Franchising: Something to Consider When Deciding to Start a Business
Starting your own business is at once thrilling and exciting. It’s also frightening and intimidating.
It’s thrilling to think of breaking away from the 9-to-5 and the constraints of a fixed income. It’s exciting to finally start following some of your true passions. And it’s inspiring to think about waking up every day to the prospect of doing work that you enjoy.
Conversely, it’s only natural to be frightened at the prospect of giving up a predictable paycheck and an established routine. And it’s intimidating embarking on an adventure into uncharted territory. For all of these reasons, franchising is one of the options you should consider when you’re making your decision.
Coming to a Decision
You may have some clear ideas on what you want to focus on when you have your own business. Likely, you already have some strategies in mind for hiring people in those areas that you have little or no talent in. All the same, the bigger question you will have to ask is whether you should start a business from scratch or buy an existing business.
For example, perhaps you have a wide range of practical skills and feel that you could run a cleaning business. In that case, should you simply build the business from the ground level—or should you buy a cleaning business that is available for sale?
One advantage of buying an existing business is that you might be able to get all the equipment you need and rent an available office space. In many instances, too, you will be able to hire skilled staffers and provide services to an established clientele.
Still, an even better approach might be to think of franchising. Now, instead of simply taking over an existing business as a new owner, you will be given a comprehensive business system to manage. What’s more, your new business will have an established track record.
Moreover, staying with our analogy of starting a cleaning business, you might stumble upon a specialty business. Take for example a business like Spaulding Decon, which focuses on crime scene cleanup. As a franchisee of Spaulding Decon, you will get access to a unique opportunity. Further, you will also be able to reap benefits that are not available at more ordinary types of retail or food franchises.
Benefits of Investing in a Franchise
If you have little to no business experience, then your chances of success by starting a business from scratch or taking over an existing business that is up for sale are somewhat slim. Even if you are able to raise the funding necessary to make the investment, you still need to have a working knowledge of how to manage business finances, accounting, marketing, and sales.
Under these circumstances, you will find that franchising offers you a wide range of benefits. To name a few, you will be representing a well established brand. You will share in the benefits of working with a large group of business owners. And finally, you’ll get detailed training on all aspects of business operations, marketing, and sales. In short, a franchise will help you get up to speed on any missing skill gaps you might have when it comes to running a business.
RELATED ARTICLE: HOW TO VET A FRANCHISE
7 Steps to Researching a Franchise
Naturally, you will want to do your due diligence before you buy a franchise. Here are 7 steps to take to ensure that you do a thorough job of evaluating a franchise that interests you.
- Find a franchise that fits in with your working experiences and plays to your strengths.
- Research the best financing measures to fund your venture.
- Evaluate the strengths and weakness of the industry that interests you.
- Assess how recession-proof the business model will be should the economy change.
- Identify at least 5 franchises within the niche. The heavier the competition, the more it suggests a high consumer demand.
- Ask the franchisors for preliminary information and read (not skim) the Franchisor Disclosure Document (FDD). Ask a business lawyer to explain the aspects you don’t understand.
- Interview both the franchisor and a few franchisees to make sure that you have all your questions answered and concerns addressed.
Making a Final Decision
If you have more than enough technical skills and plenty of business experience, then starting a business from scratch could be the right decision for you. Buying an existing business might also be a viable option.
Conversely, if you have little or no business experience, franchising will minimize your risk of failure. You’ll be less likely to incur a loss on your investment by joining a franchise.
You’ll know if you have made the right decision on the franchise you join. For one thing, it will match your financial resources. It will also help you to capitalize on the technical skills and your experiences in your working life. But best of all, it will offer you the lifestyle you imagined.