Buying Your First Franchise
A lot of aspiring entrepreneurs have saved enough money and are
still in search of some guidance when it comes to entering the
small business arena. Always be on the lookout for buying a
franchise opportunity that is not seasonal but can still rake in
the cash for you.
1. Budget Everything
First and foremost, you need to have a budget. Having a set
budget will enable you to think of how much money you can
actually spend on your franchise. It is best to be in touch with
reality here since buying a franchise, as compared to just
starting a small business from scratch, is not only risky but
comparatively costly as well. So you need to be fully aware of
what you are putting your money into and if it is truly worth
all that trouble.
2. Choose Wisely
This brings us to the next highly important thing that you need
to consider when buying a franchise: the countless franchise
opportunities out there. Keep in mind that the success rate of
buying a franchise is lot higher than just a starting small
business. Look for franchise opportunities that are considered
hot.
Still you have to think twice (or maybe a million times) before
buying a franchise. Not only the ones that are deemed as hot but
for any franchise. One day their products might be selling like
hotcakes and are considered as a hot commodity but what about
after the season or at the end of the year? Are they still hot?
Are they still selling? Some franchise opportunities
unfortunately fall flat on their faces after they have over
saturated the market with their products.
3. Understand The Business
When it comes to finally committing to buying a franchise, the
franchisee must fully know and understand the policies of the
franchise opportunity that he or she is actually buying. The
contract for example, should always be understood well by the
franchisee before signing it. Mere coaxing from the company and
just mere verbal word play are something that companies use on
new entrepreneurs just to make them see it their way which is
why when it comes to buying a franchise, entrepreneurs must
always proceed with caution.
A good franchise opportunity should be able to provide the
franchisee with various benefits and services that the
franchisee is entitled to from the moment that he or she signs
on to buying a franchise. Such benefits include the franchisor
providing the training, marketing, and support needs of the
franchisee. Franchisors that do not comply with such benefits
should be seen as dubious since they are just merely trying to
make some extra profits from the franchisee and are not exactly
interested in helping him or herself out in this small business
venture.
Before signing the bottom line, consider the following:
1. Proper Training
Most franchisors will actually offer to help your small business
to get some added leverage by helping you first establish, run
and as well as expand you small business. Buying a franchise
clearly has its perks since newly started entrepreneurs will
have the opportunity to learn the ropes from established
businesses.
2. Financing
Contrary to popular belief that you must have a lot of money for
you to be able o acquire the franchise of your dreams, a lot of
franchisors actually provide their franchisees with some highly
flexible financing options.
3. Proven Products and Methods
When it comes to buying a franchise, it is highly important that
you take not of the ones that are really in-demand and are not
seasonal. When it comes to having a franchise as compared to
starting your own business out of nothing, you will actually
have the confidence at heart that your products and services
will sell because it already has a proven market.
4. The Cons
- Fees Franchisees always face this problem when it comes to
buying a franchise. Since franchises are highly expensive, there
are usually ongoing payment that the franchisee must pay to the
franchisor as a result of the royalty fees as well as the debt
service that one must pay for when it comes to buying a
franchise.
- Loss of independence For those who are buying a franchise, you
need to be reminded that since you did not come up with this
business idea all by yourself, you must always adhere to you
franchisors strict rules and regulations when it comes to the
upkeep of your franchise. You should be able to adhere to the
company's good image and quality of products and services.