Wednesday, October 15, 2008
The concept behind franchising is to take a systematic, proven formula for success and pass it on to others who can replicate that plan and produce the same successful results. In theory, it sounds like the perfect solution for creating a successful business. Reality, however, can be quite different. There are variables in all franchises which can contribute to, or take away from, the overall success of a business. Buying a franchise requires a substantial investment of both money and commitment from you. It is not designed for everyone. There are three important factors you must consider before purchasing any franchise system.
If you are looking for the perfect franchise business opportunity and are committed to building a long-term business, start with yourself. The most important consideration when buying a franchise is finding a system that works for you. Do you feel comfortable selling the franchise product or service? You need to fully understand what is required to run the franchise in terms of ability, experience, and knowledge. Find a franchise business opportunity that is suited to your personality and core skills. Thoroughly investigate how the franchise should be run, including:
• how much time will be required per day and per week; • what special or ongoing training will be needed; • how many, and what type, employees you will need; • what your ROI (return on investment) will be and how long it will take before you see a profit; and, • how much personal involvement you need to have in the business in terms of back-end administrative work, frontline customer relationship building, and employee supervision
You need to be prepared for any and all of these scenarios. You may hire employees to fill in the gaps; but remember, in the end it is your business and you have bottom line responsibility. No franchise system is designed to run your business for you. Franchise systems which are designed to help franchisees be successful will guide you forward, but leading the action is entirely in your hands.
Your second consideration when looking for a franchise business opportunity is how capable you are of running a successful business. Again, a thorough understanding of what is required is imperative. Some people function better as employees and others thrive in leadership roles. Do you have a natural talent for business? Do you understand your strengths and how to leverage them for creating and sustaining success? Skills and knowledge can be learned, but intuition and natural ability are innate. Do you have experience in running a business and are you willing to pay the price for success?
One major misconception about franchising is that if you have money to purchase the franchise business opportunity, you are in essence "buying yourself a job." The truth is if you need a job, don't buy a franchise. A job provides you a weekly or monthly paycheck. There are no such guarantees in franchising. A franchise business is designed for long-term investment. When properly run, a franchise can have substantial payoff over time. It is important to investigate and understand what your anticipated payoff will be and how long it normally takes to start seeing a return on your investment. As a franchise owner, you will not be compensated in the same manner as your employees.
The third consideration in finding a franchise business opportunity is to investigate the franchisor. Many franchise businesses have been negatively impacted by franchise operators who do not support their franchisees. You should be most concerned with how initial training and ongoing support will be provided and how the franchisor intends to help you become successful. Receiving excellent training is only the starting point. It is unlikely you will purchase a franchise that you already know how to run. Proper training is essential, and improper training will sabotage your success from the beginning. Ongoing training is also essential. Knowing your product or service and keeping abreast of new developments or technology will help ensure your success.
The price you pay for the franchise does not ensure success. A more expensive franchise can still fail if certain factors are not in place. Look for a franchisor who is committed to hiring strong business operators and making their franchisees successful. Many franchisors sell franchises to people who are not suited to their business. These franchise operators are focused on expanding operating locations and easily lose sight of how successful their existing franchisees become. Lack of focus and support from franchisors is the most common mistake made in franchising and contributes to failure, both on the part of the franchisee and the franchise as a whole. Everyone suffers when franchisors operate a numbers game only.
In conclusion, the key to finding a perfect franchise business opportunity is to first look at yourself to make sure you are a good fit for the franchise system. Investigate what is required to successfully operate the business and decide if you are capable of meeting the challenge. Find a franchisor who is dedicated to training and developing strong business-minded individuals and will provide ongoing support and training. Choose a franchise system that is involved in advancing your operation. If all of these ingredients are in place, you will have a better chance of being successful.
If you are looking for the perfect franchise business opportunity and are committed to building a long-term business, start with yourself. The most important consideration when buying a franchise is finding a system that works for you. Do you feel comfortable selling the franchise product or service? You need to fully understand what is required to run the franchise in terms of ability, experience, and knowledge. Find a franchise business opportunity that is suited to your personality and core skills. Thoroughly investigate how the franchise should be run, including:
• how much time will be required per day and per week; • what special or ongoing training will be needed; • how many, and what type, employees you will need; • what your ROI (return on investment) will be and how long it will take before you see a profit; and, • how much personal involvement you need to have in the business in terms of back-end administrative work, frontline customer relationship building, and employee supervision
You need to be prepared for any and all of these scenarios. You may hire employees to fill in the gaps; but remember, in the end it is your business and you have bottom line responsibility. No franchise system is designed to run your business for you. Franchise systems which are designed to help franchisees be successful will guide you forward, but leading the action is entirely in your hands.
Your second consideration when looking for a franchise business opportunity is how capable you are of running a successful business. Again, a thorough understanding of what is required is imperative. Some people function better as employees and others thrive in leadership roles. Do you have a natural talent for business? Do you understand your strengths and how to leverage them for creating and sustaining success? Skills and knowledge can be learned, but intuition and natural ability are innate. Do you have experience in running a business and are you willing to pay the price for success?
One major misconception about franchising is that if you have money to purchase the franchise business opportunity, you are in essence "buying yourself a job." The truth is if you need a job, don't buy a franchise. A job provides you a weekly or monthly paycheck. There are no such guarantees in franchising. A franchise business is designed for long-term investment. When properly run, a franchise can have substantial payoff over time. It is important to investigate and understand what your anticipated payoff will be and how long it normally takes to start seeing a return on your investment. As a franchise owner, you will not be compensated in the same manner as your employees.
The third consideration in finding a franchise business opportunity is to investigate the franchisor. Many franchise businesses have been negatively impacted by franchise operators who do not support their franchisees. You should be most concerned with how initial training and ongoing support will be provided and how the franchisor intends to help you become successful. Receiving excellent training is only the starting point. It is unlikely you will purchase a franchise that you already know how to run. Proper training is essential, and improper training will sabotage your success from the beginning. Ongoing training is also essential. Knowing your product or service and keeping abreast of new developments or technology will help ensure your success.
The price you pay for the franchise does not ensure success. A more expensive franchise can still fail if certain factors are not in place. Look for a franchisor who is committed to hiring strong business operators and making their franchisees successful. Many franchisors sell franchises to people who are not suited to their business. These franchise operators are focused on expanding operating locations and easily lose sight of how successful their existing franchisees become. Lack of focus and support from franchisors is the most common mistake made in franchising and contributes to failure, both on the part of the franchisee and the franchise as a whole. Everyone suffers when franchisors operate a numbers game only.
In conclusion, the key to finding a perfect franchise business opportunity is to first look at yourself to make sure you are a good fit for the franchise system. Investigate what is required to successfully operate the business and decide if you are capable of meeting the challenge. Find a franchisor who is dedicated to training and developing strong business-minded individuals and will provide ongoing support and training. Choose a franchise system that is involved in advancing your operation. If all of these ingredients are in place, you will have a better chance of being successful.
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