Well, here we go, part three in the steps of evaluating a franchise opportunity. Are YOU a good fit for the franchise? No matter how good the franchise is from a branding perspective, or how good of a business system it is, there are skill sets that are required in order to excel. One must be a good basic and realistic self concept prior to purchasing a franchise. Are you the kind of person that can follow a system? If you are going to constantly be looking for ways to change or recreate what you purchased, why buy a franchise in the first place? Also, do you have the skill sets and temperament necessary to run that business. In retail or food service you had better be at least be decent when it comes to finding, interviewing, hiring and managing people. No matter how good the system is at McDonalds, someone still has to man the frier and flip the burgers. Without people skills to manage or hire the kind of management that can get the job done things are going to very challenging.
This is equally true for most service franchises. If you purchase a home based franchise, which I like to call franchised business opportunity, you better be pretty good or at least out going enough to be willing to learn how to market, promote and sell your business offering. No matter what I teach you as far as product knowledge goes or what service you offering, if you cannot get the business you are going to be in for a challenging business experience from a standpoint of revenue generation. Many people purchase home based or service business franchises because the entry costs and overhead are lower and the financial commitments such as executing a lease and purchasing a lot of equipment are not necessary. However, if you are the kind of person that cannot deal with rejection and do what it takes to establish your offering, you are going to be sitting at your desk playing a lot of computer solitaire rather than actually doing business. In this day and age, cold calling or telephone prospecting is not nearly as effective as it used to be. With the advent of caller ID, and voice mail, a lot of prospective customers just do not answer their phones any more especially if they know who is calling. Beating the streets has turned into doing networking groups, luncheons, joining the local Chamber of Commerce and putting on networking meetings yourself.
This brings me to another point namely, "computer skills". There was a day when you did not have to be very good on a computer to run a business. While that may be true for "certain" businesses, for the small business or franchise owner, computer skills are a must. One cannot hope to be productive in this day and age and get the kind of work done that one's competitors are doing without decent computer skills. So, if you are the kind of person that cannot use the basic Microsoft Office programs, including a decent email client such as Outlook, you better take some classes, get some private tutoring or something because if you don't you are going to get left in the dust.
To recap.
1. Can you follow a system or in this case the system of the franchise you are buying?
2. Are you the right for or can you hire and manage the right people that are if the revenue model affords more than one layer of upper management?
3. Do you have the kind of skillsets such as computer skills to run a successful business in today's environment?
4. Do you really want to do this?
Ah, ha! One should do a lot of soul searching before going it on their own even if that means owning a franchise. Regardless of what anyone tells you, you are for the most part going to make a decent amount of mistakes so make sure you have reserves, also it's going to be a lot of work, probably doing a lot of things that you are not naturally good at. So take your time, look at everything from both sides then decide if franchise ownership is right for you.
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3 comments:
Neat post. I'll keep this in mind because I plan on running my own business soon. I know it'll be tough, so I can use all the help and advice I can get. More recently I've been thinking about buying a business instead of starting one from scratch. Maybe a franchise? Home based? I’m not sure. Do you have any suggestions? Advice? Thanks.
Buying and existing business as opposed to a franchise or home based business opportunity are two very different things. If you purchase an existing business you are for the most part buying a "cash flow". That business will already be making money. If you purchase a home based business opportunity or franchise for example you will be starting from scratch with a proven business system. Granted, a lot of the processes and do and don't's will already be worked out but there will be no cash flow in the beginning. I must be very general with you in this response as I do not know anything about your personal situation such as how much money you have to start with and how long you can go without making money. Money home based franchises and business opportunities require that you be a good sales person or marketing to get going. I think you will find some posts aboiut that on the site. Be prepared to hustle a lot in the beginning as you will have to get a lot of your own business and network in the beginning. Most people start home base because they have a lower amount of capital and want to keep their overhead down. Some provide some pretty good marketing and sales training while others pretty much leave you on your own. It's a mixed bag. I personally know of two home based business offerings that I know are good people and offer a needed service. The first is a window treatment dealer training company you can look at at www.windowdekor.com. These people have a program that will get you start in offering and selling window treatments to homes and businesses. The program is less than $10,000 and it home based. They have a good track record and their existing dealers seem to be quite please and doing fine even in the current economy from what I can tell. Window treatments are not recession proof, but they seem to be some what recession resistant especially if you are not operating out of a retail location with a large overhead like many of the blind franchises. If you are a dog person and would like to work with dogs owners and dogs I would consider www.caninedimensions.com. Cainine Dimensions is a franchise. I work with the owner to help him with his offering. The franchise is $29,500 if that is within your budget. They are a new franchise but the owner is a good guy and his two franchisees are doing fine.
Thanks for the help, guys. I really appreciate it. I'm still browsing, researching, and keeping my options open with the whole business thing. It's something I would love to do, and I hope it works out well. Thanks again.
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