One way of getting into a business is through a franchise. An entrepreneur who decides to use this method has the benefit of selling proven products and services and still be in control. Also, there is support from the parent company and other franchisees.
An entrepreneur has to decide which franchise suits his needs. Even when one identifies the industry he wants to invest in, there are various factors to consider such as price range. Here is a guide on how to choose the right franchise.
Ask yourself what you want. Also, the business you select should be in line with what you want to accomplish. Here are important questions that may help you know yourself.
What are your goals? You should identify what motivates you into entrepreneurship. Do you want to increase your income, have extra time to spend at home, or enhance your entrepreneurial skills? You should choose a franchise that meets your goals.
How much are you investing? Different franchises cost differently depending on the type of industry and business model. By knowing how much you want to spend, you will be able to identify which franchise you can afford. Just like any other business, do not expect your business to pick at once after opening.
What will be your role in the business? You can be an absentee owner or active owner. The former hires people to run the business on his behalf while the latter is involved in the day-to-day management of the business. By identifying what you want to be doing in the business, you can choose a franchise that offers you the opportunity to do so.
What are your skills? It is important for the franchisee to possess the business knowledge and entrepreneurial desire to succeed. Many parent companies like to work with franchisees with some skills. If you know your skills, you can choose a company that requires them and buy a franchise.
Carry out due diligence
After understanding yourself, the next step is investigating the various characteristics of a company. It is advisable to avoid companies in overcrowded industries or thinly populated niches. A crowded industry has stiff competition leading to low returns while the absence of franchises may indicate an underdeveloped market. Consider a franchise in a proven market.
Consider a company with a popular brand name, good performance and a good reputation from other franchisees. You should be provided with a manual of operations to assist you in running the business based on tested principles. The parent company should also allow you to adapt to various changes that you may come across.
The company you choose must meet your financial and investment needs. Several sources may help you identify the various franchise opportunities available including the International Franchise Association (IFA).