Given the benefits of franchise, it is important to really consider what you can really give in return to the multiple advantages that franchise gives you. Ask these questions to yourself before buying a franchise.
There’s no denying the fact that buying a franchise gives an individual the opportunity to become an entrepreneur in lesser investment as compared to the investment in a fresh new business. You enjoy certain privileges by becoming a franchisee – becoming an entrepreneur just by investing your money into someone else’s business idea.
Given the benefits of franchise, it is important to really consider what you can really give in return to the multiple advantages that franchise gives you. A few questions must be asked from your inner entrepreneur and investor so that you don’t end up regretting your decision. Here are some of the questions you should ask from your inner conscience before really jumping into the fireball.
Why Should I Own a Franchise?
There will always be several things that entice you about a brand, but your response should reflect upon what you want to achieve. Franchisors call out to franchisees for their own benefits; hence, they would give as much convenience as possible to the prospective franchisees in order to achieve their own goals. However, it’s your responsibility to take action for what you want from franchising. Do you want to pursue it as a hobby or you want it as a primary source of income? Do you want to invest your money or you want to taste the success of entrepreneurship? The first question to ask yourself is: What makes me think of buying a franchise?
What are my Strengths?
Examining your own skill sets will help you determine your potential franchise business. For instance, there are many different roles that you have to take on as a franchisee, for instance, leadership, managerial skills etc. So, if you can perform the required roles, franchising is for you. If not, then it would be better to start some other venture or choose a franchise that provides you with the opportunity to make use of your skills.
How much money do I possess?
Now that you have decided why you want to get into franchising, you must keep a check on affordability. One thing to remember is that you can’t invest all the money you have in the initial stage of your business. Inventory of your capital is also quite important in the sense that you should have enough money to live off while you are struggling with the business.
Ask yourself if you have enough money to invest on such a big venture like buying a franchise.
What are the Risk factors involved?
Once you have given a thought over all of the above-mentioned points, you should be able to calculate the risk factors involved in a business. Go thoroughly over various franchise opportunities and conduct a research about its franchising history. It will be easy to calculate how much risk you could bear in the losses.
What’s my Exit Strategy?
Your exit strategy plays a big role in deciding which franchise you should choose depending on how long are you planning to be a franchisee: five years, ten years or till you pass it on to your heir? (that’s totally based on your choice and your franchise agreement) It’s important to decide your strategy for exiting the franchising system as there are not many franchisees that are scalable in the first place. So, make sure you have decided on how many years you are going to stay in the business so that you don’t have to unwillingly continue being a franchisee.
Once you get the answers to these questions, you just have to choose the right franchise and you’re good to go!