You can buy a franchise business for just about anything these days. But not all of them are going to be successful, especially when you take into consideration your specific needs. So how do you narrow it down to the business that’s right for you?
Ask yourself these 4 questions to determine what kind of franchise you should buy.
1. What are your goals (really)?
Lots of franchises require a full-time commitment; some are set up to side businesses. Still others will allow for you to hire staff to run the day-to-day while you simply oversee. So what kind of time commitment were you looking for? Are you looking for this to build equity? Are you wanting to open multiple franchise units down the road? Or is this something that you want to keep you want to make enough money to keep you comfortable when you retire. It’s unrealistic to start a side-business where you don’t want to be involved in the day-to-day work, but want it to be a full time income. Be honest with yourself and decide what you need from this business before you start looking at concepts.
2. How much money do you have?
Your budget will help to determine the types of franchises you can buy into. But be aware, small business loans aren’t always easy to come by. If you think you’ll be investing $200k or less (including the franchise fee, working capital, inventory and equipment), you’re most likely looking at something without a physical location. But be aware if the business is too cheap. They most likely have a high turnover and rate and/or they’re already oversaturated. This will make it hard to get out of if you need to sell.
3. How risky do you want to be?
Once you know how much money you can put on the line, you can decide how you want to invest it. Are you very risk averse? There are plenty of long-running franchise that may not be the sexiest choice, but will provide good profits. If you’re looking for something that’s newer and cutting edge, it will be more of a risk, but it could pay off in better profits. There’s also plenty of middle ground. Decide how comfortable you are risking your money, and then you can start to narrow down your franchise search.
4. What are you good at?
This isn’t just about whether you like to work with people or if you like something fast-paced (though those things are good to know as well). Think about the skills you’ve acquired in your career and where you shine. Are you good at cold calls and sales? Are you a good people manager? Would you prefer to be the one actually doing the work, or directing others? All these things will help you create a picture of the type of work you want to do. And just remember, you don’t have to be an expert, you just need to have the will and an ability to learn.
Once you have a clear picture of what you want, you can start looking at franchise concepts. Don’t get married to a specific type of concept immediately. Running a pet shop may seem ideal for you, but if it requires too much money up front, or a 60-hour a week commitment, it obviously isn’t right for you. If you need help setting up your franchise business, we’re franchise experts. Contact us today to get a free consultation.