Hiring The Right People
Many franchises - such as food, hospitality and...
There are many differences within the various franchise business types. Some serve food, while others have retail locations where customers come in and shop, for example. Then there are the service industries, where the franchisees provide a service to their customers. This can be anything from painting houses to cutting hair or landscaping. There are many different types of service-based franchises, but they tend to be overlooked by prospective franchisees despite having some value to offer their owners. If you are new to franchising or are just considering a new industry, consider some of the benefits that come with owning a service-based business.
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You are doing something your customers cannot
In many cases, a service franchise is providing something to a customer that they can't do on their own. Maybe you have special equipment, knowledge or education that many people don't. Whether you are offering child care, preparing taxes or offering financial advice, you have an advantage: you offer a service people need or want that they can't handle themselves.
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There are revenue levels
In a service-based business, there are often ways to add to service tiers and create more revenue streams. This also allows customers to have more options when it comes to how much they want to spend. Not all your customers will be able to afford your highest price point, but they might be able to afford the lower ones. This gives you the chance to increase your customer base from day one.
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Repeat business is more common
When you sell items such as merchandise or food, customers may not return for months, weeks, years or at all. However, when you offer a service, most customers will need to come back so you can provide the same service again on a regular basis. This is ongoing revenue for your franchise provided by something that is repeatable to the same customers.
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The overhead expenses tend to be lower
While a retail location franchisee may need to invest thousands just to get up and running, a service-based franchisee often can operate for much less. Once the equipment has been purchased, you may be able to cut your spending and work toward earning. Of course, you may need to buy products or items from time to time, but you're likely spending less on average than other business types.
Service-based businesses have gotten a bit of an unfair reputation in recent years, but they are still a viable franchise opportunity with plenty to offer franchisees. Before you discount the service-based franchise industry, take a look at the brands it offers.
