So you have decided to go into a franchise business but you don’t know where to start? It is natural to feel overwhelmed when you are at crossroads with a lot of options on the plate. This guide has been compiled to help you make decisions along the way to choosing the perfect fit for you.
Selecting the right franchise is the first crucial step to running a successful franchise business. Think over the details and do your research before rushing into any decision and you will end up successful.
Begin the process by asking yourself the necessary things. Here are a few questions and counter questions that will point you in the right direction.
Step 1: Know Thyself
You must have some motivation to go into the business. Everyone has a different reason for becoming an entrepreneur. What is yours? Depending on your answer, every franchise will give you different results. Is your goal to make money, to take a different turn in your career or to spend more time with the family? Will this franchise be the sole source of income for you? Determining the answer will help you pinpoint the type of franchise that will be good for you.
Step 2: Choose your Degree of Involvement
There can be two types of franchisees: those who are absent owners and those who are operators. Absent owners hire staff to do all the work and operators are more involved in running the business directly. They want to be engaged in its daily operations. So ask yourself which you would rather prefer. Do you want to exert more control and have a day job or do you want to lead from the backseat? Do want to be the manager or manage managers? Your preference will eliminate options not relevant to you.
Step 3: Count your Piggybank Cents
You have to be very realistic here. Start making an inventory of your capital investment. The money you have or are willing to invest will automatically cancel out franchises not suitable for your conditions. Experts recommend possessing at least six months worth of capital for your living and expenses. Don’t stretch it out too much for your own sake.
Franchises can vary greatly in terms of costs—from less than $10,000 to more than a million. Also, do not blindly fall for franchises that advertise themselves to be of a few thousand dollars. Cheap franchises can turn out be pretty expensive. The market might be too saturated, competition could be more and you could be left with no business to resell in the end.
Step 4: Decide on an Exit Strategy
How long do you want to run the franchise? Is this a passing fancy? Will you abandon it after a couple of years or do you want to pass it down to an heir? It is important to keep the end in mind before you start. It is also important to answer this question now than later, because some franchisors have restrictions on selling.
With the basic questions answered, you will be able to filter out lucrative franchise opportunities that might not have been a good fit for you and focus on the ones that meet your requirements instead.
Brad Sugars founded the brand Action International in 1993 when he realized there was a disconnect between business advice and implementation. The answer was Action! Brad Sugars created a business coaching company so that business owners throughout the world can realize their goals in business. Today the company is known as ActionCOACH. To learn more about business, visit Brad Sugars Review blog!