What holds many people back from owning a business is fear. Most are afraid the business will fail, and the investment will be gone.
How do you improve the chances of success and decrease the risk of entrepreneurship?
Answer: Explore Franchise Opportunities
Seven Common Fears of First-Time Franchisees
To reduce the risks of owning a business, many people invest in a franchise. However, even when considering tried and true franchises with outstanding track records, you can expect various fears to interrupt your thoughts of owning one.
Here are some straightforward solutions to dealing with those annoying musings.
1. Investment Risk
To minimize risking your significant investment, pick a franchise where the owner’s role fits your strengths and skills. Love what you do on a daily basis and how you spend your time. Match a franchise to your superpower!
2. Underfunded
Many early business closures are due to having insufficient cash on hand or working capital. Franchises reduce this risk in three relevant ways.
First, they are upfront about the total investment amounts and provide these in writing in the Franchise Disclosure Document (FDD). Second, during the fact-gathering stage of a franchise evaluation, prospects are invited to contact the brand’s franchisees. Ask them how much the upfront costs were AND how much working capital reserve they needed. Third, franchises have minimum financial requirements. If you do not have the financial means or the credit history of making the franchise comfortable with your financial viability, they will not award a franchise to you, clear and simple.
3. No Experience
If you have selected a franchise based on your skillset, the issue of having no experience with the industry or business type should never be a concern for you. Remember that franchises provide comprehensive training on their specific business and ongoing support throughout your tenure with the brand.
When you match a franchise to your strengths, you can rest easy that the kind of business you are buying is most suited to what you do best.
4. Making Mistakes
Whether through lack of technical skills or simply making a poor judgment call, you’re scared of making costly mistakes. This is, after all, your first franchise and possibly your first business.
The solution is to verify the quality of training and support provided when you talk with current franchisees who have almost certainly encountered every decision-making situation you will have. So you are just a call, text, or email away from getting great first-hand advice.
5. Being Misled
This is rare, but it does happen. This is why I always recommend working with a team of franchise experts. Start with a franchise advisor, a franchise attorney, and a franchise financing expert. Finally, have an accountant with franchise knowledge.
6. Competition
Everything about the franchise matches you, your wallet, and your goals. But you’re concerned that there is too much competition.
The solution to this fear is to ask a few questions of the franchise representative.
Who are your competitors?
How do you differentiate yourself in a crowded field?
How does the franchise define territories?
Who are the nearest franchisees in the area?
Is the territory saturated? What leads you to this answer?
How effective is the franchise’s marketing strategy?
Just because other businesses are selling the same product or service as the franchise you’re interested in doesn’t mean you won’t be successful. Instead, it could mean that there is plenty of demand to sustain your business.
7. Fear of the Unknown
This is, possibly, the most irrational and most common franchisee fear. It’s completely normal to feel this way when you undertake anything for the first time.
You may consider a few what-if scenarios and plan for them. But overall, even though life throws curveballs, continue to have confidence in yourself to move forward as you have always done. That’s the best way to approach becoming a new franchisee.
Your franchise success depends upon the franchise you select, the quality of advice you receive, and the skills you bring to the business. A franchise has a recipe for success. Be sure to follow the recipe!
Are you ready to overcome your fears and move forward?