IT'S ALL ABOUT YOU
in this article:
Glenice Hibbard suggests some smart things to think about when buying a franchise
All fired up and ready to get into business? Great! Let's get started...
But starting a business doesn't begin with the business itself: it begins with you and what you bring to the party. You need to know yourself. That means knowing your resources - personal and financial.
There is plenty of advice available elsewhere on this website regarding financial resources for your business so I'm going to focus here on knowing the personal resources you'll need for business. There are three parts to this:
- To make your business work, you must have what it takes. Not everyone does.
- You will do much better - and have a whole lot more fun - if you are working at something you love and are passionate about.
- And, to get the best results in a franchise business, you'll be most successful if franchising is the right fit for you and you understand how it works.
Let's look at each of these three areas separately.
There are certain qualities you'll need in business. Most successful business owners are success-oriented and driven by a need to achieve. It's not talent, not luck or ‘getting the breaks' that decide where you'll end up, but self-motivation, enthusiasm and drive. Scratch a successful person and under the surface you'll find qualities such as focus, self-reliance, direction and determination.
It's clear that these are all ‘success traits' - the personal qualities that equip people for success in business and determine what they can achieve. So steel yourself: to make the business a success, you're going to need a number of these traits.
The good news? It's a one-time trip. The qualities that you need to be successful don't change; they are always the same regardless of the field you enter. Acquire them and you'll do well at whatever you set out to achieve.
Do you have the right personal qualities?
- Organisational skills
Look especially closely at perseverance - a willingness to persist even when times get really tough. Sometimes, when we try something new, it is more difficult than expected. In any business start-up, it takes time for customers to learn about the business and give it a try. Things can get tough - expenses can mount up and sales lag behind. Getting started and getting up to speed takes time. A major miscalculation that start-up owners can make is planning as though their businesses will be fully operational from day one, with all systems in place and everything firing on all cylinders. Even with a franchise, that probably won't happen - you need to allow time for all that training to sink in, for certain tasks to be become instinctive and for your team to gel. It doesn't happen instantly.
Successful people have an ability to pick themselves up and keep going whenever things don't work out the way they want. They look for ways to make things work. You'll need to be able to think on your feet and respond to things that you can't foresee before you start.
Are you anticipating business days filled with serving customers, meaningful meetings, business wheeling and dealing and money rolling in? In fact, you're likely to be up to your neck in other things that have to be done, too. You'll be spending a lot of time doing paperwork, managing the business and people, getting a handle on what makes your business really work. You'll be putting out fires (not literally, I hope) and making your own tea. You'll be taking care of things that, in established businesses, are handled by other team members. That's not the case now - you're it. The buck stops with you.
What business or people management experience have you had? Lack of general management know-how is a major reason for business failure. A business doesn't run itself. Good management is key to business success. You have to organise, control, and direct the operation of the business; keep the books, analyse accounting records and do the short and long-term planning. You must have or acquire the necessary skills to manage your franchise.
Have you or any member of your immediate or extended family ever been self-employed? Are you prepared for the reality of the small business lifestyle? You'll be working long unsociable hours - evenings and weekends - particularly at first. To what extent have you done this before? How many hours a week are you prepared to work in this franchise? Initially and ongoing? Are the hours you're prepared to put in going to achieve what you need? Are they realistic? Are you prepared to do what it takes?
How will your family cope? How will you balance time between family and work? How will you balance time you spend working hands-on in the business versus working on the business behind the scenes? Can you actually commit to running your own business? Do some really honest soul searching.
Starting a business is a major commitment. If you're afraid of long hours, hard work, hate risk, aren't committed to doing whatever it takes to win - do yourself a favour: stop reading and send this article on to a friend. You don't have what it takes. Face it, and get on with your life.
It's not all bad news. For those of you who are still with me, here's some good news - you can minimise the risk. And you can convert long hours and hard work into money and have fun in the process. The way to do that is to...
Step number two in starting a profitable franchise is to find the right business for you - something that challenges, stimulates and satisfies you. Your business must enhance your life, not run it. Here's the secret:
- Do work which matters to you...
- ...which allows you to earn the money you need...
- ...to live the life you want.
Do that and you won't face a lot of the stress and strain most business owners deal with every day. Hard work and long hours won't be a problem, because when you're doing what you love your efforts are a pleasure, not a chore.
Choosing what is right for you requires you to learn about yourself, decide what's really important, discover your passion - and then select the right franchise to get what you want. But be truthful.
While franchisors provide training and often ‘no experience required', it makes sense to play to your strengths and use any special skills and interests you have. What franchises will really suit you? Do you have the skills needed to run the business or the ability to learn them? Can you do the work required? Consider the rôle you will be playing in the franchise: front line, hands-on operational or behind the scenes administration and management. Is that what you want to do? Does it push your buttons? Will you enjoy it?
Most small businesses need sales and communication skills. Do you like dealing with the public? Are you comfortable selling to potential customers? How do you feel when you have to interact with people you don't know? In your ideal work environment, how often would you interact with strangers?
