There is no day more special than a wedding, a baby being born or maybe even winning the lotto, though owning your business comes pretty darn close!
The freedom that comes with being a franchisee owner is freeing and terrifying, all at the same time. However, if you tap into a gap in the market and deliver a competitive service or goods that the market has been waiting for, then it may also be incredibly profitable. Consider these seven steps before you make this huge career move.
1. Pick the industry right for you, and the market
It can be hard enough to choose what to have for dinner, but deciding the franchising model in which you will pour your time, knowledge and funds? It’s a tricky decision to make. Like all things, the answer will not always present itself, so instead work backwards and identify which industry you are passionate about and whether that industry is likely to sustain itself in the future.
The market has seen exponential growth in the health and health-food market with a resurgence in juice and tea bars, vegetarian and vegan – this would be an space that savvy franchisee’s are playing in.
2. Make sure your finances are in order
The nitty gritty.. Money. Becoming a franchisee isn’t always as glamorous as you would imagine, and when the buck stops with you, it’s wise to be prepared with a rainy day fund outside of your projected revenue. Have realistic financial goals and targets, and prepare yourself for the fact that a return will not be always be assured after only a few years of operation.
Remember that things like training, registration and equipment are rolling costs so have a budget in place to facilitate those needs, and have your accountant triple check your finances before you become a franchisee.
3. Research your product, customer and location
Any business owner will tell you that you are only as good as your research. If you cannot answer when asked who your typical customer is, then it is back to the drawing board! Your business will ride the ‘New’ wave initially, with locals and the greater public curious about the new addition, but when that dies down – who is your customer?
Start by looking at who the other franchisee’s service, and is that possible in your location? A niche business is high risk (although high reward if you nail it), so make sure you are offering a product that a customer wants, in a location they can access it.
4. Who are your competitors and how will you compete?
Know who the big boys are and what makes them successful, and consider how your product measures up. Do some mystery shopping of your fellow franchisees and compare against your competitors. This sizing up may make you consider other avenues if your competitors have the monopoly, or it might fuel your drive if you find there is a big gap in the market.
Sign up to publications, blogs and seminars related to you industry and business-type, and try and engage influencers in the industry that you can bounce your concerns and questions off.
5. How will you benefit from this brand in question?
Brand equity is everything. It’s probably the reason you are even considering your own franchise with this particular company. While we would all like to just set up shop and slap our name on the door and start our own business, you may spend a lifetime just getting the market to remember your business name!
Opening a franchise with an established brand means that the market presence is there, and that when customers see your store and logo they know it and have a trust or distrust in it. Find how whether the brand you are considering has a positive of negative reputation and make a decision with your eyes wide open.
6. Are you ready to own your own business?
Leave your ego at the door, and answer this honestly. Are you ready to own your own business? Wanting something and being ready are two very different things, and eagerness will get you only so far. You will need capital, equity and business knowledge to steer your franchise through the good and bad times – especially when you experience both every day!
There is usually some hoops to jump through when starting your own business, so make sure you are ready to confront that and are eligible for all the qualifications, registrations and licenses that may come with the job.
7. What’s your long time goals?
Where do you see yourself in five years, and how about ten years? This question shouldn’t be only reserved for job interviews, you should ask this at every junction of a life change and continue to assess what you want long-term.
If you want to own a franchise but not operate, seek out a franchise in which this will be possible. Figure out what your long term goals are financially, professionally and personally – when you get an idea of what this looks like, make your move!
Conclusion
There is a lot of nervous energy and unanswered questions that come with being a prospective franchisee. The who, what, when and where have never been more critical, and the outcome never more important. Navigate these uncertain waters with yours eye wide open and rely on your research and your gut.