Buying and operating your own franchise is an excellent way to start running your own business. Most people have a better chance of running a successful franchise than they do a business they have started from scratch. Of course, running a franchise is still challenging; running any type of business is a challenge. But there are some important benefits of franchises that don’t apply to other types of business.
When most people think of a franchise, they think of McDonald’s. McDonald’s is the archetypal franchise business for many people, especially since the release of ‘The Founder’, starring Michael Keaton. But franchising opportunities aren’t limited to fast food businesses. There are now franchising opportunities in most industries. In fact, there are so many franchising options today that picking the right one can be difficult.
There’s more to consider than the franchisor’s reputation and the amount of money you can expect to make. The right franchise should speak to you on some level and, ideally, have relevance to any previous professional experience or training you have.
Below are some simple steps to follow when looking for franchising opportunities. Asking yourself these questions will quickly tell you whether any opportunity you’re considering is likely to be rewarding, both financially and professionally.
What do you want from your franchise?
Starting any kind of business is a risky venture; few of them can offer you guaranteed success and fulfilment. Before you pull the trigger on any franchise investment, you need first to be clear with yourself about what you want out of it and whether your aspirations are realistic.
Some people are looking for the full experience of running a business and turn to a franchise because it enables them to get things off the ground as rapidly as possible. Other people are looking for something a little less stressful than the full business ownership experience. Both types of opportunity exist within the world of franchising.
It’s essential that you are completely honest with yourself, about what you want from your franchise and whether your goals are realistic. There’s no sense pursuing unrealistic targets or wandering aimlessly into the first opportunity that presents itself to you.
How much time and money do you have to invest?
With so many potential franchise opportunities to choose from, there’s something available for most people, regardless of how much time and money they can afford to invest in the venture. Where restaurant franchises are usually more pricier due to needing a restaurant premises, other businesses such as cleaning franchises can be worked from home and have minimum overheads. However, as with any business proposition; the more time and money you have at your disposal, the greater the range of opportunities that will be open to you. It’s also true that having more time and money to invest generally means you can generate greater financial returns.
Again, you must be honest with yourself and set realistic goals and expectations. However, just because you only have time to work part-time or relatively modest cash reserves to invest, that doesn’t mean that there aren’t worthwhile franchise opportunities for you to consider.
Like most businesses, franchises usually take time to start generating appreciable revenues for their owners. Before you take the plunge and agree to invest in a franchise, make sure you have enough money in the bank to live off until you can get things kicked up into full gear.
How much can you risk?
One of the main benefits of franchising is that it reduces the risk for both franchisors and franchisees. For franchisors, the allure is the ability to grow their business and spread their brand quicker than would be possible otherwise. For franchisees, the attraction is being able to start and run their own business without worrying about proving their concept, developing the branding, or establishing a viable core for the business; the franchisor will already have taken care of all of these considerations.
However, that doesn’t mean that running a franchise is completely without risk. Both the franchisor and franchisee will have their own time and money on the line, not to mention their professional reputations.
What skills and experience do you have?
Whether you are considering starting a conventional business or business opportunities, or buying into a franchise, it always makes sense to choose a business that is relevant to your previous experiences and knowledge. In this regard, choosing the right franchise is just like choosing the right job; you should look for something that you are confident you can do well at.
That’s not to say you should only be looking at franchises that are directly related to jobs you have previously held. However, it is best if they have some relevance to your past experiences.
If you can answer all of the questions fully and honestly, you should have no trouble drawing up a shortlist of viable franchises to invest in. Remember, there are no guarantees when it comes to business. In addition to the above, you should also have an exit strategy in mind just in case things don’t work out.