Ask your friends and family what kind of business they see you succeeding in and listen to the answers. How does your family feel about your choice? What does your partner think? Are they completely supportive? Can they help you when you need them? Is your business plan based on them participating? If so, what happens to the business if they change their mind or have other commitments? Most franchisors interview both partners. They know that even if you work hard you'll still need the support of your family to keep up the effort involved. Do they share your commitment and vision? Who will do what - in the business, and at home?
Will this business suit your lifestyle? Do you love to watch the kids play rugby every Saturday morning? Does your club meet every Thursday evening? You may well not be able to do that for a while. Which is more important?
Does this business really fit with your self-image? Can you really feel happy down at the golf club telling people you are no longer the sales director of a national company but now own an XYZ franchise? Is it something you feel really excited and absolutely passionate about - proud to be associated with and comfortable talking to anyone and everyone about?
Do you have a network of contacts in the proposed territory? How could these people help you build your business? Your network is your net worth.
Remember why you're going into business in the first place. If you ask any business owner why they work for themselves the responses are pretty much the same - to make money, share it with those they love, spend more time with family and friends, have the freedom to do what they want when they want and to build something that can ultimately be managed or sold.
If you have the desire to get ahead and do work you enjoy - and are prepared to take calculated risks - you're a good way down the road to business success already and franchisors will be keen to meet you.
But even with these qualities, there's still one more area you need to explore and that's franchising itself. You need to find out how franchising works, whether you can work within a franchise system and how to get the most out of it. Only then can you decide if a franchise is the best business vehicle for you.
Franchisors provide standard procedures and business systems that are applied uniformly across every outlet in their network to ensure that customers everywhere receive consistent products or services. How do you feel about the franchisor limiting what you can and cannot do in your franchise business? Are you a team player who can follow guidelines and listen to advice - someone prepared to work hard within the boundaries? Can you swim in the same direction as the other franchise owners or will you want to go off on a tangent?
Franchising doesn't suit completely independently-minded or extremely entrepreneurial people. As a franchisee, you exchange total independence for security, training and support, buying power and ‘group grunt'. A franchisor may limit what you can sell, define your opening hours and how you promote your business. Franchisors are therefore looking for people who are prepared to work within the boundaries of a defined system while having the drive and ambition to develop and build their own business. This is not an easy combination to find.
Be prepared - when you start meeting with your proposed franchisor, they will ask you lots of questions. Some questions will be fairly standard, such as your previous work and business experience and asking for referees (both personal and business). You may also be asked some searching questions about any partners who may be involved and your financial position, including your present income, living expenses, savings, assets, equity in property, mortgages, debts, and whether you have ever been bankrupt. How do you plan to finance and operate the business? Will your partner continue to work elsewhere while you build the business, or will you both be involved from the start?
Why do they want so much information? Well, franchisors need to ensure you have the funds and security to purchase the franchise, and working capital to get started. The last thing you need when purchasing any business is to be under-capitalised, so you will not be accepted if you don't have enough capital. Although it may not seem like it at the time, if they decline your application for this reason the franchisor is actually doing you a favour and saving you from making an expensive mistake. It is vital that full, honest and complete details are given to the franchisor so they can determine your chances of success. All reputable franchisors will treat this information in complete confidence.
What research have you done on franchising in general? On the franchise you're considering buying specifically? (you'll find a helpful list of questions to ask here ). What do you see as the benefits of joining a franchise group in comparison to being on your own? What do you expect from the franchisor? What do you see as your main responsibilities as a franchise owner? What do you think is most likely to make your franchise a successful business? What will be your biggest challenge in running the franchise? Will you take guidance from the franchisor? What do you want to achieve with their franchise? What are you going to do to build your business? Can you work with the franchisor and can they work with you?
The franchisor is not responsible for your success, and you need to realise that. It's your role, not the franchisor's, to run your business. The franchisor will guide, advise and support you in operating your franchise, but they won't do it for you. The franchisor will give you the toolbox for the business. You need to open the toolbox, pull out the tools, roll up your sleeves and use them. Don't expect to open your doors, sit back and wait for your till to magically start ringing.
Any business - even a franchise - is a risk. Only you can decide whether you are comfortable with that risk and whether you can operate within a franchise network.
Be sure that you know where you are going, where the franchise is headed, how it is going to get there and that you are capable of taking it to that place in your own business. Look for a franchise you like and a franchisor who can help you get to where you want to go. The path to profit begins with you!
If you're ready, have what it takes and are keen to get started, franchisors will want you as a business partner.
This article was first published in Franchise New Zealand magazine Volume 16 Issue 2
This material is copyright © Franchise NZ Marketing Limited, Franchise New Zealand ™ magazine and Franchise New Zealand On Line . While it may be downloaded for personal use, no part may be reproduced in any form whatsoever without the specific written permission of the publisher.