Starting your own franchise is a great option if you want to achieve independence, flexibility, and satisfaction in business. It can provide professionals an opportunity to earn a comfortable income while being their own boss. This appeal has led to the continued growth in the franchise business. A franchise outlook report for 2016 from the International Franchise Association forecasts an increase in franchise establishments and franchise employment in 2016. This growth outpaces the rate for many other types of businesses, perhaps because of the limitless potential for success and franchisee benefits.
Success in franchising requires a lot of dedication and planning. It may not be the best idea just to pick your favorite pizza brand or gym you go to and empty your savings into opening your own location. To find long term success more quickly, it is critical to take the right preparations.
Before applying for a loan and signing a contract, make sure you are ready for the commitment that lies ahead. The checklist below will guide you through some suggested background information you need to acquire before opening a franchisee business. Make sure to think each step through to better set yourself up for the benefits of your investment.
Assess Your Ability to Run a Business
As with any business venture, opening a franchise comes with some risk. Are you qualified to mitigate those risks and do you feel prepared to overcome franchisee challenges? Unfortunately, failure is a possibility when starting your own business, so it’s important to ask yourself the following questions before making your decision to buy into a franchise:
- Have you considered the business and operational training support that a franchise should supply to ready you for maintaining your business?
- Do you have the time to put in the necessary research and dedication required to get the business up and running?
- Could you run the business by yourself if you didn’t have any employees?
- Are you financially prepared to recover in case your business venture doesn’t work out?
- Do your background and education provide skills that can help you with your business management?
Not having experience in business or operations doesn’t mean you won’t succeed as a franchisee. If you partner with a franchisor like The UPS Store, you will be better prepared by receiving extensive, hands-on training before ever opening your doors. This, mixed with advanced independent research of the franchise’s goods and services, will give you a leg up on successful management.
Consider the Potential Costs of Being a Franchisee
Whether you decide to try to get a loan or tap into your personal savings, starting a franchise does require capital to get up and running. In addition to paying for inventory and a rental space or building, costs you may also have to pay include operating licenses, insurance, accounting services, signage, legal aid or marketing expenses.
Before getting too far into the process, take an account of your current financial situation. You can do this by totaling up all of your assets and liabilities and then find the difference. That answer is your net worth, which most franchisors will need to know before awarding you a franchise (there is usually a minimum requirement). When starting out, keep in mind that it may take time to turn a profit, as you will have to pay yourself back for your investment before you can start counting gains. Once you have picked a franchise, create an estimate for what your first year of operating expenses should be (the parent company and other franchisees may be able to provide insight on this) so you can try to stay on top of your spending.
If you are ready to move forward with a franchise opportunity but don’t have the cash on hand, The UPS Store franchise offers special financing options to make sure you start your new business off on the right foot.
Do Adequate Research
This may seem like an obvious step, but it’s also one of the most important ones. When you first start your exploration into franchising, don’t just pick the first option that comes up in your web search. Read reviews, explore requirements and take note of everything provided by the franchisor in exchange for an investment.
Once you’ve narrowed down your search to a few options, dive into more extensive research. Visit different locations and talk to someone on each franchisor’s development team. Find out what franchisee benefits are supplied that make that brand better than another. For example, opening a The UPS Store means access to marketing materials, location-selection assistance, an industry-leading business model, and convenient financing. These things aren’t available with every brand. Do your due diligence to make sure you pick a franchisor that offers the support you need.
Talk to Other Franchisees
This step is simple – talk to current franchisees to get a feel for the relationship and assistance offered by their parent company. Ask them what difficulties they faced when getting started, as well as the amount of work they put in to get off the ground. Find out why they picked their location and what operational and business challenges they have faced. See if they feel adequately supported by their franchisor and the community it created. Lastly, ask if they enjoy what they do and whether the reward was worth the investment.
Choose the Right Franchise
After assessing your individual situation and researching your top options, it all comes down to deciding which is the best franchise for you. No matter how hard you work, the success of the brand as a whole is a major player in whether you will meet your goals. Pick a franchise that offers the support and resources you believe will be most beneficial for you as an owner and manager. Consider not just what the brand offers in terms of training, tools, and financial requirements, but also the competition, demand for the company’s product or service, how long the franchisor has been in business, and name recognition.
The growth potential should also be looked at, which may lead to the opportunity to later own more than one location. The UPS franchise provides this option and gives each of its franchisees the support they need.
Doing proper research and planning before joining a franchise can help minimize risk. Your ability to manage the financial and business commitment in joining a franchise should be your benchmark for moving forward. When you decide you are ready to start exploring franchise opportunities, consider The UPS Store as a top contender for your future. We understand your needs and devote time and effort into making sure our franchisees enjoy the benefits of joining The UPS Store network.