I Didn’t Choose My Business, My Business Chose Me
What Kind of Business Do I start?
The decision regarding the type of franchise you select may prove to be among the the most important in your life, especially if it involves considerable investment. It may turn out that you are choosing not merely a franchise but the kind of endeavor to keep you occupied for the rest of your days. What follows are questions that will help you decide which branch of business to go into?
Questions You Must Ask Yourself
What Are My Financial Goals?
Will this business you wish to start bring you the desired living standard? There is no point in starting something that is unlikely to benefit you. You will need to look for other ways to supplement your income and will therefore lose focus.
What Professional and Business Skills Do I Possess?
Anything you are good at may be useful. For instance, if you are good at admistratration, keeping correspondence or you have presentation skills, you may benefit from choosing a franchise that offers services to business. Your hobbies, that software you mastered, or anything you might have learned at your previous job may prove a useful starting point
Do I Like This Job?
Experiencing professional satisfaction is extremely important for succeeding in any field of work. If you like the atmosphere and the people you are going to work with you are already on the right track - all the more reason you should try out what you might getting yourself into by spending time in an existing franchise before you commit financially.
Questions About the Type of Business
Is It Seasonal?
Demand for some services is limited to a given period - the peak for selling ice-cream is the height of summer whereas selling skis is most profitable in winter. If this is the case with your proposed business you would better have a clear idea of your outlays during the ‘down‘ time, in other words whether you would not be incurring a loss. Using your resources to some other useful end is one way of dealing with seasonality, and choosing a business with the inverse ‘down’ period would be ideal.
Does It Require the Maintenance of Retail or Office Space?
Your projected investment depends largely on the expenses incurred for rent, furnishing and maintaining physical space. If you offer services involving visits to the client you may not need office space. ManyUSfranchises do things that way - internet businesses, moving companies etc.
Does This Business Have a Hi-Tech Competitor?
Find out if technological change threatens your business but bear in mind that what you see as being detrimental often has a positive, beneficial aspect too. For example, the Internet has hurt courier companies since nowadays most people prefer to send documents electronically. On the other hand, a growing number of customers prefer to shop online, which results in increased business for... courier companies.
Is This Business Cyclical?
Some businesses see regular demand and are not prone to market cycles - basic foodstuffs and toilet paper are the case in point. Others are sensitive to the general economic environment and the boom and bust periods affect them greatly. Oil, cars, real estate and luxury goods are in this second group. That however does not make the former safer and the latter, riskier.
What Are the Profits Margins?
When you have a business with a lower profit margin you may need to rely on a bigger turnover. That may take time.
What Are the Long-term Prospects of the Business?
If the market for the type of goods/services you are offering is on an upward swing that will definitely be good for you. IT, education, health foods and other sectors are example of up-and-coming businesses.
Is the Day-to-Day Management Easy?
Simple, repetitive and standardised operations are a major boon for you as they simplify HR management and business planning. The Green Monkey franchise for instance only offers oil change for cars. With oil change it is perfectly clear what needs to be done and how long that takes. Engine repair is at the opposite end of the spectrum - noone knows exactly what is broken, how long diagnostics will take and when fixing the problem will take place. Nothing wrong with engine repair - it just does not lend itself to franchising too easily.
Can Readily I Find Employees?
The largest franchise chains use unskilled labor. You may encounter problems if service quality in your chosen line of work depends on the subjective abilities of your staff, or if skills take years to build. Hence there are no artist franchises but many for housepainting.
How is This Business Faring Elsewhere, Say, Overseas?
Search the Web for information how your business is structured overseas: how big are the companies that are in it, what franchises are on offer, etc. Developing economies usually lag behind developed ones by a few years and this gap may be indispensible in predicting the future. In theUSandUKthere are several franchises offering locksmith services but in less developed countries there are no such opportunities. The vast majority of locksmiths work under the generic banner of locksmithy.
Questions Regarding the Individual Franchise
Researching a specific franchise and the questions you will want to ask the franchise manager are reviewed below. But before you make an inquiry consider the following factors:
What is the Requisite Investment?
Naturally, if you don’t have the money, you can borrow it or you can acquire a partner Risk must be calculated so that you don’t ruin yourself financially or threaten the future of your family.
Is the Brand Recognisable?
If the franchise is well-known to potential customers and they associate it with a unique competitive advantage, all the better. But bear in mind that the start-up fee for popular franchises is much higher than for unknowns.
How Strong is the Comptetition?
One must not overestimate this factor, important as it is for one’s potential market. There is room in the market for all who succeed in carving out their own niche. There may be as many as 30 radio stations and as many banks advertising on them in a capital city. Also, products in different price categories cannot be considered true competitors. There are hardly any people out there who cannot make up their minds whether to buy Tata or a BMW.
How Long Has the Franchisor Been in Business?
The experience of the franchisor and the volume of franchises sold may be an indicator regarding the maturity of the chain. What matters to you is stable growth and the positive history in providing services to the franchisee.
