Step-by-Step Guide to Buying a Franchise
Step 3: Select the Best Franchise System for You
If you’ve determined that franchising is right for you and you have a deep understanding of the important trends impacting a potential business, it’s time to think about what kind of specific franchise makes the most sense for you.
Assess Your Interests
Some franchising consultants will tell you that it’s not important to have a deep-seated interest in the franchise you’re planning to purchase. Anyone, they say, can operate a pizza parlor or an elder-care service. While that may be true for some franchisees, it’s also important to have a passion for your business. You’ll be spending many hours in the industry and you should be attuned to what’s going on at all times. Making sure you’re “doing what you love” can help you weather the tough times.
This doesn’t necessarily mean that it needs to be in the same industry in which you’ve always worked. Do you have hobbies or interests outside your career that match a franchise opportunity?
Assess Your Skills
Now it’s time to honestly assess your skills and make sure that they match the requirements of the franchise business. For example, if you’re considering a mobile storage box business, you’d better have mechanical skills because your business is going to be dependent upon trucks and forklifts. The correct background will help you hire the right people and know when you’re getting costly, incorrect advice.
Or what if you become a franchisee in the retail industry? Do you have strong hospitality skills and a disposition that encourages customer loyalty? Many franchises are low margin businesses, and it’s important to go into them with a skill set that roughly matches the needs of the business. Relying on the franchisor to fully train you in a couple of weeks is unrealistic.
Assess Your Goals
As a prospective franchisee, you should think carefully about your goals for the business. Do you want a reasonably safe, predictable income stream? Do you want to grow aggressively and achieve significant wealth? Do you intend to work this venture for 1, 5, or 20 years? Be very specific and concrete about your income goals, especially for the first 2 to 3 years. What are your other goals? How much are you ready and willing to work in the business? Do you envision eventually selling the business, or do you plan to keep it in the family? Asking yourself these kinds of questions beforehand will help you in the franchise selection process.
Narrow Your Search and Pick a Sector
Once you’ve determined your goals, skills, and interests, it’s time to articulate the types of industries or sectors that match your criteria. You don’t have to be too specific at this point, but it’s important that you start narrowing down the field. Another way to help this process is to write down what you don’t want to do. For example, you might determine that you want to be in hospitality but not in food service, or that you want to work with children but not in a child-care environment.
Continue to Step 4: Pick Two or Three Franchises to Pursue
Return to Step 2: Understand Important Franchise Trends