It is possible to taste success after failure. Many first time franchisees fail in their ventures and consider themselves inefficient businessmen. But one must not lose heart so soon. Let us have an insight into this view
With the growing popularity of the concept of franchising, more and more entrepreneurs are jumping in to try out this profitable venture. However, success cannot be guaranteed in any business venture and same is the case with franchising. Many aspirants enter into this domain with high expectations to make it big. But, their hopes shatter soon as they face the reality. Such failure can be due to high maintenance cost and no profits, lack of general business skills or little or no emotional support at home. After their failed venture, franchisees often blame the franchise concept as well as consider themselves incapable and inefficient of running a business. They quit from the franchising arena with this incapability within their conscience.
Reasons for failure
The causes for the failing of any business can be many, but one must have the courage to see this as just another turning point in the business.
Ineffective franchisors: A franchisees is successful with a feasible franchise system. Many a times, a franchisor might not provide the required support and training to the franchisees. Thus, leaving the franchisee completely shattered and helpless.
Inappropriate location: An apt location in accordance with the business concept is of prime importance. Many a times, a franchisee fails only because of an inappropriate location.
Market diffusion: Competition is fierce in franchising. The market may become saturated with businesses in your industry. Thus, failure to move out to a different area or buying a franchise altogether in a different industry may lead to failure.
Wrong choice of the industry: A wrong choice of industry can lead a franchisee to failure. Passion is the ultimate way to success. An entrepreneur must be passionate about his/her area of interest.
Inefficient competence: Every franchising venture seldom guarantees success. One must have the competence to handle the franchising venture with ease. Therefore, inefficient strategic skills lead a franchisee to failure.
Over expectation: Many franchisees fail only because of unrealistic expectations about the franchise ownership. You cannot build a castle in a day. Like any other business, it requires hard work, patience and dedication.
Unsuccessful franchisees should always remember that there are lessons to be learnt in failures. It is well known fact that failure teaches us more than success. This article is particularly for those entrepreneurs who jumped into the franchising arena but soon opted out of it keeping their failure in mind. In stead of running away from failures, it is always advisable to fight and overcome your weaknesses. All those franchisees who have failed in their venture and are on the verge of quitting should keep in mind the following points:
Failure is the best teacher
A failed franchise can make the franchisee rich by providing the real-market data and managerial experience that is unavailable in any MBA classroom. You as a franchisee must study and understand what your weak points were that failed your outlet. Ask yourself, ‘What are the areas, where did I go wrong, and how can I improve’. Whether there was a weakness in managing the outlet or was it the business concept that did not attract customers, can determine the success of your future ventures. Improving on past business decisions and deciding which tasks you excel at and which you are better in delegating can also help you in the future.
Keep your mistakes in mind: A smart franchisee is one who learns from his mistakes instead of repeating them. While starting anew it is a must not to make similar mistakes. Select the concept, franchisor and the employees with caution as these are most important in the success of any business.
Setting low targets: Failed franchisees must have realised that aiming too high in the initial stages is not a good idea. Always set small achievable targets rather than big targets that can bring in frustration and failure.
Keep daily expenses apart: Agreed that you must have lost money in your previous franchised outlet but investing all your finances in taking up another franchise is not advisable. It is always recommended to keep your business and personal life separate. Similarly, divide your business finances and home investments according to the need of your family. Risking your family finances in setting up any business tends to be frustrating. More so if the business does not work profitably.
Failed or failing franchisees should always strive hard to make their business work. Franchisees instead of blaming themselves and the concept, should utilise time in researching for better business deals when their first venture was unable to bring them profits. Apart from this always remember that the past failures are stepping stones for the future success.