Business ownership is scary when you’re not sure about the success of your enterprise. Thankfully, there are ways for you to call the shots and still make a tidy profit. These ways are called franchising opportunities and there are literally thousands of them in the United States. According to one expert tally, there may be more than 750,000 franchise businesses in the whole country.
Some people who want to become franchise owners only consider two things when they select a franchise. These are the cost of the franchise and the possible profits. However, this is very shortsighted and could lead to your eventual ruin.
The following are six important factors to think about when opening your own franchise business.
What does the Community Need?
You may be very tempted to open a sandwich restaurant simply because they have an attractive marketing campaign. But before you hand over your money and begin construction, ask yourself if your neighborhood or community really needs one. If you’re opening a Subway or similar business, first do your research if you can look forward to a lucrative market.
Do surveys or ask around what your community wants or needs. Depending on what you find, you may discover that your neighborhood may not need a sandwich shop but it may need a child care center franchise or a laundromat. Identifying if there’s a need will determine the success of your business.
How Many Competitors in the Area?
Franchise owners can be lucrative. Top-earning franchise owners can rake in more than $200,000 in profits every year. Meanwhile, more than 37 percent of franchise owners may make less than $50,000. This all depends on how much competition your business may have in your area.
Competition can stem from other locations of the franchise of your choice. Most operations make sure that they don’t have too many locations in proximity to avoid competition. Other franchises may muscle in on your profits, especially if they offer the same products or services as you do. Once again, do your research and make sure your business won’t have to struggle against so many rivals.
What are Your Job Experiences?
Unless you have plenty of capital, you will be one of the first employees of your franchise business. So it’s important that your previous job experiences and skills be able to contribute to the profitability of your new business.
Search your previous employment records for any skills or training you can transfer to your franchise. If you used to provide technical support or computer skills, you could set up your franchises electronic systems. If you used to be in advertising, maybe you can craft the ad campaign for the lead up to your opening day. Your previous experiences can be more helpful to the future of your franchise than you know and it’s important to factor them in.
New or Established?
New businesses are always flourishing and making their plans more accessible through franchising. However, when you’re thinking of acquiring one for your own business, you will need to consider whether you want to join an established franchise or a budding new enterprise.
New franchises may intrigue more customers and bring something new to the table, but established franchises already have a market of their own and more rigorous protocols. You have to weigh the pros and con for both new and established franchises and figure out which one works better for you.
What Support Do They Offer?
Speaking of established protocols, one key deciding factor between which franchises you should choose is what kind of help do they offer their franchisees. It’s typical for a franchise business to provide training during the beginning of your journey, but what if you need support down the line? Do they offer new training seminars for updates on their strategies? Can you rely on them for assistance if you run into problems with supplies or logistics?
Choose a franchise that will have your back if you need assistance because their help may mean the difference between making a profit and closing down.
What Are Your Interests?
Finally, you must also consider what you want to do. Your drive and determination are key factors to the success of any business, but so is your passion. If you see that a laundromat business may be the most profitable choice, ask yourself if you can envision running the laundromat for years on end. If not, you have every opportunity to choose a different franchise that could hold your interest.
Purchasing entails spending thousands of dollars and represents months of work. You need to make sure you have the right choice to ensure your resources and time aren’t wasted on an unprofitable or uninteresting franchise.