Valuable Tips on Buying a Franchise

By: Nicholas A. Bibby

First and foremost, franchising demands that you "follow the system". Whether the business is a major food brand or a low-cost home based franchise, you must be a team player who's willing to follow the rules in a rather "independent" fashion. So, if changing the order of things is among your favorite pastimes, think seriously about another form of self-employment because you won't be happy with even the best franchise. (And by the way, if you find a franchise without a proven way of doing business then run like hell. The best franchises simply have the best systems.

Second, you must have adequate capital if you are starting a franchise business. The reason so many people start out as independents, as opposed to a shiny new franchise, is that they do not have enough cash and/or borrowing power to jump into the deep end of the pool. Therefore, they start on a shoestring and hope for success. And consider this tip: if you cannot afford a franchise in the field you are considering, you may also be under funded as an independent. This is not true in all cases, but it's worth thinking about. (And while on the subject of start-up capital, do NOT be fooled by numbers dealing just with total investment for the "business". Include funds to cover living expenses to a point well beyond the anticipated break-even. You and the kids have to eat while the business is coming of age.)

Third, do you know your business? This might sound like a foolish question to ask, but unless you are a master of your chosen concept, where will you find information, training and support after you open the doors? (Skill and capital are critical elements to business success. So, if you are choosing a non-franchise path, be very that sure you have an adequate supply of both.)

Fourth, do you and your chosen business match one another? Frankly, I consider this the most important of all elements relative to any small business, be it franchised or otherwise. Self-employment is a truly committed relationship, if you don't have a deep and abiding love for the business you are entering, don't say, "I do." Even the best franchise opportunity on paper will produce a stressful life if it is not for you. You probably won't last in a business that you don't like, and you definitely won't be happy showing up everyday. Find a venture that you love. The three-quarters of the adult population that is unhappy at work, is unhappy because they don't have a love affair with their work, but they can stick it out because they get a paycheck and can go about the rest of their lives. The entrepreneur however, never leaves their business (mentally); they think about it all the time. In my private counseling practice I see many people who have entered businesses without first considering the "lifestyle" demanded by the commitment. They pay a hefty price as they slave away for their purchased master.

Choose wisely among your options, be they franchised or not.

 

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