My company looks for small businesses that have the potential to become franchises. Where would I find an information source I could use to discover unique small businesses? —B.D., Austin, Tex.
Like a talent scout or professional sports scout, you’re looking for small-time players who have the potential to hit it big. This is something of a needle-in-a-haystack proposition. There are millions of solid, profitable small businesses, but it takes some special attributes to turn them into franchises—and it isn’t always clear which ones will make the cut.
“It is a judgment call, based on the type of product or service a small company has and its ability to duplicate itself in other locations,†says Daniel Burrus, chief executive officer of Burrus Research Associates in Hartland, Wis. Because many small, privately owned companies are leery of disclosing their financials, it may be tough to figure out which ones could sustain rapid expansion. And even the owner may not be sure whether his or her concept is a candidate for franchising, Burrus says.