How to Succeed with a Franchise
Contrary to popular belief, having a franchise does not guarantee success. Sure, you have the use of a winning brand and product, but it takes a lot more than that to succeed. There isn’t even a guarantee you will get the loan to purchase the franchise, as banks are always hesitant to hand over money for start-ups. Throw those two myths out the window and you will begin your journey with a realistic perspective.
1 – You. You are the first step. What do you have an aptitude in? Where do your core skills lie? What industry have you worked in? What are you interested in? There isn’t much point in spending a pile of money on a business you have little interest and talent in, so make your choice carefully. If you are a foodie, look at the restaurant industry. If you are mechanically inclined, research service or manufacturing franchises. If you have a mind for numbers, consider insurance or brokering of some kind.
2 – Research. Performing proper due diligence can be the difference between success and failure. Research things like demographics and the average family income in the area you are targeting. Will the products and services be suitable for the surrounding customer base? For example, a fine dining restaurant would probably not do well in a low income neighborhood; likewise a fast food establishment would probably not be welcome next to a high-end gated community. Consider what the needs of the area are. If there is already an abundance of vehicle oil change shops, then it may be difficult to make another one viable. When you do make a final decision on which franchise you would like to purchase, research the company thoroughly. What is the success rate? What is the down payment and percentage paid out? Is there a good network of support? If possible, visit an existing franchise from the company and observe the business. Meet with the franchise owner and gain as much information as possible.
3 – Training. Training is one of the most important components to succeeding in business. No matter if you are the front-line sales person or the owner of the company, knowing your product is the key to understanding how to maintain proper function of the business. Then there is the knowledge necessary to run a franchise. If you have not managed a business before, or even if you have, your parent company should provide solid information and support for you as a new franchisee. Ask lots of questions, even if they seem silly. Obviously it is in the best interest of the parent company to help their franchisees succeed, so try and develop a relationship with your company contact. Make an effort to create a rapport with someone in the company, perhaps they will become your franchise mentor. The relationship may prove to be a good move on a day when it seems like the sky is falling.
4 – Be Selective. Specifically, be selective when hiring your staff. Sure, your profits will be a little more if you pay your employees less but remember: you get what you pay for. Seek out the best staff you can. Advertise for staff in reputable places. Trade websites are a good place to start; so are industry specific certification schools. When beginning the interview process have a clear set of honest questions for each applicant. Try to stay away from the typical ones like “Why do you want to work here?” or “Why should I hire you?” Suggest real situations for the applicant to assess and offer a solution to. It will provide a great way to evaluate how they think on their feet, their problem solving skills and their ingenuity. Check all references and confirm educational credentials. This is such an important step that it needs to be stated again: check all references and confirm educational credentials. Why? Consider what would happen if you hired someone based on only one reference, the employee made a mistake causing damage or injury and you find out they lied about their training (or worse, their certification). As the business owner, you are liable for the actions of your employees. So protect yourself and make those calls.
5 – Manage. First and foremost, manage your money. Create a monthly budget and stick to it as much as possible. Extra little things will always come up, so make sure your budget includes a contingency fund. The only way to make and keep money is to manage it carefully. Manage your staff. Don’t try to micro manage, but don’t let them do whatever they want either. Delegate, foster responsibility and creativity, but demand accountability. Human resources can easily be the hardest and most dreaded part of having a business. Make it easier on yourself and take a couple of online human resources courses. The skills you learn will help keep your sanity intact. Manage your inventory. Keep close tabs on your levels to avoid over or under buying and to spot your customers buying trends. Manage your time. Work smart and word hard, but be sure to schedule mental and physical downtime for yourself. There is no point in working 18 hours a day, 7 days a week. You will not be doing a benefit for the business, in fact your decision making skills will become skewed.
6 – Change. Or rather, be willing to make changes that will improve the function of the business. Your parent company will have given you a pretty clear set of policies and procedures to run your franchise by. Some will be non-negotiable, but others can be changed or omitted. Each region and demographic exhibits certain characteristics, what will work on the east coast may not work on the west coast. Therefore, as the franchisee you will need to tailor your business to your customer base and your specific needs. Strike a balance between stagnating and evolving. That is, don’t become set in your ways, but be willing to progress with the market.
If you are looking for restoration franchise opportunities, Choosing a path such as Restoration1 can take a lot of stress and uncertainty from the process. With a solid and established strategy of success – Restoration1 can help you get our business up and running quickly and efficiently and help you turn a profit faster.