Could You Own a Franchise?
Franchisors are seeking individuals with the ability to soak up their knowledge and systems, and develop a successful business through a mixture of hard work and the proper implementation of their business concept.
Have you ever wondered if you have the personality and skills to be a successful franchisee? There are currently over 1,400 franchise companies operating in the UK, each requiring a diverse range of skills. Here are the factors that will affect whether you are suited to owning a franchise.
MotivationFranchisors seek franchisees that are looking to run their businesses in a hands-on fashion because they want to take advantage of that desire for business success. This is a desire that just cannot be matched by a salaried manager and this is why franchised operations will tend to offer greater quality of service and place more emphasis on customer satisfaction. Franchisors are, therefore, seeking prospective franchisees that have a genuine enthusiasm for their industry, their service or product, and for building a successful business. This enthusiasm is usually prized more highly than industry experience – the franchisor's training and support should overcome any disparity in this area.
Operating the SystemIn buying a franchise, you are investing in a proven and fine tuned business blueprint. It is, therefore, important that you are willing to work within the confines of the franchisor's successful systems and procedures. This is partly because the franchisor has already gone through the trial and error development, learned how to avoid mistakes and performed the fine tuning in developing its business package on behalf of the franchisee, and partly to encourage standardisation of the franchisor's products and services nationwide. This ensures that no franchisee is producing products or services to a different standard to the rest of the network, which could damage the brand. A franchisee that comes to resent the authority of the franchisor is one that was never suited to becoming a franchisee in the first place, and these situations are easier to avoid than to remedy. If you are the type of entrepreneur who wants total control to tinker with the business, you may be better off considering other avenues of business ownership.
Work EthicThe decision to become self-employed involves a great deal of soul-searching – what prompts it can as often be the desire to escape employment as the drive to build a successful organisation. However, if you're interested in becoming a business owner in order to cut down your hours, think again. With the future of your business in your own hands, you won't be able to switch off at 5pm – you may find yourself working six days a week, until well past this time, in the initial stages. Franchisors realise this but, while many will offer plenty of support to help you get your business off the ground, they can not do it for you.
Financial ConsiderationsFranchises are very affordable, with some superb opportunities available for an initial investment under £15,000. Additional funding is readily available from the banking industry, within which there is a great deal of recognition for the reduced risk inherent in franchising. Like you, many bank managers will be well aware of the survival rate of franchises compared with that of small businesses. Many banks have now set up specialist franchise departments and have developed relationships with franchise brands seeking to assist their franchisees in winning loans. However, the income derived from owning your own business will prove much more irregular than that which is earned through employment. There is no pension or sick pay – barring what you set up for yourself – and much of what the business does earn may be required for reinvestment as you grow your operation. Can you deal with this insecurity, and are you able to support yourself through it until your business start-up finds its feet? Many franchisors will help you develop your business plan, but it will take determination on your part to see it through.
Management SkillsAs your business grows you will need to take on and lead staff. Franchisors will deal with management skills during the initial franchisee training programme, but there are many that are reliant on your own personal abilities. While many franchisors point out the diversity of the backgrounds of its franchisees, they still require candidates with communication/people skills. These skills are not only useful in dealing with staff - they help in dealing with clients as well. As with any business start-up, a franchisee will have to wear a variety of hats – that of manager, salesperson, entrepreneur, administrator and worker. An understanding of people and the ability to win confidence are vital for building a successful business.
Avoiding RisksStarting your own business is taking a big risk. Buying a franchise reduces the risk. Ideally you want to minimise risk as much as possible, therefore you should choose a strong franchise system with a proven track record. If you love to take big, bold risks, then franchising may not be for you. If you are careful and thorough in your franchise research, so you know just what you are signing up for, then you have the knowledge to succeed as a franchisee.
How Many of These Qualities Do You Possess?Franchisors are seeking individuals with the ability to soak up their knowledge and systems, and develop a successful business through a mixture of hard work and the proper implementation of their business concept. Therefore you need all of the above attributes to consider yourself a great candidate for franchise ownership. So, maybe you might consider doing some soul searching about your own assets and how they will fit in with franchise opportunities when conducting your research.
Are you suitable for franchising? Take the test to find out!