It’s the New Year and what better time to set yourself new goals for the year – including becoming your own boss! You’ve got your finances in order, you have business experience and management skills or you’ve got the confidence to lead a business and create your very own empire.
However, you still have one very important decision to make – what franchise business would suit you?
There are so many different franchises available in the Australian market, it can make the decision making process quite difficult. Just as every person likes their coffee in a certain way, it is important to choose a franchise that suits you best.
To help you get your New Year rolling FranchiseBusiness.com.au presents six helpful steps on starting your own franchise in 2013.
1. Determine your objective
It’s important to determine why you want to buy a franchise. Do you want to work in a business that you are passionate about? Or are you interested in purchasing an investment object to increase your earning potential? Knowing what you want will not only make your search process easier, you will also be able to find your ideal franchise faster.
Start your research through your interests and once you find one that suits you, consider the budget. There is no point in choosing a franchise that does not mean something to you. A passion for your work directly correlates with your natural ability to perform. When you are passionate about your work, you are more likely to be good at it, which would then give you higher chances of success.
If you are more interested in becoming an investor of a franchise (not wanting to be directly involved in the day to day running) you should further refine your search for franchises that are suited for investor contribution.
2. Research your target market
Many larger franchises research their target market in order to determine where would be the best place to put their business. They investigate the location’s demographic, consumer demand and whether the traffic is a good match to the business.
However, if you plan on buying into a smaller franchise, especially mobile or home-based, you will need to do your own research. Investigate the areas where you might like to establish your business, research the demographic and the potential consumer demand and also study the existing competition.
3. Find out your Unique Selling Proposition
Gloria Jean’s Coffee and Domino’s Pizza both provide commodity-like products in the very competitive food and beverage retailing industry. Yet they are able to attract new customers, hold a big position in the market and consistently deliver on their products.
What is it that made Gloria Jean’s and Domino’s attractive? What makes them stand out from the others? A very important part in choosing the right franchise is to understand the business’ Unique Selling Proposition. Investigate what makes the franchise different from the rest; it could be the type of product or services, or providing a unique customer service experience.
However, make sure the Unique Selling Proposition the franchise offers has longevity. Don’t be fooled by businesses that buy into fads or trends that will eventually fall out in five years time. Always research to see whether the franchise’s product or service is sustainable.
Understanding your business’ Unique Selling Proposition will make it easier to attract customers. Always make sure you follow through your unique offer every time in order to create and retain a relationship with your client base.
4. Ask an existing franchisee about the business
Franchisees are the best people to ask when it comes to understanding the insides of the business. It is a great way to learn how the business establishes their relationship between franchisee and franchisor.
A franchisee’s length of time in a business can tell you a lot about the franchise. If a franchisee has been in the business for a while (say five years or more), it shows that they enjoy the work and money they make from their franchise.
High franchisee turnovers usually indicate lower than expected profits or a lack of fulfilment and enjoyment in the job. Always do your research and don’t be afraid to approach owners of a franchise you’re interested in to ask them about the nature of the business.
5. Align the business to your values
Finding a franchise that shares your values is important. You will feel more comfortable being part of an environment that also believes in the same standards and ideals. Values in a business are not just limited to the internal stakeholders (like staff and managers in the franchise) but also the customers, client base and the external stakeholders within the community.
More and more businesses are becoming mindful on the environmental and social issues around them. A lot more franchises are tying themselves with a charity, sponsoring community projects or sports teams, supporting fair trade or even refusing certain products that are harmful towards the environment.
Another important value you have to consider is the franchise’s transparency in their processes. You would want to be part of a franchise where you can easily see how and where your investment is going and whether it is being used to benefit the business.
Be wary that not all franchisors offer this level of transparency. Make sure to research the franchise’s operations to ensure they align with your values. The last thing you will want from your business is to be caught off guard or disappointed.
6. Ask an Expert
Finding the right expert for franchising advice can be a frustrating process, especially when you don’t know where to start looking. Luckily, there is information out there that can make your searching smoother and easier.
Online business directories, like FranchiseBusiness.com.au, are one of the best places to start researching for franchise experts and advisors. Online business directories will provide you connections to experts already part of the industry and services required for the purchase of a franchise business.
Associations, such as the Franchise Council of Australia (FCA), offer more than just franchising expert advice. The FCA allows you to access the history of your interested franchise including information on any potential risks involved in that particular business. Associations like these will usually have connections with industry experts. Take initiative to get in touch with a franchising association and start making connections to an industry expert.
Franchising expos provide great opportunities for both newcomers and existing business owners. These expos are regularly held throughout the year and feature a variety of franchisors, franchisees and franchise experts and services all showcasing their business. Attending an expo will give you the opportunity to make connections in your chosen industry, make friends with existing franchisors and franchisees and talk face to face with industry heads. It is also a great way to solidify any research or even discover something better!
Finding the perfect franchise can seem like a long and winding road, but it is not impossible. As long as you have the right resources and advisors on hand to help you make the tough decisions, your dream in achieving a successful franchise business will more likely become a reality in 2013.