Starting a franchise business is a great option for entrepreneurs. Not only does it come with the resources and branding you need to be successful, it also comes with lower risk, excellent support and even reduced startup costs.
But like any business endeavor, you need to put in some initial work to ensure you choose the right franchise for your unique objectives, budget and lifestyle. To help you out, here are seven tips for starting a successful franchise business.
- Consider your skills
Before deciding which franchise to buy, you first need to do a bit of personal reflection. Consider the skills and experiences you bring to the table. Once you understand your strengths and weaknesses, you can find a franchise that best suits you and your talent. For example, if you have experience in the hospitality industry, then a franchise business in which you help restaurants and bars to improve their profits might be the right choice for you.
- Think about your market
Before starting up a franchise, be sure to consider what will work in your area. Steer clear of brands and niches that are already available or saturating the market. You also want to consider the type of audience in your chosen locale. Afterall, what works for one community won’t necessarily work for another.
- Figure out your budget
Franchises have three major fees – the initial fee, royalties and marketing fees. The latter two will generally be based on your sales and revenue. Initial fees, however, are a set amount, must be paid upfront and can range anywhere from $10,000 to upwards of $100,000.
But don’t let this amount scare you. There are ways to finance a franchise when you have little to no funds. However, understanding the options available to you and your max price tag is important, so be sure to really consider it. This will help narrow down some of the available options.
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- Find a reputable partner
Now that you have a better understanding of your unique qualities, your market and your budget, you can start looking into different franchise options. But don’t let these factors be your only criteria. To help minimize risk and increase your chances of success, you want to work with a successful brand.
To help you choose a reputable company, look for franchises with some (or better yet, all) of the below attributes:
- An established brand
- Proven success
- An involved franchisor that offers coaching and training
- A strong marketing strategy
- Little to no competition
- A recession-resistant market
- No legal issues, such as pending litigation, convictions or known issues with franchisees
- Goals and requirements that align with your objective
- Hire the right people (if needed)
When starting a franchise, it may be necessary for you to employ staff members. Your staff are what will make or break your environment, especially in the hospitality industry. If employees are required for your franchise, take the time to develop a strong hiring process and find the right people. Once you find them, treat them right and show them you value their hard work.
- Take advantage of what’s being given
When becoming a franchisee, you want to remember that you are not alone. Sometimes, franchisees make the mistake of trying to learn everything themselves. But the value of starting a franchise is that there are already resources and expertise available to you.
Be sure you have a thorough understanding of the technologies, resources, programs and training that you can enjoy through your franchisor. This will help you, your employees and your business grow, without having to start from step one.
- Learn day-to-day business skills
Your franchisor will help you be successful with their system and brand. But there are also basic business skills you’ll want to learn if you want to maximize your success. This includes accounting basics, how to read financial statements, human resources, conflict resolution and more.
If you already have these business skills, that’s great! If not, be sure to find out if your selected franchise offers help in these areas. If they don’t, look for a local or online course to help you brush up on your business skills. Doing so will help improve your success even further.
These are just some of the many tips that can help you choose and run a successful franchise. If you have more questions about franchises or choosing one that’s right for you, be sure to check out our resources or contact a member of the Sculpture Hospitality team.