Most people imagine that starting a franchise is an easier way of starting their own business. Franchising has been on the rise here lately, but this is not to say that starting out one means that will automatically be a roaring success. Anyone who wants to purchase a franchise must do his or her homework well. With the right information, you can have a better chance of making their venture a success.
Prior to starting a franchise business, the franchise owner should do in-depth research of the current state of the franchise landscape in Singapore. To help with that here are a few things to consider:
- Total cost outlay. It is importance that anyone going into this business considers what it will cost for the franchise to be set up and to open its doors. You must consider the purchasing cost, cost of opening inventory, working capital needed before the franchise breaks even and so much more. Knowing what the costs look like is very important if one is to make a success of such a venture. You do not want to find that money has run out, just when the business is on the brink of success. As a franchise owner, it is also important to consider how you will finance the business, should you run out of working capital early. However, if one requires extra business funds, they can look at the best personal loan interest rates here.
- A track record. This is something that anyone looking into purchasing a franchise must look into. The company must have a track record, preferably from several different outlets across the country. If the company is in its beginning stages, even if it looks like a good idea, it may not have enough data to back it up. Additionally, you should consider the area in which a concept does well and understand that this may not work similarly in a different area. Specialty stores are especially touchy where location is concerned.
- Where do your passions lie? Anyone interested in a business of any kind must consider their passions. A franchisee must be willing to work within the laid-out rules and system of the company. You don’t necessarily have to be passionate about the products, or even do the work personally, but it should be someone passionate about doing business and doing it well. The franchisee must commit to running the business as guided and should have the personality for that. Nonconformists who prefer to make their own rules and shake things up as they go, may not be well suited.
- Is the management capable? Each franchise company has a management team at the helm. It is important that such a team be made up of capable men and women. A franchisee should insist on reviewing the resumes of all key managers. It is important that they are men and women with lots of business experience since during hard times, these are the people who will help him or her find solutions that will keep the business above water.
- Time investment. Every business requires lots of time investment in the beginning. Every franchisee should know this and be willing to spend the required amount of time at the business every day. This is a question that you should ask yourself ahead of time to ensure that there is a clear understanding of what the expectations are. If the franchise tends to be seasonal, then you can expect that there will be times of the year where things will be very busy. All in all, you must understand just how much of a time investment will be required if the business is to succeed.
- How much help is offered by the company? One of the key benefits of starting a franchise is that the franchisee knows that he or she will be getting help from the company. That said, he or she must find out ahead of time, what kind of help they are to expect from the company, and more so in troubled times. The truth is that every business goes through a rough patch. Knowing that help is available, makes it much easier especially if you are working out your first business venture.
- Have an exit plan. For someone who is going to start a new business, the idea of an exit plan may seem morbid. However, it is always important to start a business having the end in one’s mind. This means that you will have to think about how long you want to run the business. Is it for a few years and then move on to other things, or is it a business that you plan to leave to your kids? Having this information ahead of time will help you select the right opportunity to engage in. It should be able to fit into your timeline as well as short- and long- term goals.