If you are looking to get a start in business but don’t know where to begin, franchise opportunities can be the way to go. As a franchisee you are effectively paying to implement someone else’s way of doing business. There are both pros and cons to this approach of business but for some it is the only way to go.
One hurdle is of course the fee to get into a franchise. Depending on the industry you are getting involved with the fee may be well worth it. Having a proven business model, established supply chain, and national marketing are all perks that can mean the difference between being successful and striking out. There is generally an initial fee followed by a recurring monthly obligation. These fees cover many of the expenses associated with the franchise and in each case will differ considerable.
While franchises have a cost associated with them the effectiveness of a well done franchise is truly amazing. Working with a refined and proven system will open your eyes to a whole new world of business. In his book the The E-Myth Revisited : Why Most Small Businesses Don’t Work and What to do about it Michael Gerber examines these dynamics and shows how a franchise style model can be adapted in many industries. I must admit I experienced a bit of a paradigm shift when I finished his book. It is all about the system. You may have heard; “you can’t manage what you can’t measure” well, it’s true and successful franchises prove it better than any other business model. Have a reason for doing what you do and measure its effectiveness.
New franchises are popping up all the time and are available in all industries but they do not all supply the same value. I would suggest going with a proven company with an established track record. A properly structured franchise will be worth the investment, a poorly structured franchise will be waste of time and money. Do the homework before you move forward and make sure you know what you are getting into. Entrepreneur Magazine does an annual assessment of the top 500 franchises, the information is quality and it is great place to start.
Regardless of the industry you are looking at getting into keep in mind that a proven system will be more advantageous in a mature, saturated, and highly competitive market than it will be in a less crowded one. A franchise will not be helpful if you are looking to pioneer a new product or service. Operating a franchise is operating a model that is already in place. The processes are structured, supply chains are defined, and training of new employees has been standardized. A franchise will not offer great flexibility; it is the lack of variability that allows them to succeed.
If you want to scale up it is often possible to own more than one of the same franchise. Many of the Subway stores in my town are owned by the same guy and one family is known for multiple MacDonald’s. I suppose once someone becomes familiar with a specific business model it makes sense to continue with what works.
Franchises are an answer but they are not the only answer. As a small entrepreneur chances are you don’t have much behind you to get started which can make the prospect of a franchise harder to swallow. Many people who would be great prospects for a franchise struggle with the idea because they don’t want to over extend themselves. An example would be someone who lost their job and is looking for other options to pay the bills. A franchise could help, but the expense could be high. Going to school is an option but again requires a good deal of time and money. What if there were a low cost, meet you where you are solution, that would have a low startup expense yet offer continued support as your business gets established.
For those of you looking for other options, I will have you know that ShyEntrepreneur is here to help. We are currently formulating a model that will fill the gap between starting a business completely on your own and paying a bunch of money for a boxed solution. Building on fundamental truths of success we are deriving a methodology that can add the value provided by formal schooling, or franchising while maintaining a reasonable expense.