admin Everyone wants to be their own boss. While starting your own business from scratch can be daunting, the thought of controlling your own destiny is equally appealing. However, the majority of us are not sure where or how to even begin. One path to become a businessman is to buy a business, or a franchise.
When you buy a franchise, you are fundamentally buying a business that has worked everywhere and for everyone. Instead of investing all your resources in a business that could very well bomb in a short time frame, it makes much more sense to invest in a franchise. Indeed, one of the biggest benefits of being a franchise owner, as opposed to starting one’s own business, is the collaboration factor and the logistics. Everything is in place. The support that one gets from corporate offices and leaders is what makes franchise ownership so appealing. When you boil it down, acquiring a franchise is an inexpensive way to start your own business.
The amount of costs and risks are significantly less. The constituents of a business plan such as financing, marketing, operating strategy and training plans are included in the franchising contract. The process of purchasing a licensing agreement for a specific product or service from a franchisor is greatly streamlined.
Before you embark on your franchisee journey, there are certain factors that need to be taken into consideration. Here are several key factors that will help your franchise succeed.
1) Location
Location plays a key factor that will either make or break your franchisee endeavor. Be it a product or a service, your physical presence needs to be in a place that is well-populated, with lots of food traffic. There should also be at least a general awareness of the brand and the kind of product/service that is being provided. Demographics also play a major role. Opening up a non-vegan fast-food joint in an area largely dominated by vegans would surely tank your business.
2) Marketing
The second most critical factor is marketing. Spreading awareness of the existence of your store is a must for the franchisee to be profitable. Locals should be aware that the brand is now in their area. For example, it may happen that residents in area A may be going to an ice cream parlor in area B. If you have opened the same parlor in area A, then the locals should know about it.
There should also be marketing about new products and offers. Lucrative deals are what would make customers flock to your stores.
3) Customer Retention
Whenever a new business is opened, there is full focus on gaining new customers, but there is hardly any on retaining existing customers. Losing customers is worse than not gaining new customers. When you lose a customer, it advertises the fact that they are unsatisfied. Follow-up is crucial.
Help from marketing can be taken. Emails, text messages, etc. about special offers for existing customers is one way to retain customers. Setting up a loyalty membership program is another way. Gift your customers whenever they recommend your franchise to their friends.
4) Rainy Day Funds
Even though it was stated earlier that franchises are an inexpensive way to enter into the world of business, it is pivotal to have access to extra funds in case of emergencies. Having no backup would be fatal for business. Suppose there was a storm that completely ruined your products and your store. Not having a well-established “rainy day” fund would put you, your business and the overall brand reputation under a lot of strain.
And one should not only consider these extreme and often rare events. One must also be willing to understand and accept that earning a profit takes time. Brand and store awareness itself will take a major chunk of your early franchising days so much so that it will be a few months before you see a profit. Being prepared to live in debt is an important factor.
5) Strong systems and the right team
Every company has a set of systems in place. A fast-food franchise may have a system in place wherein they deliver fresh bread and sauces every morning and every night, the leftovers get discarded. A gym franchise may have a system where the equipment is serviced every 6 months without fail and their trainers should undergo periodic fitness tests. These systems are of supreme importance, and is what makes the brand the brand. As a franchise owner, it is your duty to ensure the quality of work being carried out at your store. For this, you require a strong team and due diligence. The former is usually provided by the brand. For the latter, all you need is your presence and a firm control on the day-to-day operations at your store.
All in all, perhaps the most important aspect is patience. One should be thorough and well-prepared for any situation, however bizarre. Along with money, time is another major resource that one needs to invest to see their business not only survive but thrive. The more time you invest, the more returns you will gain.
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