5 Steps in Selecting The Perfect Franchise
As all people are different, what constitutes the ‘perfect’ franchise will be determined by business, environmental and financial factors, but also by your personal character, abilities and aptitude. Selecting a franchise is a task that requires you to look at external circumstances, but also demands that you examine your own nature. The following guidelines will help you to focus on the main issues in deciding what franchise, if any, is appropriate for you.
1 What do you know about in life? If you don’t want to have a struggle at all stages of your start-up, select a franchise in a topic area you are familiar with. It is difficult enough to start a new business without having to learn about an unfamiliar product or service stream at the same time. If you are familiar with the topic area you will know what the problem areas will be, what the business potential is, and what the demands on your time and money are likely to be. You will be also less likely to be conned by suppliers or a questionable franchiser.
2 What capital do you have available? Entering a franchise arrangement with insufficient capital will mean you are always struggling financially from the start. There are many ‘once only’ costs associated with starting a business, and if you cannot meet these, your business will have a difficult birth. The next financial consideration is whether you can make a profit from the business. The franchiser may impress you with earnings potential, but you know your local area and market. Don’t fool yourself with over-generous estimations. Careful research or due diligence in all areas of finance at this point will prevent pitfalls or unexpected issues later.
3 Is there a suitable location available to host your business? The franchiser may help you to find premises, or may rely on your local knowledge. Use the franchiser’s expertise to find premises that suit the working pattern of your business. Ensure that you use available expertise such as a lawyer or accountant to check the contract for the lease. If you are investing time and money in building a business, you don’t want to find you have built it on a dodgy lease agreement where your tenancy is insecure.
4 Secure the support of family and friends. You may simply need someone to stand in a store while you have a quick lunch, or you may need to borrow money to expand the business. Whatever the circumstances, the support of people you know and trust is vital in setting up a business. Life will be difficult enough without having relatives say ’I told you so’. Family and friends can see you through many business storms and provide a level of support and help that money can’t buy.
5 Decide which franchises meet these criteria. You have narrowed the field by researching which franchises suit your location, experience, circumstances and available finance. Now you need to make a choice as to the best franchise to invest in. You will be hopefully signing up to a long-term relationship, so don’t rely only on business data. If you just don’t like a franchiser, don’t give yourself years of grief and unpleasantness just because the relationship scored best in a survey. A franchise deal you are happy in will be much more productive than one in which the relationship is always difficult.
The guidelines listed above will give you some help in deciding among the many opportunities available. The most important lesson is that you do your research carefully, and don’t make a quick decision. Find out what the business arrangements are, but make sure you will be happy in the relationship. You will then hopefully have a business that will give you a profitable and a happy life.
