Starting a new business can be an enriching time. There is no denying that there is a financial risk associated with starting a new business. However, the gratification of being your own boss can be worth it. But is there a risk-free way of starting a business that guarantees you success?
For some people, the answer to this is yes. Starting a franchise business can offer you more security and a great alternative to the risks associated with starting a new business from scratch. How can you tell if investing in a franchise could be right for you?
What Type of Person Are You?
If you are a person who likes things to be done a certain way, always follows the rules, and works well with a structure, then operating a franchise business could work well for you. If you prepare to be a little bit more creative and expand the boundaries of what is possible, then a franchise business could strangle that passion within you as this type of company already has its own way of working and a tried and tested formula that doesn’t gel well with those who prefer to make their own way in the world.
How Confident Are You?
If you thrive on your ability to turn even the most ardent nay-sayers into believers and, as the saying goes, “sell snow to an Eskimo,” then you have already won half the battle of engaging clients and bringing in customers to your new venture. Take into consideration your personality, strengths, and weaknesses, and be clinical in your evaluation of your personality and skills.
This will give you a better idea of the type of industry you will thrive in and what type of small business or franchise you will be able to make a success of.
What Skills Do You Have?
Even franchises need the same level of dedication a new small business would. Just because you are opening a business with the backing of a big name, it doesn’t mean customers will automatically know where you are and what you can offer. Instead, look at what transferable skills you have that can work alongside your new business to make it a success.
Not everyone is suited skills-wise to taking on a franchise location, and as such, you need to think carefully if you are suited to the type of franchise you want to open to utilizing your skills fully. Franchise Direct and Franchiseek have a wealth of franchise options that you could be ideal for.
What Funding Do You Have?
Buying into a franchise can come with a hefty price tag. But your financial commitment doesn’t end there. Most franchisors will calculate around 3 months’ worth of expenses when in real life, you would be more prudent to look at surviving at a loss or even break-even for around 6 months.
Getting your franchise up and running, marketing costs, employees wages, and so on all add up, and this could well be on top of your initial investment. Think long and hard about how your financial situation can be affected by not turning a profit for a minimum of 3-6 months. The alternative could be that going it alone is a better option for you.
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