If you are a small business owner, there are some important thing to keep in mind when considering franchising. Franchising your business is a big step and it can take your business to the next level more quickly. But first, you need to have a plan and examine some key elements of the process before continuing.
KEYS TO SUCCESS
Some of the factors that determine your success involve things you can do at the front end to make the franchise process more secure. Others involve securing capital. It takes some serious planning to ensure that you are ready to grow your business and franchise it out to others. Here are 5 major things to keep in mind before making that move.
THE BENEFITS OF FRANCHISING
There’s no doubt that franchising your business will take your business to a higher level. It gets your ideas and your brand out there for others to see so that you are no longer limited to your small local area. Franchising is a big undertaking but it may well be worth it when you see the increased revenue you will obtain from your efforts. All major corporations eventually franchise on some level, unless they are an internet-only company that makes all of its chief revenue from online sales. The internet is its own franchise. You literally have access to everyone on earth from online. Not so in the real world, though.
KEY THINGS TO KNOW BEFORE FRANCHISING YOUR BUSINESS
1. Know your franchisees as well as yourself. This may sound simple but it is one of the most important things to remember before you set out with a franchise deal. If you do not know who you are dealing with, who your franchisees are, and what kind of job they will do, don’t do it. Remember that when you franchise your business, you are unleashing your business to the world by way of the franchisees. This means they represent your business, your ideals, your ideology, and your business in all respects. Think of the franchise as an extra arm that you are using to further your cause. So ask yourself if you can trust them to first do no harm and then look into what they can do for your business that you cannot do yourself.
2. How much will you charge your franchisees? This is an important question too and one that must be answered. This will require sitting down with an accountant or other expert and deciding exactly how much it will cost your business to build, maintain, and sublet your business at a new location. Some business owners charge $50,000 or more for one new location. But you need to know your figures before you consider how much to charge.
3. Think about further expansion on the horizon. Remember that a business person must always look down the road, further than where you are right now. If you franchise out to one franchise today, how many more franchises do you plan to add in the future? Will this depend on how successful your first one is? How much can you afford, based on current revenue? This is where your financial experts come in, so rely on them to try to give you an accurate picture of what costs are involved. You don’t want to expand too quickly, but you should always scan the horizon for growth opportunities.
4. Think of location. Just like in the real estate business, location is everything when it comes to franchising. So think about how successful your business is likely to be when you put it in the location you are considering. You will need to do some research on this and consult with local census information to see if the population and targeted audience is likely to require your services or products.
5. Keep a steady cash flow at all times. This is the toughest one when you are trying to expand. It will cost money to start a new franchise outside of your main area. You will make money too in the long-term, but you do not know how much until you get it set up. So this means you will need a good cash reserve at the front end. Think about your resources and where you will tap into extra cash when you need it.
THE IMPORTANCE OF A BUSINESS RESERVE
If you are short of extra funds and you wish to grow your business by franchising, that could be a problem for you. You need that extra capital to tap into at times when the money is short. You need to be able to grow your business and create a chain of stores so that people will come to know your brand. But having a business reserve is one of the most important factors in determining the future success of your business.
WITH A LITTLE HELP FROM MY FRIENDS
In the now classic song by The Beatles, “With a Little Help from My Friends,” the song speaks of reaching out to those who can help in your time of need or lack. It speaks of a time in the writer’s life when things were not so good and when they were in a sort of struggle with problems in life. This was true of many people during the 60’s and it is true sometimes of a business owner as well. There’ll be high times and low times. But what you do when you hit those low times will determine your success. You don’t want to depend on others all of the time, but when you do need help, there is someone you can turn to.
Advanced Funds Network understands the struggles a business owner has when they are trying to take the next step toward growth. They have a large network of loan partners who understand too. So, when the going gets rough, call on them for advice and loan help. Sometimes all it takes is that extra hand that can take you to the next level. But you’ll never get there without asking.