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So you have decided that 2019 is the year that you want to change your life and become a business owner. What could be better? It is worth pointing out that 50% of start-up businesses fail within the first four years, most commonly due to inexperience or incompetence. Starting a business from scratch means you're entering into a venture with no guarantee that it will be successful.
Running a franchise offers all the benefits of being your own boss and managing a successful business – without the financial and personal risks that a start-up business brings. As a franchisee, you work with a proven and effective business model and utilise the support and training provided by your franchisor. You're given the tools to make your business succeed and you're able to work in a way that suits your lifestyle, such as working flexible hours, working from home or working on a part-time basis.
Starting and operating a franchise business is a challenge, and it takes a certain type of person to succeed. Before you jump into judging and analysing franchises to buy, perhaps the first step is to analyse your own strengths and weaknesses. Be honest with yourself about where you are at right now and what skills, experience and time you're able to offer a business venture.
The following seven elements are all recognised success factors for franchising. Have a read of these and see which ones resonate with you!
People Skills
As a franchisee, you are likely to have dealings with three very important types of people: your franchisor, your customers and your employees.
Your franchisor is looking for a business partner who is willing to get on with the job without causing any hassle. The franchise theory is based upon a strong and open relationship between the franchisor and franchisee, and this theory always relies on two-way communication. Therefore you must be willing to keep in contact with your franchisor often, particularly at the beginning when the business is still being set up. Organising regular meetings or visits is a good idea so that you both remain on the same page with regards to how the business is developing and what kind of resources you may need to help it flourish.
The other two relationships are also significant. A lot of franchises require customer interaction, often on a daily basis, and if your services are provided with charm and a smile then your customers will return. It is important not to be shy – a franchisee is traditionally confident and outgoing, and this is necessary if you are going to be employing staff or dealing with the public. If you would prefer not to be in the public eye, it is advisable to choose a one-man-show such as an internet franchise, where you can work by yourself and feel more comfortable. Another option for a more introverted business owner is to take on an extroverted business partner who can handle people-facing tasks such as attending meetings and meeting customers.
Financial Resources
You will have to calculate the level of capital investment needed to buy a franchise, as well as other expenses such as loss of employee benefits and living in the initial non-profit phase for at least one year. By making a balance sheet of your liquid cash resources, assets and liabilities, you can see if you have the financial resources required. If not, it is necessary to work out how much you can afford to borrow. Banks often look favourably on established franchises and are more willing to lend to a proven brand and business model, but it is usually expected that you provide at least one third of the startup funds yourself.
A Passion for the Business
With 93% of franchise units in the UK reporting profit, franchising is the safest way to start your own business. However, it is not going to happen overnight. Hard work and self-motivation are still required before the benefits can be reaped, and it takes passion and dedication to keep this up.
It's important to choose a franchise opportunity that excites you and the great news is that there are franchises to be found in a variety of industries, including property, accounting, care and travel. Make sure that the dynamics of the business – how it works and the target market – excite you and that you're able to make a meaningful contribution to the business.
Enthusiasm is also important for marketing. If you enjoy running the business and creating its products or services, then this will be evident to customers who too will be converted and come back for more. A positive attitude will inspire staff, make them more eager, and help you to get on with them.
Willing to Follow Rules
As a franchisee, you have to be a good student. This involves taking instruction from your franchisor, so you have to be coachable and willing to learn. A secure business model is already established, and, through your franchise contract, you are legally bound to operate it as instructed.
This means all fragments of your business – from packaging to accounting – need to be exactly the same as the franchisee operating in the next county to yours. This kind of setup guarantees that customers will always have a similar experience, whether they live in John O'Groats or Bournemouth.
The advantage of this is that you are promised support and guidance from other franchisees and from your franchisor as you follow a clear and proven business plan. The disadvantage is that if you feel there is a flaw in the system, you cannot just fix it. You must propose the change to your franchisor first, and wait for their decision.
Support from Your Family and Lifestyle
Setting up any business takes time and money, and it is essential that you have support from your family. Prepare them for the changes that are going to take place and make sure that they will be able to handle your higher level of absence, if it occurs. When your business is in its early pre-profit stage, it may be preferable for your partner to stay employed to ensure that there is a steady source of income.
Good Health
Becoming a franchisee means taking a moderate business risk and then dedicating years of your life to making it work. This type of commitment requires a lot from you – physically, mentally and emotionally – so it is important to bear this in mind as you enter into a franchise contract.
Some franchises require you to work long hours – including weekends and holidays – especially in the beginning. If you have low energy then it may not be practical to try and keep this up for long. Instead, choose a franchise that allows you to operate part time.
Mental strength is just as important as physical. Running your own business comes with psychological pressures and you must be able to cope with stressful situations such as strong competition, teamwork, staffing issues and sudden changes. When mistakes are made, you need the resilience to recover quickly and remain optimistic. This will stand to you as the business progresses.
Goal Orientation
Unless you have a clear vision of the business you are trying to build, you cannot hope to build it. Happily this is where franchises have the advantage: your long-term business plan and all your aims have already been set down in writing for you. Therefore, as a franchisee, you must be able to look at what you need to accomplish and decide how you are going to do it, converting your dream into short-term, every day goals. These goals have to be taken seriously – no procrastinating! You also need to have meetings with your employees to make sure they understand what these goals are and how everyone is going to work as a team to achieve them.
Browse through our diverse range of franchise opportunities right here! Your next business venture could be just around the corner.