Self-employment may be quite rewarding. But before you start on this life-altering trip, you must speak with the most significant person in the room… YOU

After 20 years in the franchise market, I have learnt that you need carefully examine the following ideas. Purchasing a franchise may be difficult even under the best of circumstances. So how do you select the best option?

Franchising has become a lucrative industry. With over 950 franchise businesses in the United Kingdom and Ireland and countless others across the world, franchising is currently one of the most successful methods to launch a new business. Business format franchising is an effective model for those who wish to “be in business for themselves – but not by themselves” as recognized by banks as the safer and wiser method of launching a new organization.

Only some people are suited for company ownership. For individuals who are unable to develop the next great thing, franchising does give a viable business strategy. People who are not true entrepreneurs but nonetheless desire to be their own boss and manage a business on their own. Prior to investing your hard-earned money in a company style franchise, there are, however, a number of factors to consider. Below are the six most important concepts to know.

The value of a reputable brand

Starting a business from beginning may be challenging. It might take years for people to learn who you are and where your firm is situated, and even longer to establish a history of positive customer reviews and brand reputation.

Compare this to the purchase of a nationally recognized Franchise brand. You instantly become a member of that brand’s family. Instead of having to recreate the wheel, you inherit the brand’s history and acquire immediate reputation. The good news tales that the franchisor has laboriously developed over the years become your good news stories. This is the power and value derived from investing in a reputable brand, and it is priceless.

Are you able to follow a recipe?

Why do so many individuals acquire cookbooks? You must adhere to the recipe if you wish to cook like a great chef. The recipe, often known as the formula, is the key to success in franchising.

Ask any bank or national/international franchise organization, and they will tell you that the two leading causes of franchisee failure are failing to follow the formula and being undercapitalized!

Franchising is all about adhering to the model established by the franchisor. Similar to creating a great cake, the franchisor has devised a recipe for success. Using the same components and cooking them for the correct period of time at the correct temperature will result in a good end product.

The franchisor has founded and developed an established business. The formula is documented in the manuals and training program administered by the franchisor. If you follow the system and add the secret ingredient, effort, you should also achieve success.

Is there a market in your nation?

This appears to be stating the obvious. You must ensure that the firm you intend to acquire has an established market. It may do exceptionally well in the United States or in whichever nation the master franchise is headquartered but will this translate to your country?

You may be the first to introduce a new concept into the country and make a fortune, but there is a chance that the product or service’s demand will not transfer. Consider if you can afford to jeopardize your life savings. Is the business’s need limited to heavily populated cities? Will it function where you reside, particularly if you reside in a provincial coastal town or a rural area? How can a formula be followed if there is none to follow?

If capital is limited, it may be prudent to go with a tried-and-true business model with an established market that is supported by facts and data validated by current franchisees.

Can you afford it?

Remember that inadequate funding is the second most prevalent cause of franchisee failure. In other words, they can afford to purchase the firm, but cannot afford to operate it and remain in business beyond 12 months. Consequently, you should determine your budget before you begin shopping. This will prevent you from overextending yourself and allow you to pick a firm that fits your budget.

You may accomplish this by determining the actual cost of beginning the firm. This includes the original franchise price, accountant and legal expenses, and premises, among others. You must also determine how much operating capital you require (i.e the money you will need to run your business on a day to day basis). When will you be able to begin receiving a salary from the business? And most crucially, how will you cover your living expenses throughout the launch phase?

Speaking with other franchisees of the same firm will enable you to determine how much capital they need and how long it took for them to generate a profit or a salary. You will receive a variety of responses; thus, chat with as many people as possible to determine the average.

Income

There is no use in investing your life savings in a firm that will not generate an income commensurate with your needs, desires, and goals.

The question is, can the business generate sufficient income and mental stimulation for you? You may be talented and determined, but you should not disregard common sense. Make certain you examine the revenue. This can only be accomplished by chatting with a large number of franchisees of the business you wish to join. Don’t be deceived by the wealthy. They may be scarce, or there may be other explanations for their higher earnings, such as their location or length of service.

Do you possess the X factor?

Can you envision yourself operating this business? Do you possess the intelligence, resolve, and motivation to operate your own franchise? Will it compliment you and your history? Are you willing to get engaged, get your hands filthy, and roll up your sleeves? All excellent questions to ask oneself. I would suggest including your spouse in initial conversations, meetings, and decision-making so that they understand what is involved and the level of commitment necessary. Ensure that you have their whole backing.

Finally, are you going to enjoy doing it? Importance is to enjoy the trip; if you don’t enjoy something, you won’t do it for long. Imagine where you wish to go in five or ten years. Celebrating your achievements will aid with mental concentration. If you are still uncertain at the conclusion of this procedure, I would suggest beginning it again. You have not yet spent any money, which may help you find the correct solution.

WHO IS THE AUTHOR?

Matt O’Neil is the Head of Recruitment at Expense Reduction Analysts UK, which has won the Global Franchise Awards’ Best White Collar Franchise category twice.