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By Ben Greenwood
Buying a franchise offers many benefits that simply starting your own small business doesn’t. For instance, you are buying into a system of work that has already been proven to work, as well as benefitting from the experience of a company that will have been in business for many years. While you are limited on branding and some of the more creative aspects of starting your own business, the benefits of the franchise system make it an attractive prospect for many people looking to go into business.
Buying a franchise does away with many of the uncertainties of starting your own business such as the branding, initial marketing and location and can seem like a surefire route to a success. After all, you just pick a company you like and pay them the cash to open a store in your local area, right? Well, not quite. In fact, choosing and buying a franchise is actually quite complex and there are quite a few pitfalls to fall into. If you’re look to buy a franchise in the near future, try not to make the following mistakes…
Not doing enough research, or even neglecting research entirely, is a crime that no potential franchisee should commit. Research is crucial to any prospective franchisee and before you even consider a meeting a potential franchiser, make sure you know everything you possibly can about their business, the way they work, their financial position, their position in the market and so on. Signing up with a franchise is a massive commitment and you don’t want to regret your final decision later just because you missed something in your research. You should also get a fairly good idea of whether the franchise is for you, which helps narrow down your shortlist and saves you wasting time on any unnecessary meetings.
It’s worth going and talking to some current franchisees as well to get a ‘ground level’ account of the business. Find out what the realities are of running the business day-to-day, what it’s like to work with the franchiser and, if they are willing to talk about it, how much money they make from the business. You’ll find that you gain some interesting insights that you won’t get from the corporate material through this exercise, so don’t forget to get out there and talk to the people already doing it!
A lot of franchisees get overawed or enamoured with a particular franchise, especially if it’s a multinational or well-known company, and decide immediately they want to go into business with that particular company with little regard for important considerations such as cost, profit and the realities of working with that company. This is a huge mistake; as a franchisee, you need to be impartial and base your decision on hard figures and a strong knowledge of a company’s working practices. Also, don’t forget to shop around – never settle on one of the first franchises you investigate, even if you think it’s right for you.
Don’t irritate the franchiser by being overaggressive or appearing disinterested during negotiations. It’s a common misconception that anyone with the cash can go to a company and open a franchise. In fact, franchisers are quite picky about who gets to run one of their franchises; after all, it’s their reputation on the line. Treat any meetings as an interview process and seek to impress and convince the franchisers of your value to their operation.
Finally, don’t go it alone! No-one, even if they wouldn’t like to admit it, has the skills to carry out every task involved with starting a business, so enlist the services of an accountant and a lawyer to go over contracts and finances with you.
About the Author: Ben Greenwood is writing on behalf of
Cartridge World
, who offer a range of
franchise opportunities
Source:
isnare.com
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