Most people, at some point in their life, have thought of owning their own business. However, for most it has never moved beyond a daydream. The biggest reason for this is fear – fear of failure.
Fear is natural. It’s hardwired into our DNA as humans and we all experience it to different degrees every day, and particularly when we make life changing decisions – buying a house, getting married, starting a new job and so on. It is amplified for most when considering something as bold as starting a business, as typically we perceive that we have a lot more to lose with a lot less support. We fear we are not financially stable enough; we fear we are not qualified to run a business; we fear having the responsibility that comes with being a business owner as opposed to being an employee; and of course we fear failing our families.
These same fears are experienced when considering buying a franchise as a means of owning your own business. However, these fears can be allayed substantially – Here are a few things to take note of to help address your fears when considering franchise ownership:
- Know that the success rate of new franchisee businesses is significantly higher than the success rate of new small businesses. This is because franchise business models are designed to allow you, the franchisee, to be in business FOR yourself but not BY yourself.
Don’t be mistaken, the success of any business depends on the owner, BUT the franchise companies provide existing and proven structure and varying degrees of support to help you be successful, that would take you months and years to master if you did it alone. This can include brand power, systems, training, coaching, marketing, procedures, back office support, purchasing power and more.
- Knowing this by itself is not near enough as all franchises are not created equal and neither are all franchisees. You need knowledge to gain confidence and consequently reduce your fears, so you need to do some homework:
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- Learn about Franchising. There are many sources. The IFA (International Franchise Association) is a good source, as is a good franchise broker.
- Know how much liquid cash you have to invest, and how much you can and are prepared to borrow and stick to this.
- Know upfront what your ultimate exit plan is for your franchise.
- Do thorough research on the franchises you are interested in.
- Talk to existing franchisees and don’t be shy to ask the questions you need to, to get the comfort you need that this is the right business for you. They are usually open to providing honest feedback.
- Draw up a detailed business plan.
- Don’t do it alone! Use resources available to help you:
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- Use a reputable franchise consultant / coach to help you select the franchise(s) that meets your financial means, skills, likes & dislikes and most importantly your lifestyle and financial goals. Their services are usually free to you as they are paid by the franchise companies. Take advantage of this!
- Your franchise consultant will also support and coach you through the whole process from having the idea to buy a franchise to the finish line and beyond.
- Hire a reputable franchise lawyer to review the franchise agreement before signing.
- Make sure that if you are using a business mentor (which I strongly support) that he /she is unbiased AND an expert in the field of franchising.
At FranAlign we feel both privileged and excited to be helping people through the franchise purchasing process. Buying a franchise is a big decision but truly lifechanging for the better if done properly.
