Legend has it that there is an old Chinese curse – ‘may you live in interesting times’ – a curse rather than a blessing, as upheaval and uncertainty can be scary and unsettling.
We have certainly been living in ‘interesting times’ with so much change in 2022 to date. Much of the resulting upheaval has been outside our control, which can feel very negative. This does seem to have had an effect on franchising in the UK, at least as far as bringing in new people to become franchisees, as people hold back from making such a life-changing decision.
And yet, across the many sectors franchising covers, we continue to see fantastic growth and stories of success as individual franchisees grow and develop their businesses. Franchising really does have something for everyone, with industries including care at home, fast food, gyms and fitness, automotive and van-based businesses, children’s education and fitness, as well as theatre schools. There are also office and domestic cleaning franchises, signs and printing, recruitment, even chimney sweeps and window cleaners.
The British Franchise Association, the industry standards trade body, celebrate successful franchisees through their annual awards which are sponsored by HSBC.
These franchisee stories showcase successful franchising. Every year there are new successes to applaud and stories to hear and this could counter some of the negativity which could be putting you off considering a franchise of your own.
Although it is easy to hold back and wait for things to ‘calm down’ and life to ‘return to normal’ we just don’t know when this might be. It seems as though we’ve had constant upheaval over the last few years, so at some point, we may have to accept that this is how things are going to be.
So here are a few pointers about how to reduce your risk if you are going to take the plunge into owning your own business via franchising.
Do your research
This can’t be stressed highly enough; you should take the time to go through everything carefully. After all, you will be signing a legal agreement for probably a five-year term or more
Your research needs to include not just the franchisor and their ability to support you but also, the territory and scope of your potential business. The British Franchise Association provides resources to help prospective franchisees, including a detailed list of questions to ask a franchisor. Click here to view.
Existing franchisees can also be a useful source of information, ask them about their experience of starting their franchise and for tips about the challenges. Look at the territory or area which will be your ‘patch’, making sure that there is a strong market for the products or services you will be looking to offer. What is the competition like, how can you differentiate your business from the crowd?
Plan ahead
Think about your own finances first, how much would you need to take out of your new business to cover your own living expenses and any existing borrowing? Think about what your business will need to operate, will you need premises, vehicles, stock, equipment, software and hardware, for instance?
Prepare your financial forecasts, often with the help of templates from the franchisor. Examine costs, sales and cash flow to see what level of funding you might need. One of the ways to reduce risk is to ensure that you have enough working capital to cover the business through the initial launch and growth stages. If you are short of cash, that will hold back your growth and could lead to the business struggling to succeed.
Follow the rules
Surprisingly, some new franchisees can find it hard to follow the system and structures that the franchisor has set in place to train and launch newcomers to their network. This can be something to look out for in yourself, especially if you have previously worked in senior corporate roles and have been used to being the one to give the instructions. Don’t try and ‘reinvent the wheel’ as soon as you start, there is probably a good reason for things to be done in the way you have been trained so follow the model and take advice from your franchisor and their support staff.
Pick something you love!
You will need to put your full commitment into any new venture. To give yourself the best chance of success, you must work hard to make the business achieve its goals. So, with that in mind, spend some time finding a franchise you will enjoy running! This is key to your long-term success, especially if you have been unhappy in your job or pushed into redundancy, during or after the pandemic.
Franchising can be a great opportunity to build a successful business of your own, whilst reducing the risks of going it alone.
If you need some inspiration, have a look at this year’s bfa HSBC Franchisee of the Year finalists Click here, and don’t let the fact that we live in ‘interesting times’ put you off going for your future success!
