For many motivated entrepreneurs and aspiring business owners, there is no right time like the present to begin a small business. As the economy begins to recover from an extended recessionary cycle, prospective business owners are uncovering that, counterintuitively perhaps, the current condition of economic affairs presents what is in many ways a guaranteeing environment in which to start a business. With prices low and landlords hungry for quality tenants, there are abundant opportunities for a self starter to establish their own small business, and to achieve this in a manner that is feasible and logistically sound financially. For those who are considering taking the plunge and making the financial and personal investment necessary to get a little business off the ground, becoming a franchisee is an attractive option increasingly.
The wide range of options available to franchisees offers a level of diversity and opportunity that would be otherwise impossible to attain without the support of an established franchise. Today, the best franchisors provide a comprehensive program of organised support to not only help franchisees get started, but to maintain a profitable and rewarding business successfully. From online resources and technical support, to financial assistance and proper planning, the degree to which a franchisor can contribute to the long-term success of a new franchisee is significant. As potential franchisees begin the process of evaluating what options are available to them and what business opportunities are best suited to their personal interests, abilities, educational background and financial resources, they must take into account the business model also, the marketplace, and a host of other important factors involving everything from site selection to operational details. The bottom line is that before entering into a franchise relationship and signing a franchise agreement, prospective franchisees should not only take time to consider their options and investigate the many variables that go into their decision, but should also focus in on answering some very specific – and very important – questions. The key questions to ask (and answer!) before opening a franchise include the following:
Are there top tier locations available in your area?
While “location, location, location” is a well-worn residential real estate cliché, the logic behind this real property axiom applies equally to the site selection criteria that all home based business owners must consider. Well-established and familiar national franchises such as popular chain restaurants provide a good illustration of how this dynamic can impact the decisions of a fresh franchisee. With established franchise concepts, it is not uncommon to discover that almost all of the perfect locations in a given market are already gone. A little healthy competition is one thing, but a saturated market is unlikely to provide fertile surface for a new franchisee. When looking at their options, prospective franchisees should evaluate both the local and regional marketplace and the amount to which founded competition may impact their bottom line. Newer concepts tend to have greater availability and flexibility, and a quality opportunity can allow new franchisees to get in on the ground floor and create themselves as a market leader.
Is the franchise concept service-based or inventory-based?
Determining if a franchise idea follows an service-based or inventory-based business model is another important factor. Inventory-dependent businesses require a more significant up-front investment frequently, and service or low-inventory industries might enable new business owners to reach profitable status more quickly. Additionally, when evaluating an inventory-based opportunity, it is important to determine if the terms of the franchise contract mandate that you purchase the inventory directly from the franchisor and, if so, is there a mechanism in place to regulate the cost, quality, distribution and sourcing details. Inventory requirements can impose a bunch of complicating factors beyond a greater additional investment, including concerns about theft and spoilage, and logistical considerations regarding storage, shelving, handling, delivery and other possible holding costs.
What are the fees and/or costs to operate the franchise?
Aspiring franchisees must consider both up-front costs and ongoing royalty fees when calculating what kinds of franchise-related fees would be acceptable. There is an amazingly large variation from one franchise to the next in conditions of what types of costs and fees are associated with learning to be a franchisee, and crunching these amounts can – for obvious reasons – have an enormous impact on the entrepreneurial decision-making process. Start-up costs can range from a few thousand dollars to hundreds of thousands or more, and royalty fees and associated franchising costs range between approximately 4% of revenue on the low part to 25% or even more on the high aspect.
What kind of timeframes are you coping with?
When evaluating franchise opportunities, aspiring companies should take the time to investigate what the typical franchise timeframes are like and how long they can expect to wait after getting into a franchise agreement before opening the doors of their new space. While a true number of factors can impact this process, established franchisors understand how to assist with site selection, lease negotiations and the kinds of logistical and technical details (from structure to education and new franchisee training) that might otherwise make for unnecessary delays. A reasonable time frame for an efficient franchise with a sophisticated and set up new-franchisee support process is around 3-6 months.
Does the franchise embrace a forward-thinking business design?
In today’s increasingly tech- and web-savvy world, connecting with a franchise that displays a high degree of specialized sophistication and utilizes online language resources for the benefit of franchisees is critically important to many new business owners. From marketing opportunities through sociable mass media and other non-traditional shops to powerful new online tools for managing scheduling, budget and other day-to-day operational details, the ability to leverage technology is evolving from a luxury to a competitive necessity successfully. Service-based business models are particularly tech-friendly and are generally well-suited to a business model that seamlessly and successfully integrates online marketing, management and arranging components into its functions.
What kind of time investment will be required to make this ongoing work?
While financing and profitability number in deciding what franchise is right for you prominently, it is also important to pay attention to another important thing: an oft-overlooked but critical consideration for home based business owners is determining what kind of your time investment they are capable and comfortable making in their new professional organization. For some, the full hours are unimportant and there is absolutely no such thing as too much. But some new business franchisees and owners may prefer a far more balanced division of personal and professional time. Determine ahead of time if your potential franchise is able to provide you with the tools to make that more well balanced work/play vision a reality. Ask if the franchisor uses a web-based functional system and other efficient management tools that make it possible to run your business from virtually anywhere.
The type of support and training can you expect in the years ahead?
For most aspiring franchisees, the presence of a powerful support network can be a deciding factor when identifying which franchise is right on their behalf. Efficient and experienced franchisors are capable of providing what amounts to a turnkey solution; a new-franchisee support system with a full spectrum of material, logistical and financial support. Ask if a potential franchisoris able to help new franchisees with site leasing and selection discussions, provide design, layout and architecture input, or offer lending assistance and money even. The best franchises shall actually send a support team on site to assist with individualized training, and potential franchisees should inquire about what kind of ongoing marketing, advertising and public relations assistance the franchise shall provide going forward. The insight and experience of a supportive franchisor can make a defining difference in the success of a fresh franchisee, and taking the time to get to know your prospective franchisor and ask hard questions before entering into a franchise agreement should be considered a top priority for any responsible entrepreneur.
For many motivated entrepreneurs and aspiring business owners, there is no time like today’s to start a small business. As the overall economy begins to recuperate from a protracted recessionary cycle, potential business owners are uncovering that, perhaps counterintuitively, the existing state of financial affairs presents what’s in lots of ways an appealing environment where to start a company. With prices low and landlords starving for quality tenants, there are abundant opportunities for a personal starter to determine their own small company, and to do so in a fashion that is financially feasible and logistically sound. For those who are thinking about taking the plunge and making the financial and personal investment essential to get a little business off the bottom, becoming a franchisee can be an increasingly attractive option. The wide selection of possibilities to franchisees offers an even of variety and opportunity that might be otherwise impossible to achieve with no support of a recognised franchise. Today, the best franchisors provide an extensive program of structured support never to only help franchisees begin, but to effectively maintain a profitable and rewarding business.
From online resources and tech support team, to financial assistance and strategic planning, the degree to which a franchisor can donate to the long-term success of a new franchisee is significant. As prospective franchisees begin the procedure of evaluating what options can be found to them and what work at home opportunities are suitable with their personal interests, talents, educational history and financial resources, they must also look at the business model, industry, and a host of other critical indicators involving from site selection to operational details. The end result is that before getting into a franchise romantic relationship and putting your signature on a franchise contract, prospective franchisees shouldn’t only remember to consider their options and check out the many factors that get into their decision, but also needs to concentrate in on responding to some very specific – and incredibly important – questions. The main element questions to ask (and answer!) before starting a franchise are the following:
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