When you have strong credit, your franchise's financial...
Usually franchise writers stress steps you should follow in choosing a franchise business. These are important.
However, I think we're missing one very important ingredient. Before you choose your new franchise business, the ingredient to consider is YOU!
Yes, it's essential that you should choose a successful franchise system (old or new). Secondly, you should make sure you're comfortable with the personality of the franchisor. Is the franchisor Rigid? Demanding? Confrontational or Supportive? Open and Understanding? You're buying a franchisor's experience, personality and system. These are key ingredients to fuel your success. But there is a factor that is equally and - in many ways - even more important for your success.
Of special value to your franchisor is your work background. It shows the following:
An important area to be considered -
All work makes for a very narrow lifestyle with little life balance! However, outside interests and activities such as coaching, chauffeuring, cheering, volunteering, tutoring, etc. will have to be cut back as you start your business.
Do a financial spreadsheet of your current living costs for you and your family. Your new business will probably not be able to initially provide the same income you currently enjoy. Make sure you have some way of replacing income or plan to cut back on expenses. Maybe it's having a nest egg to get you through start up months (provide for up to one year).
Some expenses such as rent/mortgage payments, utilities, taxes, food, etc., are fixed. Include others such as car and insurance expenses and all other indirect costs in your personal cash flow analysis.
Some expenses are variable – eating out, travel, holidays, entertainment, etc. These can be postponed (if your "gang" agrees).
Your Personality Pattern
Your Personal Situation
Your Enjoyment of Challenges?
With the above questions and answers, in our franchise consulting business we’d create a checklist or a balance sheet for you.
Above all else you need to understand not only the possible rewards and opportunities of your new franchise business but also what it will demand from you and your world.
All the way through this article, we have focused on you. You’re the key for yourself but also for the franchisor.
With a good franchise system (training, support, system) you can go into a new world – if you bring your tools to the equation.
Time after time in franchising we see:
On the other hand:
Yes – YOU are probably the biggest factor on how successful your new franchise business can be.
Take your time, choose what you’ll enjoy and be proud as its operator. Your results will be amazing, both financially and emotionally.
From the franchisor’s side, they will have refined and tested their system and products and learned how to best select operating locations. To them – you’re the unknown quantity.
From your side, do your due diligence on the franchisor, take off your rose coloured glasses about the concept and be objective about your long term enjoyment of the system. Above all else, look inwardly at yourself. Like any marriage, both parties have to give and cooperate to make it work. You’re choosing a franchise business because it brings you support, experience and strength. Make sure you’re going to add to and cooperate with the system. You’ll be rewarded by great results.
If you’ve always been an employee, it’s a big step to go into business. Do your homework, choose a system you can benefit from and enjoy then give it your time, attention and enthusiasm and you’ll be the winner!
Written by C. John Woodburn
John can be contacted at:Woodburn & Associates