Have you ever wanted to get into the industry of franchising? Have you been thinking of owning your very own branch but don’t have any idea where to start and how to start? Well, there are many things to consider before getting into the industry but fret not! Here we’re here to guide you and give you the Top Tips Before Buying a Franchise.
What is Franchising?
Franchising is a form of branching out and expanding the main business. This gives an opportunity for them to grow and become available in different areas which are beneficial to all parties involved such as the main business owners, the franchisee, and the consumers alike. There are many benefits in franchising including marketing strategies, human resource leverage, and business opportunities that often create better connections.
Franchising in itself includes many opportunities, plus it’s way easier and less risky than starting a business from scratch! You will have access to funding and other resources while being able to become flexible with your own time. You won’t have to worry much about your market because it already exists and will only depend on your location’s strength. Plus professional training will also be available from the main branch!
Tips before buying a Franchise
So what are the tips that we can give you if you’re looking into getting into franchising?
Learn what you can about franchising
Before signing any contracts, you must first learn about franchising and what you’re franchising! You must always be informed of everything that goes around the franchise you’re looking into, and understand everything about it. See if it fits your liking, understands the terms and conditions, checks out its other branches, etc. This will always remain helpful to you if you’re considering it!
Consider your market
Considering your market means knowing how well your business will grow with its target customers. Finding out whether your franchise will grow in the market using market research will help you in choosing which franchise to go with. You should also note if your target market is plentiful in the area of your choice so you won’t be having sparse days while your business is running.
Know your financial risks
In every business aspect, there is a risk. Risks are inevitable when entering the business world, even in franchising! So learning and understanding these risks will be helpful to you in the long run. There are factors in the finance department that you may encounter while running your franchise and these may be things such as competition. To become more prepared for financial risks, here are things you need to consider; extra funding, in case of unanticipated costs, stocks from your main suppliers, and consumer demand.
Get to know your competition
Getting to know who and what your new business will be competing with will be helpful for your sales. Unique merchandise and services will surely become strong against your competition as this will pique the interest of your consumers.
Study the category you’re getting into!
When you’re entering into franchising, you must of course get to know the category of which franchise you’re pursuing! This is important because a lot of categories in the business field may have different types of requirements, procedures, and even financing. There are many factors to consider in which field you’re entering aside from financing too, like advertising, your future employees and their requirements, and so on.
Converse and connect with Franchisees!
Similar to studying the field, if you have an eye for a specific franchise then you should have conversations with other franchisees in the same field. You may form connections with the ones who are in the same category of business, or even the direct franchisees of your chosen business franchise. This is extremely important because you will get real-life advice and even experience from their perspective on how their franchise functions and what types of difficulties or challenges they run into while operating.
Consider hiring professional help for internal operations
You can’t do everything yourself of course! When it comes to internal operations such as accounting or financial management, you may want to consider hiring a professional. Always put them up for consideration as bookkeeping is never an easy job. You may also want to consider hiring a lawyer or other professionals when it comes to running your business and considering expansion.
Try experiencing a franchise by working in their store
To be able to experience how a business franchise works, you may want to try working in one! This is a great way to see how it works internally and to see if it fits your liking! When you work in a store of the franchise you’re eyeing, you create an idea of how your future franchise will work out internally! It will help you envision changes you might want to make and the like.
Have a checklist of the support provided
Most businesses offered for franchising cover the administrative resources, operating system (hardware or software), IT support, processes, business standards, suppliers, marketing, and/or human resources side of the business. Other franchisors also offer communication systems (i.e. hotline numbers) such as hotlines and social media management. It is very important to check which are covered so you have an idea of what else you need to take care of to ensure that the business will be successful.
Know the start-up cost and ROIFor every business, there is a start-up cost. This is the amount of investment you’ll be shelling out to start the business. Start-up costs include the cost of equipment, supplies, business fees, payroll, marketing costs, training costs, etc. And of course for each investment, you need to determine the appropriate ROI, this stands for Return Of Investments. It is important to know and identify the past and potential financial returns. ROI allows you to see the fruits of your labor and investment, or the lack thereof, an important aspect to always have a handle on when running a business.
We hope that this article helped you in deciding if you want to pursue franchising! For more articles about franchising then you should check out more on our news pages and if you are interested in a new Paint Juicy paint and sip franchise, just reach out.