Are you thinking about escaping the demands and pressure that come with being an employee? Have you thought about going into business for yourself? Many entrepreneurs choose to purchase a franchise due to its significantly lower risk factor, as well as the support and guidance you receive along the way.
The first thing you may think as you entertain the idea of leaving full time work is, “Maybe I’ll buy a franchise!” The next question becomes, “But what type of franchise should I buy?” The sheer number of franchises available is nothing short of intimidating, but don’t worry, we are here to help.
If you’re in the market for a new business opportunity and are thinking about buying a franchise, below are 6 questions to ask yourself in order to find out how to choose the best franchise to buy.
1. Can you be a franchisee?
The truth of the matter is some people just aren’t suited to be a franchisee. A good franchisee is someone who has the entrepreneurial drive but is also willing to follow instructions and set rules (a kind of contradiction in itself). Becoming a franchisee means you need to have the skills to run a business or if you don’t, you need to know where to get them from or have a support team who can help you.
A good franchisee is a leader – someone who implements the system they bought into and turns it into their own individual business unit. The ideal franchisee is also someone who can lead and train their team to follow the systems put in place by the franchisor.
2. How much money do you have to invest?
Even if you have an idea of the type of business or industry you want to buy into, you need to strongly consider how much money you have to invest. It’s important to take an inventory of your capital to give you an accurate sense of the type of franchise opportunities available to you based on your budget. And, like with any business, you can’t expect to be profitable straight away. That’s why it’s vital that after purchasing a franchise, you still have enough money to live off while you get your business up and running and turning a profit.
3. How involved in the business can you be?
While some entrepreneurs prefer to be directly involved in their franchise, there are some who open a franchise while still working a full-time job. You need to consider your availability and how involved in the business you can afford to be or want to be. Try thinking about the days of the week you’d prefer to work. For example, if you only want to work weekdays and only during the day, you are already eliminating a lot of potential franchise opportunities out there.
4. What are your skills?
This might seem like an obvious thing to think about but it’s important to consider nonetheless. What are your skills? What are you good at? Take a good look at your skill-sets and what you’ve acquired in your past professional experience.
Also think about what you’re comfortable with and what you enjoy. Are you comfortable with sales and cold calling? Do you enjoy interacting with customers? Are you comfortable managing people? Do you enjoy being out in the field working with clients?
Having the relevant skills is a good place to start. You don’t need to be an expert from the get-go! Don’t pigeon hole yourself into the industries you worked for when you an employee. Franchising is a whole new ball game where you’re able to reinvent yourself and try something new.
5. Can you work with this franchisor?
It’s imperative you choose a franchisor you can happily and comfortably work with. You need to fit with their vision and values as you will be working with this franchisor for the length of your franchise agreement. Here’s a little secret: choosing the right franchise system is the most important part of choosing the right franchise to buy.
It should be one that suits your skills and abilities, and also ignites your passion. To choose the right franchise system, you’ll need to ask a lot of questions about a franchise’s system and processes. You’ll want to ask questions about set-up costs, the length of the franchise agreement, operating costs, how much support is given to franchisees and what type of training is available.
Most importantly, you need to consider if you can grow your own empire within the franchisor’s brand. Don’t look at just the initial opportunity – look at the opportunity for growth with this franchisor.
6. Is this franchise business profitable?
Last, but not least, you want to choose a franchise that is profitable. Interestingly, many people assume a franchise business will always be profitable. However, this is not always the case. There are countless factors that make a business profitable – this is also true when you are buying a franchised business.
While the franchisor will have some experience in choosing sites and areas within which to operate, it’s important you do your due diligence before you buy. Don’t assume that the franchisor has done this for you. It’s your responsibility. So how do you do your due diligence?
Start by creating a business plan on how you’re going to operate the business over the length of your franchise agreement. Prepare some budgets based on sales knowledge the franchisor might have. Do some research into your target customer and make sure they work or live in the area your franchise will operate.
While there are no guarantees when it comes to franchising, there is a great deal of safety in buying into a proven franchise system. Before you buy a franchise, make sure you take the above questions into consideration – your future success depends on it! Click here to find out more about ActionCOACH Franchise opportunity.
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