The most important quality for every entrepreneur is confidence. But on the other hand over-confidence or lack of confidence in a franchisee can kill his franchised outlet. Read on to be better informed about this
Do you think that over-confidence and business success go hand-in-hand ? If yes then you are highly mistaken as over confidence in most of the cases ruins a business. Most of the aspiring franchisees are confident upto the brim that they can run the business successfully. Self confidence is must for every entrepreneur to build a positive and realistic perception of themselves and their abilities. But sometimes the franchisees after taking the franchise may develop a feeling of having lack of confidence or over-confidence. In both the cases the franchisee would have a tough time as these conditions lead to failure. In the former a franchisee would remain tense and anxious. He may always be reluctant to take any action for the benefit of the business or to take a risk as well. He may blame himself for any amiss in the business. These will, sooner or later, destruct his business.
On the other hand over-confidence in most cases is the prime factor for failure of every business. Inspired by the brand name and without doing any proper research aspiring entrepreneurs take up the franchise thinking that positive attitude would be beneficial to the success of the business but apparently over-confident entrepreneurs tend to jump into new business ventures causing the ventures to flop.
Over-confidence leading to failure
Over-confidence on the part of a struggling franchisee can make him taste failure. Given below are certain points to confirm this belief:
Proving oneself: While selecting a franchise, take a franchise which has a high success rate. Many franchisees make a blunder by selecting a franchise which has a number of failing franchisees behind it, hoping to make it work inspite of the rate of failure. Proving oneself to be smarter may not be so profitable in such a situation. There can be something wrong in the franchise concept, which the franchisor may not inform you initially.
Consider capital and ROI: In certain cases over-confident franchisees take an expensive franchise believing that they will be able to make profits very soon. Initially to pay the franchise fee and other expenses, franchisees tend to take loans from banks and other sources and which cannot be repaid at the given time. This can raise a big problem for them as they may be asked to forfeit their outlet as well.
Carelessness of franchisees: Over-confidence among franchisees may lead them towards carelessness with the business. Assuming that the business could be run easily, they may neglect small but important aspects of the business. It may lead to failure.
Rapid expansion: Most over-confident franchisees commit another blunder by expanding their business in the initial stages. Seeing the early success of the outlet and gaining confidence, they may become multi-unit franchisees, believing that they would be able to run all the stores competently.
Lack of marketing strategies: In their over-confidence a few franchisees do not adopt any unique marketing techniques. In belief of making the outlet work without any assistance from media or with the support of the franchisor as well.
If you are also an aspiring entrepreneur the above given guidelines should be remembered while running an outlet. It is good to be self-confident but over-confidence can lead to failure.