Nine Things to Know Before Buying a Franchise: A Personal Inventory
Before you start looking seriously at franchises that might be your ticket to a future career as a business owner, you need to figure out answers to key questions that may make the difference between success and failure.
You’ll need to think about who you are as a person and where you are in your career journey. A little self-reflection will go a long way toward helping you choose a franchise operation that is the right fit for you.
Does your family support you?
As a franchise coach who has helped many business owners buy franchises, I think this is by far the most important question on the list. With the commitment and time required of an independent business owner, particularly during the start-up phase, if your spouse or other critical family members are not on board, your answer is to stop here. If you feel this is truly a passion for you, you’ll first have to bring your family on board. Just think, if you can convince those who know you best, selling future clients will be a piece of cake.
What types of businesses interest you?
The range of franchises available to you is practically as wide as your imagination. Write a list of your strengths and weaknesses. How do they match your interests? A franchise coach can help you with this process.
How much time and effort are you willing to dedicate to your business?
It’s not an all-or-nothing question. Some franchises require fewer hours of work than others. But you need to know what you require. Is it a 24-7 commitment or maybe something you can combine with an existing career?
Are you qualified to manage a business?
Be honest with yourself, and at the same time don’t shortchange your skill set. Many skills developed in first careers can easily be adapted for second careers. So when you develop your list of skills, think globally. If you have experience managing employees, you might want to choose a franchise that capitalizes on your management strengths. On the flip side, if you have sales experience or have an outgoing, positive personality, you might consider a business where the owner is often involved in sales. The main point is to play to your strengths.
How much money are you prepared to invest?
And this doesn’t just include the upfront franchise fee. Depending on the business type you need enough money on hand to last from three to 12 months running your business. This might also include the costs of setting up an office, paying rent, and covering other expenses until your business reaches profitability.
Are you comfortable taking on debt?
This question is important when considering the price range of a franchise to consider buying. Sometimes, it may be worth taking on a little debt to get the business that excites you the most. For this question, a franchise coach can be an invaluable resource.
How quickly will you need income from your franchise?
Do the math. The most important thing is for your expectations to be realistic, so you can afford to start your business properly and get through the building phase.
Do you like following a system?
A franchise will provide systems for their franchisees. If this makes you uncomfortable and you’re the sort of person who prefers to march to the beat of his own drummer, this may be a stumbling block. Learn what the system is and plan to follow it. If you don’t expect to follow the system, then simply don’t buy the franchise.
How do you prefer to solicit new customers?
Starting your business often requires building a clientele — marketing your service to new customers. Some people are comfortable cold-calling or direct mail marketing, but others won’t enjoy that type of work. Many businesses, however, don’t require the owner to be a salesman. It’s critically important you choose a franchise that doesn’t make demands on you as an owner that you’re not prepared to deliver.
You can never do too much research before buying a franchise. So after you complete your personal inventory, you can start your nitty gritty business research.
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 firstname.lastname@example.org or at (484)278-4589 and view his company website at www.entrepreneuroption.com.
© Dan Citrenbaum 2019