My HMO Journey: No rest for the wicked as we approach...
Have you ever toyed with the idea of owing your own business- but ultimately found the fear of failure overwhelming?
The fear is not misplaced with the business survey by NatWest regularly revealing that some four out of five independently owned businesses go out of business in the UK within their first two years of existence!
Luckily, franchising offers the opportunity to go into business – for yourself, but not by yourself.
We know that thousands of people dream of owning their own business but often don’t have the knowhow, managerial skills or breadth of experience to start their own company from scratch – and that is where franchising can really help.
Franchising allows you to go into business without suffering years of trial and error; hopefully the mistakes have been made and rectified, the systems tested and augmented and the business processes developed through experience.
Additionally, you will benefit from all the support of the franchisor, including but not limited to training, marketing, finance and sales, plus on-going operational support by way of regular business reviews, ‘best practice’ communication and comprehensive marketing collateral and programmes
Furthermore the franchisor will be keen to upgrade its systems and introduce new products and services – all of which will benefit franchisees.
The advantages of going into franchising are clear but before you do ‘take the plunge’ it is important to reflect on what exactly you hope to accomplish
Ask yourself the following:
‘What are you trying to achieve both in your life and in business and how will owning a franchise help you to meet these objectives?’
Determine what you’re interested in – do you want to be ‘on the road’ or working outside? Do your skills lie in building relationships and if so would business to business suit? Or do you see yourself in a retail environment? Where is your strength? What is your interest? Remember first and foremost that franchising is not a job so do something that you will enjoy!
Once you know the type of environment you want to work in then indentify the key industries that match – could it be education? Maybe printing? Possibly branded merchandise? Garment alterations and repairs could be an option.
This will lead you to a number of franchisors in each given field and you will need to analyse the strength of each organisation.
Visit each and examine their track record, their longevity, the quality of their management team and their visions for the future – and ask to speak to their franchisees.
As you get further along the franchise road and you narrow down the franchisors that appeal to you then you will get to a point when you need to do a Business Plan and you’ll need to read and digest Franchise Agreements.
At this stage get professional advice – use a good accountant to help you prepare a Business Plan and seek out a bfa accredited lawyer to read through and advise on the Franchise Agreement.
My Final piece of advice – don’t over invest. Generally the banks will lend up to 70% of the toal cost of a franchise so if you have £20,000 to invest then look for a franchise costing £50,000 - £55,000 – not £100,000.
Every business takes time to start producing profits and you do not want to spend all your time worried about repaying a series of loans when you should be spending your time dealing with customers.