April 12, 2022
You're ready to make the big move and invest in a franchise. You've spent countless hours trying to figure out where you should invest your money. Then, all of a sudden, the idea of opening up a franchise comes into your mind. As you probably know, not all franchises offer the same profitability, and there are other factors that can determine the outcome of your franchise ambitions.
Okay, so listen, right now you might have grandiose visions of starting a franchise and getting rich. Maybe you hear about all these sandwich shops that are popping up all over the place and making money and that gets you interested. You know there's some sweet bread to be made selling sandwiches, but there's more to it than that.
You are going to have to spend quite a bit of time working at your franchise. Unless you buy a franchise that's already in existence with workers and everything else, you're going to have to work side by side with everyone else. That means you'll need to learn how to make the sandwiches and do all the other stuff you expect workers to do. Yes, you'll also have to learn how to clean the toilets and make sure the restaurant looks its best.
That's why when you're considering a bizop, you need to ask yourself, "Is this work that I can do myself?" Meaning, is it work that you won't have any problem doing yourself? If you can't envision yourself making sandwiches, owning a sandwich shop probably isn't a good idea for you. You'll need to ask yourself what type of franchise fits best with your personality so that you're able to go to work without dreading every minute of it.
Some franchises will make you jump through a million hoops before they let you in. Most franchises will require you to invest a certain amount of money. You might also have to prove your net worth before they allow you to take on a franchise.
The fine print here is what you have to take a look at. How much do they want you to invest? What are your expectations as far as percentage of profits that you have to give back? You'll also need to give them money so they can do things such as run advertising and other stuff so that your franchise gets plenty of business.
If you take the sandwich shop as the example we spoke about earlier, you need to do research to see how they are currently doing. If they are a publicly traded company, check out how their stock has been performing recently. You don't want to invest in a business that's going through a downtrend.
Another thing that is a must is to do online research to see what customers are saying. Search YouTube for product reviews, Reddit, and any other places where people review the product that you're thinking about selling. Those reviews will be crucial in helping you decide if the franchise is right for you. If a large number of people say the sandwiches suck, they probably do, and it's best not to invest your money in a business with a questionable product.
You also need to try the product yourself. If we're talking sandwiches, find a franchise, try a sandwich, and see what you think. Invite your family or friends along and get their opinion. Go during a busy time of day and see how customers react when they bite into a sandwich. If the customers look like they're enjoying the food, that's a good thing because it means the product is a winner.
If you're building the business from the ground up and you're not buying a fully operational franchise, you need to think about location. If you're selling beauty products, you need to be in an area where there are female shoppers. If you're selling food, well, you need to be in a location with general foot traffic.
The location of your business is just as important as the franchise itself. You can have the best cosmetics to sell, but if no one goes in that area, you'll never sell anything. Don't sign a lease for a year or multiple years without scoping out the area first. Ask if you can lease the storefront month by month if that's possible. What you're trying to do here is avoid being stuck in a terrible location with a long-term lease you can't get out of.
Add all of this together and you've got the recipe for franchise success. No, it's not as easy as that, but at least now you have a framework from which you can build on. Never forget that you're going to put your heart and soul into this business, so it better be something that you believe in wholeheartedly or it'll never live up to its fullest potential.
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