Nowadays, people are considering starting a business. Because of the situation the world is in, everyone wants a way to make a profit while staying safe. Some choose to run a small business, while others pick to manage a franchise. But what is the difference?
A small business begins from the ground up, whereas a franchise comes from a bigger brand. Both are business models, but running a franchise under an already-established brand poses less risk and a higher reward, as they have a wide audience. 90% of business franchises succeed, so it’s a smart way to still be your own boss.
1. Check your budget and expenses
You’ll need to have a secure amount of capital to be able to start a franchise. No matter how successful you believe it will be, a business will still require you to weigh your own chips in to make sure you can run it. Can you afford to pay suppliers and staff? What about an emergency fund and legal fees? Sit down with an accountant and go over how much you can spend to run a franchise and how much more you’ll have to make.
Commercial banks are willing to let people take business loans, and there are lending companies as well. But you’ll have to show your net worth to give them some form of assurance.
Fundraising is also a viable option if the franchise you wish to put up is something the majority of your community is interested in, like a good restaurant or a service provider. Set up a crowdfunding page and invite people to donate if your franchise focuses more on the locale. It’s also a good way to generate a healthy buzz once you gear up to open for business!
2. Look over your plan and make changes
Chances are, your plan for a small business won’t apply to running a franchise, so it’s time to revise. Be detailed; include projected investments, returns, data on local interest, and how you can dedicate yourself to running it. If you’ve got plans to set up a physical shop, include them in the plan, too. It pays to be detail-oriented.
Having a well-reviewed business plan also makes it easier for you to secure a loan, as running a franchise can take a lot of money. Commercial banks and brand owners would want to see just where and how you intend on taking the franchise. If you develop a plan that elevates the brand and how the franchise is usually run, you’ll secure a better deal and sleep easy knowing that it will work.
3. Get all your documents in order
You’ll need all of your paperwork to be organized before getting into franchising and opening up a shop. Go through your documents and check if all of your permits, contracts, identification and even receipts if necessary for an extra layer of credibility. A sign of a good business owner is a keen eye and a knack for organization, so this should be a head start for you. If you can, make scanned copies as well.
Getting your documents ready is also useful if you wish to set up a physical branch for your franchise. Things like setting up requests for proposals for architecture firms, zoning permits, and the like have to all be in one handy folder (digital and physical), so you won’t run into any unwanted confusion. And double-check papers whenever you do a bit of cleaning up at home! You never know which documents you might be throwing out.
4. Have a good team behind you
When it comes to any business model, you wish to put effort and invest time into, having a good team is vital. When we say a good team, that includes a reliable accountant and a reputable lawyer. A trusty accountant can help you manage finances and talk you out of risky business decisions, and at times be a confidant for when you feel less than 100%. They can also help you put goals in perspective and help you reach them quicker.
A good lawyer can also help process your documents while avoiding mistakes. The turnaround for some can take longer than others, and any mistakes in the fine print can lead to a longer wait time or larger issues. It’s also easier to have someone in your corner who can translate complicated legal jargon and situations to layman’s terms so that you are looped in. Great businesses require a great team at their helm.
With these, starting and managing a franchise shouldn’t be a daunting task. With the right plan and strategies, it can survive and thrive even amid tough times.
