How do you know if this opportunity is for you?

Franchising is very much a team and family environment. If you:

1 are not a team player

2 are stubborn

3 don’t like working with others; or

4 are overly entrepreneurial and want to do everything your own way, then franchising may not be for you.

However, if you enjoy being part of a team that is well coached and has the ability to cross-pollinate ideas and concepts for mutual gain, then franchising may be your best option to enter the small business arena. Done well, franchising allows a franchisee to focus on customer service and day to day operations, with the franchisor focusing on brands, systems, product supply, innovation and the bigger picture. Franchising suits people who want to follow a system as customers of networks want a consistent retail experience.

Franchising is not risk free. It is not like working in a job. Entering any small business, including a franchised business, carries with it a degree of risk. Businesses take time to get established, so you need to have adequate working capital and perseverance for the early times. Some areas are more affluent than others, there are different ethnic mixes, some areas have greater competition, etc. And the economy has its ups and downs. If you are the first franchisee in a system it stands to reason that your level of risk is higher than for later franchisees, due to the inexperience of the franchisor. They may have proven their concept over several sites or locations but they are still new at franchising. If there are more franchisees in a system it would be logical to assume that the degree of risk is reduced proportionately. BUT, every separate franchise has risks to its locality or geography that are exclusive to it and thus unquestionably some risks will remain no matter how much experience the franchisor has. Plus it is important to check that the underlying business is not a fad, but has substance and long term customer appeal.

Like any family or organisation, within a franchise there has to be ultimately a decision maker. A person who shoulders the responsibility of that final say. Most successful franchise organisations are very consultative with their approach and listen hard to what their franchisees are telling them, but it is the franchisor who will make the ultimate decisions. So, as a franchisee you have to accept from the outset the concept that sometimes a franchisor will make a decision for the benefit of the entire franchise network that may not suit you in your particular business. Most of the time this will not occur but it is a fundamental of franchising.

WHERE DO I START? Some basic questions need to be addressed while contemplating whether to buy a franchised business.

WHAT DO I LIKE DOING? There is little point in becoming a dog wash franchisee if you don’t like animals or an automotive retailer if you have no interest with cars. Clearly you will be happier in a business you enjoy. Make a list of these business types and then see if a franchise already exists in this field. Usually you will find several options.

AM I GOOD AT WHAT I ENJOY? IS THERE A BUSINESS OPPORTUNITY THERE? Unfortunately the world is littered with failed businesses where individuals have tried to make a business out of their hobby. They proceed with their heart not their head, not recognising the hobby will not deliver the necessary income to survive. Similarly, just because you like doing something doesn’t mean that you are good at it.

WHAT ARE MY PERSONAL STRENGTHS AND WEAKNESSES? You need to be brutally honest with yourself. Make a list of both your strengths and weaknesses and see if others perceive you the same way.

WHO DO I ASK? Friends can sometimes be honest with you about where your major attributes lie. Pick a friend who will be very honest with you, not one who will just say what you want to hear. Be prepared to hear information you may not like but take it in a constructive manner. What may seem like a cruel comment today could save you from a financial disaster later. Spouses are great sources of the truth – if you can handle it! Obviously your partner’s opinion is vital to such a big decision and to proceed without their support would be ill advised anyway. Please ask people that are successful in business already, not the next door neighbour “Eddie the Expert” who knows a mate that went broke because he bought a franchise. Ill informed advice that doesn’t take into account all the relevant factors is highly dangerous.

AM I PREPARED TO FOLLOW THE SYSTEM? If you are trying to reinvent the wheel from day one then don’t enter a franchise. The vast majority of successful franchisees are those that buy the formula and stick to it, recognising its strengths.

AM I PREPARED TO WORK HARD? To be successful hard work is unavoidable. You may think that you worked hard when you were employed by someone else, but as a self-employed franchisee you will appreciate what stress and long hours really are. The difference is that you will probably enjoy it and not even consider it a chore. You will also learn that the longer and harder you work the luckier and more successful you become! What an amazing coincidence. Working for yourself is certainly mentally rewarding and most who experience it find going back to an employed position very difficult. But make no mistake, it will be hard work and do not expect to sit back whilst the franchisor does everything for you.

DO I UNDERSTAND AND ACCEPT THAT EVEN AS A FRANCHISEE I COULD FAIL? Franchising is not a guarantee of success and you should never assume that it is. Whilst all the statistics point to franchising being many more times successful than conventional small business it can never be a guarantee. If you want a guaranteed income you are better off in employment, not in a business.

AM I PHYSICALLY AND MENTALLY FIT ENOUGH TO TAKE ON A NEW VENTURE? Do not assume that not being a service style franchisee like cutting lawns or cleaning cars reduces the need for physical fitness. If you are entering a retail franchise and you are used to sitting behind a desk all day you will find your back and legs complaining loudly until you get used to it. Are you strong enough to make sound business decisions where you can disassociate yourself from the needs of the business and your personal desires? Put simply, are you prepared to take out another loan to buy more stock? Are you too frightened to do this despite having done the numbers to prove this makes sense? Are you prepared to tell friends that you can’t play golf on Saturday as you have a big sale on and the staff won’t do as well if you are not there?

ARE YOU TOO OLD TO TAKE THIS ON? Can you build the business over time to the point you can sell it for capital gain before it exhausts you? Most businesses require lots of hours in the business, particularly in the early years.

WHAT CAN YOU REALLY AFFORD? Never commit to a business that uses up every available dollar that you have. Always have some resources available to draw upon if things go worse than planned. Experience tells us that everything costs more than we expect and the last thing we need is unnecessary financial pressure when we are starting out and have so much to learn and attend to. Obviously it pays to have professional advice in this area and your accountant is a good contact.

HAVE YOU GOT EXPERIENCE MANAGING PEOPLE? If your business opportunity involves staff you will need to be able to encourage and control but also discipline and teach. Can you do that? Most business owners will say that staff selection, training, motivation and management is the most important aspect of their business.

WHAT ABOUT MY FAMILY? As previously suggested, you should not commit to a business without the support of your partner. But it goes further than that. Do the kids understand that you may not be home to play with them as you have been and that you won’t be able to take them to footy or ballet because you will be working? Are you prepared to make these sacrifices?

WHAT WILL MY FRIENDS THINK? It sounds a bit strange, but what your friends think will be important to your happiness. Will it be socially acceptable to your group of friends that you have left a senior job and bought a hairdressing franchise, or a courier business? Would they think more highly of you if you had bought a book shop franchise? Is it important to you what they think – even though both could make you substantial money and both are proven and highly successful franchises?

WHY ARE YOU EVEN THINKING OF DOING THIS? Are you just desperate to get away from your current employer? What is it you are really looking for? More money? A new career? To build a saleable asset? Job satisfaction? It is important to be comfortable that you are buying a business for sound reasons that are well thought through and understood. Franchising should not be seen as an escape from the past, it should be the starting point for your future.

The opportunity is perfect for someone with the following back ground:

• Enjoys working with their hands
• Enjoys working outdoors
• Has a reasonable level of fitness
• Possibly an ex – trade background e.g painter, roof plummer, scaffolder
• Perfect for a couple
• Perfect for someone with a mind to run their own business

Please call Leigh on 40407 620 143 to discuss and schedule your free ‘Day on the tools’.

Take directions and follow a system.