photo credit: lirneasia
The following is a guest post by Miles Lee.
As more and more corporate executives lose their jobs or go into early retirement, business-to-business consulting franchises are becoming more and more popular. All it takes is a search for business coaching, cost containment, factoring, internet services, financial services, to name a few, and you will find an abundance of consulting franchise opportunities.
Consulting franchises are becoming more attractive because they typically do not require an investment in brick & mortar, and they allow executives and entrepreneurs to own a proven business without dealing with the headaches of managing a retail operation.
The following are some tips to think about if you are considering a consulting franchise:
- Analyze thy true self Are you ready to be your own boss? It sounds exciting and liberating, but it is not without a lot of stress. It is important to have a “street-fighter” mentality to in order to deal with the barrage of daily challenges that you will undoubtedly face. Most consulting franchisees are sole proprietors, so they have to be able to effectively face these challenges alone. Some people excel at this; others can become paralyzed by it.
- Prepare for the transition from corporate life A consulting franchise can be a particularly difficult transition for corporate executives and managers who are used to working in large companies with layers of support and rigid processes. The franchisor can provide some of that support, but most of the responsibility for tasks large (e.g. signing a new client) and small (e.g. running an errand to buy supplies) falls squarely on the new consultant. This can cause frustration and the feeling that you are being unproductive if you aren’t prepared for it.
- Consider starting your own consulting practice vs. purchasing a consulting franchise The barriers to starting a consulting practice are low, so it is important to determine what the franchisor offers that you can’t create or develop on your own. It could be a technology solution, subject matter expertise, business development support, speed-to-market, or some other advantage. Once you identify and understand the advantage that the franchisor offers, then you will feel more comfortable about your decision to purchase a franchise.
- Decide what is more important-structure or autonomy Consulting franchises typically do not require a brick and mortar facility, so there is generally more operational flexibility than many franchise concepts maintain. A process-oriented individual should look for a franchisor that has a lot of structure and process standards in its operating model. An entrepreneur, on the other hand, typically resists structure imposed by others, and thrives on having as much autonomy as possible. For them, established processes can be a hindrance.
- Take inventory of your “C-level” network Consulting is a relationship business, so your likelihood of success increases significantly if you have a large network of the decision makers, i.e. CEOs, CFOs and COOs. In fact, you should reach out to them before you make a decision on purchasing a franchise and see if they would consider engaging you if you decide to move forward. If you do not have a strong network, then give yourself more time to start cash flowing, because it may take a bit longer to secure that first wave of clients.
- View your time as a capital asset Consulting franchises usually don’t require a large start-up capital investment. This can be somewhat misleading. You should view each hour of the day as an investment in future growth. Make assumptions about how long it will take to start producing revenue, and calculate the value of that time, and you will come up with your “capital investment”.
- Integrity and trust should always prevail Unfortunately, not everyone is as honest and forthcoming as they should be. Look for the franchisor that is willing to tell you the “good, bad and ugly” during the Discovery phase. Put them on the spot. Ask to speak with people who are not succeeding in the model. Ask the franchisor what their weaknesses are, and what the strengths of their competition are, and be leery if they gloss over the answer. Once you purchase a consulting franchise, you want all surprises to be pleasant ones!!!
There are many great consulting franchise opportunities in the market today. Since many are relatively new, please take extra time and effort to conduct the due diligence required to find the right one for you.
Miles Lee is the President and Owner of Alliance Cost Containment, a national consulting franchise that helps mid-sized businesses reduce their operating expenses.