The day has come, or even more likely it has been forced upon you because of an employment change, and you decide to venture into the world of entrepreneurship. You know lots of people run businesses and they seem to be doing okay. You say to yourself, “I believe I can do that, I have the background and knowledge to run my own business. I have watched my employers make money on my hard work. If I did run my own business I would never have these gaps in employment going from job to job and contract to contract along with the shrinking salary base. I could control my own life and destiny and manage my time the way I want, and be free of the corporate politics. I can do it!”
Your thoughts turn to starting a business from scratch. It sounds perfect, but you soon realise that this may be too much to handle and more than you thought. Your questions move to funding, marketing, sales, location, product, technology, customer service, staffing, surviving, and much more. You become overwhelmed and the dream fades yet again. You decide to move back into seeking employment and the hard realities of finding employment that pays you what you are worth, starts to bite. “My resume is incomplete, my skills are not what the employers are looking for, I do not want to uproot my family, I am going to be making less money,” or even worse you may be facing the hidden prejudice of ageism.
Then you ask yourself why not explore what the franchise world has to offer. You know it allows you to have all the freedom you wanted in business ownership but the support that you will so desperately need to build a business. You begin the search on line and are overwhelmed and not sure where to start because there are so many choices and so many types of franchises. What is right, and how do I know this will work for me? This is your first foray into looking for a franchise so what do you need to do?
These are the common circumstances that most people face when they start looking for a franchise business. They start with the list and make assumptions based on preconceived ideas that may not be valid. Are they missing the right opportunity? The problem is that they started in the wrong place. They look at list and try to fit themselves into the list. They have already given up the search agenda to a list and this represents the biggest mistake people make when investigating franchises. Let me share where you need to start.
It starts with you!
Here are 9 practical questions to use when looking for your perfect franchise business.
• Why are you exploring owning a franchise? It could be for any number of reasons from replacing income to adding income, to helping a family member, to gaining control, to having fun, to proving it to yourself that you can do this. Look at Tim Leiweke of MLSE who at age of 57 feels the need to prove he can run his own business. Find your reason.
• What Financial return will my Business have to deliver and when? Know your income expectations and be realistic, after all you are starting a business. Is it part of your financial and retirement plans? How much time are you going to commit to the business? Will your family be involved and will you be building equity. How much real time do you have before the business must make money? When do you want to start?
• How much can you afford to invest? You need to be painfully honest. You may have to forgo some things in the short term to get to where you want to be long-term. What financing vehicles are available for you to use? How will you sustain your base financial needs during the business ramp up? The key to failure in any business is to be underfunded. If you run your business looking behind you for money you will never go forward. Do these parts carefully and with deep thought and you will be properly grounded in the final outcome.
• What activities do you want to be doing long-term in your business? If you are a financial wizard and love to work with numbers and analyse, you probably should avoid things with a high direct sales content. Look at your past and determine what you were really happy doing at work and this should provide the clues to your long term role in your company. The chances of success will go up greatly if you are doing the things you love to do. How are you going to manage having someone doing the things you do not like to do? Starting a business takes time money and personal commitment and sacrifice so you better make sure you love getting out of bed to go do it. Remember it is your business to run and grow.
• What are the different types of franchise categories that interest you? Do you like retail and the idea of only a single or multiple unit business? What about food and do you want family dining or a quick-serve restaurant or a speciality food store? What about business to business or home service or automotive franchise systems? What about something totally unique? Learn the elements of these models and start to plug yourself into them financially and emotionally.
• With what type of Franchisor do you want to partner? Do you want the newest, hottest trend or should you seek out the more established or emerging concepts? This is really a measure of your risk tolerance.
• What do you need know about the franchisor? How will they help you build your business? How will they support and train you? How will they help you market the business? What is the technology involved? Will they Mentor you? What is the reputation of the company? Will the business continue to evolve? Will they select you or sell you a franchise? How will you be certain they will deliver? Get prepared for your due diligence now.
• Who will you seek as advisors to help me in your Investigation process? Will you use an independent advisor to assist you and what are his or her qualifications and experience in franchising or will you do this on my own? Do you need a franchise lawyer? What is the right business structure that will allow maximum profitability and protect your personal wealth? Who will help you with the business plan? Who will be your accountant? From whom among friends and family will you seek advice and why, what expertise are they bringing that you need to hear. Now you can look at your List and can narrow your decision and pick the franchise categories that fit the criteria that you have created. You are now in control of the program. In the end it comes to this last important question when you finally are making that decision to strap on the boots of entrepreneurialism through franchise ownership.
• Can you see yourself running, building, succeeding and enjoying running your business? If the answer is yes, do not let fear hold you back from your goal of business ownership. You have done the research you are ready to begin. Make sure your search is complete and the decision to move forward will be easier if it is well planned.
Joe G. White is Owner of MFR Inc. “The Franchise Rainmaker”. He provides professional advice to people looking to engage in franchise ownership. He can be reached at 647-724-0742 or firstname.lastname@example.org.
“Success through knowledge”