The downturn has inspired a new generation of entrepreneurs – from people starting their own businesses, to those considering franchising as a means of making their fortunes.
If you are thinking of investing in a franchise there are some key considerations that you need to make.
The initial consideration is whether franchising suits you. If you are someone with a strong entrepreneurial spirit or who wants to re-invent the wheel, then you may not be suited to franchising, as one of the main benefits will be to closely follow the proven system.
Tried And Tested
Investing in a franchise will reduce some of the risks in setting up a new business. The investor is buying a successful business model that has been developed and proven over the years; the franchisor has already made the mistakes in the early days and learnt from them before launching the franchise opportunity.
This isn’t an absolute guarantee of success. As with any business, it is important to evaluate the strength of the brand and the long-term viability of the business. Unproven systems that have not operated a successful pilot scheme carry a significantly greater risk to the investor. There is no substitute for thorough research and investors should leave no stone unturned in assessing their options.
It is easy to eliminate the opportunities which are outside your price range, or those that won’t offer you the financial return you need. You will then need to scrutinise a range of franchises to see which is most suitable for you. It is sensible to begin your research with the British Franchise Association (bfa) member franchise brands as they will have passed a rigorous accreditation process. Another efficient way to research is to attend franchise exhibitions.
Consider what you are good at and what you enjoy doing. You don’t have to stay in your current industry, but you should be looking at franchises where you can use your existing skills and experience. Your family life and personal circumstances are another important consideration; ensure your loved ones are involved in the process from the outset. There are inevitably going to be lifestyle changes when starting a business, including working longer hours, added pressure and financial uncertainty, particularly in the early years. Running any business – whether it’s a franchise or not – requires a good deal of self motivation and as rewarding as it can be, it can be challenging too.
Coming Of Age
Once the franchisee has survived the start-up stage, confidence should begin to grow as they establish their customer base. They will gradually become less reliant upon the franchisor for guidance on how to operate the business, although they have the comfort and security of knowing that advice is just a phone call away. Whilst franchising may not necessarily be the right choice for everyone, a proven franchise model can provide a business with a supportive framework, access to quality advice and reduced risk – an attractive combination for potential business owners.