Starting a Business? Control Your Risk With a Franchise!!

Starting a Business? Control Your Risk with a Franchise!!

So you want to start your own business but don’t know where to start? Maybe you’re concerned about risk, lack of experience in the specific business that caught your fancy or are nervous about blazing an entirely new trail.

For the thousands of folks looking to gain control over their working lives each year, a franchise offers some compelling advantages. For one thing, instead of beginning your research
by talking to people operating a similar business, you can learn the ins and outs from people in the very same business. A franchise operation offers a veritable network of support, plus a treasure trove of statistics and operating history is available to give you a leg up in the marketplace.

By contrast, when you start an independent business, you must invent your concept and innovate your own marketing, inventory and accounting controls and countless other procedures from scratch, some ahead of time, and, inevitably, some on the fly as you go along, which will likely significantly impact your bottom line as you get started and optimize your systems.

For some, therein lies the excitement. These are the folks willing and able to accept far more uncertainty, but many others prefer a less bumpy path.

With a franchise, many of those risky variables disappear since the franchise company has already figured out a system that works. The tricky part comes in selecting a franchise that’s right for you and has a good track record of success, which can be challenging in an arena in which about 800,000 franchise establishments operate in 75 different industries, generating a $2.1 trillion impact on the domestic economy, according to a 2007 study by the International Franchise Association.

Getting some assistance is as easy as locating a franchise coach who can help steer you toward reputable franchise companies. Of course, like everything else associated with your own business, the responsibility lies with you to do your due diligence before signing your name to any dotted lines.

We suggest you start with these five steps to narrow down your franchise search and maximize your success with your new business:

Conduct a personal Inventory
Write a list of your professional and personal skills. Then write a wish list of the types of businesses you would like to operate and the types of skills necessary to run these businesses. See where they intersect!

Research Possible Franchises
Check the website of the International Franchise Association for a comprehensive listing of franchises that suit your personal profile. Consider consulting a franchise coach, who will already have vetted many franchise companies.

Zero in on a few franchises
Request a copy of the franchise disclosure document for your selected list of franchises and read through these for: the franchisor’s background, initial and ongoing costs, litigation history, plus information about the types of training and support they offer, as well as their method for advertising, including who pays.

Interview Existing Franchisees
Learn about the types of support offered by the franchise companies, how it helps them, and find out how much their businesses are earning to check if it matches information in company disclosure documents. Franchisee profits can vary widely due to geography as well as other factors. You want to find out what it takes to succeed with this franchise.

Interview former Franchisees
Learn why things didn’t work out for them. You might get an earful about the franchise company’s shortcomings, or you might hear the franchisee wasn’t really cut out for this type of
business.

The knowledge you gain by going through this research process is indispensable to you in whatever business you start. As you’ve likely heard before, success happens where opportunity meets preparation. And your research is critical to your preparation.

Dan Citrenbaum is a franchise coach and consultant to entrepreneurs, who helps people achieve their dreams as small business owners. He has a proven track record helping people select and buy a franchise or existing business. Contact Dan at dcitrenbaum@gmail.com or at (484) 278-4589 and view his company website at www.entrepreneuroption.com.

©Dan Citrenbaum 09/2014

Shopping for a Franchise? Stay Away from the Next New Craze!

Shopping for a Franchise? – Stay Away from the Next New Craze!

Cupcakes are all the rage these days in franchising, and while they make a pretty window, their long-term appeal may be fleeting. Frozen yogurt is also making a strong comeback after almost disappearing some years ago. But it doesn’t take much to saturate the market, and you know it’s a fad when it fizzles out fast.

What’s hot and what’s not may be a typical headline on a fashion spread, but you probably want to stay away from fads when it comes to franchises. Sort of like the flavor of the month, when folks get tired of it, they stop buying.

A better focus is to pinpoint what people need. After all, people are not likely to buy specialty cupcakes on a regular basis or continue buying frozen yogurt when the weather turns cold, which are just a couple of reasons why these businesses tend to come and go as often as the weather changes.

Some of the best opportunities are with franchises in well-established markets where the field may already be crowded. But there’s a lot to be said for the tried and true. After all, savvy buyers choose the economic sectors with consistent growth.

When starting a new business, your goal is to capitalize on long-term economic trends -as opposed to the flashy fad. Case in point: the International Franchise Association projects business and commercial and residential services will be the fastest growing sector of the franchise business in 2014.

The specific areas we like include health care, temporary staffing and other service businesses.

Solid Trends for Franchises

Health Care

The health care industry has experienced good growth in recent years, and, as the baby boomers start to retire, the prospects for the future may even be better. You can find franchises that specialize in modifying homes for seniors, as well as supplying home health care aides.

Temporary Staffing

As many companies cut jobs as a result of the Great Recession and a slow growing economy, they now rely more on temporary or contract workers. So the demand for temporary staffing services is on the rise with no clear end in sight.

Service Businesses

A panoply of service businesses are thriving, particularly ones that tend to be recession resistant, not easily outsourced overseas or conducted over the internet. Examples include firms that conduct workplace drug and alcohol testing, mandated by the government for some industries, and companies specializing in the restoration of water damaged homes, since disasters, like floods or broken pipes, regularly occur without regard to our economic cycle.

While you don’t want to be seduced by the latest fad, you do want to anticipate future trends in the American economy. A strong business idea fulfills a deep-seated market need, which, as we know, some people may have not yet realized. Who would ever have guessed 20 years ago that Americans would now be so addicted to their espresso drinks!

Dan Citrenbaum is a franchise coach and consultant to entrepreneurs, who helps people achieve their dreams as small business owners. He has a proven track record helping people select and buy a franchise or existing business. Contact Dan at dcitrenbaum@gmail.com or at (484)278-4589 and view his company website at www.entrepreneuroption.com.

©Dan Citrenbaum 10/2014