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If you’re considering opening a franchise or starting a business, you may be overwhelmed by all there is to learn and do. It’s easy to get discouraged and feel like your goals are out of reach, especially if you don’t have any business experience under your belt.
You’re not alone in feeling this way, but it can be done! Many successful franchise owners have achieved high profits and business growth, even with no former experience or qualifications. That’s the perk of franchising—the ability to start a small business with the franchisor’s support and expertise behind you.
Your franchisor will guide you with the behind-the-scenes operations of your business, allowing you to focus on growth, profitability, and customer satisfaction.
Who Makes a Good Franchisee?
Business ownership is certainly no walk in the park, however. It’s not for everyone. There are several key factors that help determine your franchise success. Many of these have more to do with your personality and willingness to learn than your skillset. Read on to see if you might be a strong franchisee candidate.
1. Drive
Do your due diligence, both before and after deciding on a franchise concept. While you are researching franchise opportunities, the franchisors are likewise assessing whether you would be a good fit for their franchise system.
Asking the right questions during the research process will help you understand precisely what you are signing up for. A high level of engagement will also prove to the franchisor that you are taking this opportunity seriously and are willing to put in the work.
Don’t mistake franchising for a turn-key business. While franchising does offer significant advantages when starting up your business, it is not a hands-off opportunity. If you want your business to be successful, you’ll have to put in the work to get there.
2. Passion
While experience in a business environment is undoubtedly helpful, it’s not required. As long as you have a passion for what you’re doing, the franchisor will help you with the industry know-how.
Your passion will be what motivates you day in and day out. It’s your common ground with your customers. And following your passion is the best way to build a future for yourself that you can be proud of.
3. Leadership
More important than specific skills will be your natural leadership abilities. As a dog grooming franchise owner, for example, you’ll likely not be working in the back bathing dogs, but you will be managing your team of employees. If you are not comfortable delegating, enforcing policies and procedures, and setting an example for your staff, you may want to reconsider whether or not franchising is for you.
4. Willingness to learn and be challenged
As mentioned above, you don’t need to have a business background or specific industry experience to invest in a franchise. Fortunately, being a part of a franchise system gives you access to industry experts, quality training programs, and nearly endless resources. As long as you have the patience and work ethic to apply yourself, you can succeed.
5. Adequate starting capital
Financing options include 401(k) business rollovers, home mortgages, small business loans, and more. Most franchisors have a minimum requirement for net worth and liquid capital. You’ll need adequate starting capital to properly market your grand opening and support your lifestyle in the months before you open (usually 6 to 12 months).
Some franchisors provide direct funding, but this is not common. Learn more about the different financing options for purchasing a franchise to find one that’s right for you.
6. Strong business partners
Franchisors are not all created equally. When starting a franchise business, review the franchise disclosure document and franchise agreement thoroughly so you know exactly what support and services are and are not provided.
Depending on the terms of the franchise agreement, you could be in a contract with the franchisor for ten or more years. You’ll want to be confident in the franchisor’s ability to foster your success. Consider reaching out to existing franchise partners to speak about their experiences with the brand.
7. A great location
Real estate selection will be one of the most essential elements in determining your franchise location’s success. Accessibility, foot traffic, and visibility all help bring in new customers to your business. Being in a convenient location also helps retain customers and improve their overall experience.
In addition to logistics, you’ll also need to pay close attention to the demographics of your territory. Do the demographics match up with your target market? Consider factors such as average age, income, gender, and industry-specific statistics (such as pet ownership for a dog grooming business, etc.).
Work closely with a knowledgeable commercial real estate agent to determine the best location for your business. Often, the franchisor can recommend and connect you to a local real estate agent in your area that will help you with your site selection.
8. A business plan
Whether you are buying a franchise or starting your own business from scratch, you always need a business plan before taking any action. Your business plan will include a business summary, products and services sold, cash flow, information on your specific market, and more. Your business plan will be a necessary step to secure funding for your business.
Learn more about business plans here:
SBA.gov: Write Your Business Plan
BPlans.com: How to Write a Business Plan
9. Strong people skills
Hiring the right team can make or break your business. Be sure to have a plan for recruiting and hiring the best employees (another area in which your franchisor may be able to help). Once you have formed your team, proper communication, praise, and constructive feedback will keep your employees motivated and performing strongly.
People skills are not just about managing your team. As a business owner, you’ll likely interact with your customers regularly. Providing high-quality customer service and making your clients feel seen and heard can go a long way in fostering trust and confidence in your business.
Networking and community outreach will also be essential for promoting your business, especially in the early days. Relationships with other non-competing companies in your area create easy marketing opportunities for your business.
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