With the Centre for Economic Business Research Forecasts1 predicting that the number of new businesses in the UK will increase by 342,000 in the next two years, is now the time to be planning your exit strategy and your entry to becoming a franchise owner and if so, is there a best time to make that leap?
Whether we are talking about the best time in your life or the best time in the year, identifying the optimum juncture to invest in a franchise is worth some thought, as you consider your next career move. Ryan White, managing director of BFA (British Franchise Association) pet care franchise, We Love Pets, gives us some great advice along with some hints and tips for preparing to become self-employed.
Undoubtedly, the best time to invest in a franchise was about 6 months before you got to the point of hating your job. By the time you wake up dreading the day or simply non plussed by it, it’s time to go, and probably was a good few months before. In my experience, you need to get to the point that the pain points in your current situation outweigh the enjoyable moments. Are you there yet?
How ready are you to invest in a franchise?
99% of people who come to see me to buy a franchise think they are ready to buy, and 50% of those get a very big shock when I turn them away and tell them to come back again in a few months’ time when they are in the right head space. A potential franchisee who is ready to invest has to be absolutely raring to go. Most franchisors won’t worry too much if you don’t have all the right finances in place, there are many ways to cut that particular cake, but if we can’t see the passion for self-employment in your eyes, then you aren’t ready yet. Some go away, have a good think then come back again and smash it as a franchisee, so being rejected first time doesn’t mean you won’t make a great franchisee eventually and we aren’t saying ‘no’ forever, but it is a sign of a good franchisor, one who isn’t only worried about selling another territory, but is also concerned about how well you will do in the network and if you are going to give it your all.
Are franchises seasonal?
Some franchises are definitely seasonal, and you need to bear that in mind when planning your investment. Of course, the franchisor will give you advice on this but if at all unsure, if you feel they may be trying to hide the truth to make the sale, talk to the current franchisees, ask them about the seasonality of the job. Also remember that some franchisors only train new franchisees at certain times of the year, so make sure you take that into consideration. If the business is seasonal, make sure your start date aligns with that, so you are trained up and ready to hit the ground running before things get busy.
Is there a best time in the financial year to buy a franchise?
According to Freeagent.com2: “In the UK, the tax year (aka fiscal year) runs from 6th April to 5th April the following year. If you’re going to run your business as a sole trader or a partnership, very soon that will be the 12-month period that you’ll prepare your accounts for and include when you submit your Self-Assessment tax return (which is due on 31st January every year). So, aligning your business’s accounting year with the tax year is often the easiest way to keep your bookkeeping in logical order. The first day you start trading (i.e. when you make your first sale or start working on your first project) is considered your business’s start date – think of it like a birthday. If you wait to start trading until after 6th April, you’ll benefit from being able to wait a whole year before you need to file your first tax return – that’s assuming you don’t already need to file one for other income you need to declare to HMRC.”
But as the saying goes: “Don’t let the tax tail wag the dog.” If you are ready to invest in your own franchise and become self-employed, get on with it, don’t wait for the 7th April if you are chomping at the bit in November.
Be prepared – and get studying
Let’s say you’ve identified a franchise you’d like to buy but for one reason or another you can’t start training for a while, why not use that time wisely to make sure your office skills are up to date? A quick google search will show you that there are hundreds of free courses available via sites like www.coursera.org or Google Garage to help you become proficient in all the necessary platforms such as Word or Excel. They also cover basic management and HR courses that will stand you in good stead as you grow your business. Although all the training you’ll need to run the actual business will be given, if you’ve never used an excel spreadsheet or a word document, then spend some time mastering the basics before you become a business owner.
Right time – Right Franchise – Right now
If you have the right personal attributes and frame of mind, investing in a franchise could be great for you and I wish you lots of luck. Make sure you visit the BFA (British Franchise Association) website www.thebfa.org to see the hundreds of different franchise opportunities available, safe in the knowledge we have all had our business models scrutinised for professionalism and sustainability and always take legal advice from a BFA specialist franchise solicitor; Ted who did your conveyancing won’t have a clue about a franchise agreement and it’s vital you and your new business are protected.
2 https://www.freeagent.com/blog/start-a-business-this-new-tax-year/
