise:

• Food franchise – it usually takes 12–18 months before breakeven occurs
• Logistics franchise – might take 18-24 months due to slow but constant growth
• Retail franchise – could take anywhere between 12 to 24 months depending on the area

Your input is necessary during the early stages because it is not just about earning passive income; it would require you to do some managing.

Once your ventures start expanding, your work decreases: you can get employees to help you, organize, and streamline your processes.

Be patient with your ventures; a good portfolio of multiple franchises might take some time, but eventually, it will give you a constant income source.

ROI & Payback Period Table

Mistakes that investors should avoid

The mistakes are:

• If you choose any franchise for its popularity then it would be dangerous for you.
• Over look the locational facilities is another problem in this business.
• Discounting costs such as rent and employee salaries may lead to financial difficulties early on, especially during the first couple of months.
• Failing to understand the franchise agreement may prove to be detrimental later on, when you find yourself facing consequences of your actions.

Thinking that everything will go smoothly without you getting involved is yet another beginner error.

Franchise Selection Strategy for Success

Selecting the right franchises can be termed the single most crucial aspect of making a successful portfolio. Making an appropriate selection during this phase can prevent future losses and strengthen your multi franchise portfolio in India strategy significantly.

• Evaluate Investment and Budget Alignment
• Make sure the cost of the franchise fits well in your budget of ₹20 lakh and still leaves room for other operating costs.
• Assess market demand in your area
• Choose brands that meet customer demands in your locality, thus providing a continuous flow of sales from the start.
• Consider the brand support and training provided
• Go for brands that have the right support and training programs to aid your management in handling operational processes smoothly.
• Factor the availability of staff and ease of management
• Opt for those businesses that allow easy hiring and management of staff to enable easy operation.
• Plan for future expansion
• Go with  those franchises that give space for expanding business opportunities.

The above process will form a solid base for a profitable multi-franchise portfolio.

Weekly Time Allocation

For Whom Is This Strategy Appropriate

This strategy is recommended for those individuals who intend to begin a venture while mitigating risks effectively. This framework encourages the creation of several income streams rather than relying on one revenue stream exclusively.

New entrepreneurs:

 This strategy is ideal for new entrepreneurs because micro-franchises are relatively easy to handle and offer a franchise's brand support system.

Salaries earned by individuals who plan to start a venture:

 Those salaried individuals who wish to venture into business while having savings can use this strategy to generate income in parallel.

Those investors interested in low-risk investments:

 This diversified approach minimizes the possibility of total losses that occur when investing in one business exclusively.

Individuals planning to develop several income sources:

 This strategy is helpful in developing multiple income sources, rather than generating revenue through one channel.

In conclusion, those who do not want to invest in one business should adopt this strategy.

Scaling Above the First Portfolio

When the profitability of your firms becomes steady, then you should consider scaling up. In this case, what you need is to exploit what you already own and develop in a systematic manner.

• Invest your earnings back into a second franchise: This way, you will not withdraw the total amount earned but rather invest it into forming a new small enterprise and hence diversifying your earning base.
• Start another outlet for your present franchise: When one outlet is performing well, you can start a new one near it to boost your scaling process.
• Expand to other business types: By now, you should have enough resources to open different business franchises to create a robust portfolio.

As time goes, this process will enable you to create a proper multi business franchising system.

Read more: Low Investment Franchise Opportunities for First-Time Investors in India

Conclusion

Investing in a business worth ₹20 lakh doesn’t necessarily mean that one should go all-in on one venture. What works best in such a situation is investing in multiple micro franchises to build an income portfolio. This method will help you diversify your risks, optimize your cash flows, and scale slowly and steadily.

With proper planning you can run more than franchise with 20 lakh investment and create a multi franchise portfolio in india.

FAQs

Is this a better choice to investing in a single business?

Yes, because it diversifies your investment.

Do I have to be involved in the business full time?

Yes, in the initial stages until you hire employees.