How to Choose a Franchise Business
Franchise Pizza Buffet (Photo credit: triple nine media)
These days everyone is looking for a way to make more money. Starting a new business would be a great way to make some extra money. You can go the way of the self made business or what people feel is an easiler way, a franchise. The difficulty of starting a business from scratch is that you may not have an idea which business to start or you have an idea but just don’t have the business experience to know what to do first.
Opening a franchised business removes all the start-up problems. The franchise provides the plan and all you need to go right into an already established business with a well known product. All the creative and foundational work is done for you and this is what attracts many business people. They like the extra hand holding and guidance. They have seen the business already working and feel it could be something they would like to do.
When starting a new business from scratch or going the franchise route, the steps are some what similar.
1. There are many different franchise opportunities and with each there are different criteria and financial requirements. You need to pick a franchise that you can afford. Be sure to obtain a complete list of all franchise fees, taxes, licenses, payroll and employee benefits, for at least one year. Either have all necessary cash or financing ready to pay expenses for the first year because when becoming established, you may not make much income to pay all expense. Having a budget for the first year and seeking financial and accounting help in advance will help guarantee success.
2. Pick a franchise that matches your likes and goals. The first years will be difficult, having a franchise business that you enjoy will help you get through the tough times. When you are in a franchise that you do not particularly like but pick for the financial reward and it starts to have problems you may not be so motivated to see the process through.
3. Have marketing research done before putting any money down on a franchise. See if the area will support the business you are starting. Do you have the population and need for the franchise you are starting. Does the franchise have am appeal and provide something needed in the area?
4. Visit other franchises owners. Talk to people who have already taken the steps you are about to take. Ask them about any possible problems that may come up. Ask them about the mistakes they made and what they learned from them. Even if you have to travel this on tip is the most important one because the people you talk to will help you make the final decision in pursuing this franchise business. Making this connection sets up a future friend/contact that you may later need for help or advice.
5. Review nationwide ratings on the franchise. The International Franchise Association is a trusted site for quality ratings on all franchise opportunities.
Get as much information as possible about the franchiser’s history, number of franchisees, support provided and the skills needed to run your franchise business using the franchiser’s tools and training.
6. Compare different franchises in the business you would like to go in. Compare start up costs, expense and income information from more than one franchise in the niche you want to pursue. Check for for different contingency’s in the franchise disclosure documents. Find out what the procedures are for the different problems or circumstances the business may face.
It’s better to go slow when choosing a franchise business. They are usually very expensive and a lot of work to get started. If done right with a lot of hard work added to that a little luck, you may have a very profitable business someday.
Category: Business
Comments (1)
Trackback URL | Comments RSS Feed
Sites That Link to this Post