The principle of attraction is most frequently...
Stan asks: I know it is true that a business with a history of success, like a franchise, will do better than starting one on my own, but even they fail sometimes. What would you say is most important to do to be successful if I purchase a franchise?
Mariel: Great question! While other industry experts might have their favorite suggestions, most will agree these three can make a strong foundation for success!
1. Make sure to follow the franchise model
Any franchise is successful because it has a successful operational plan already in place. If you are trying to change the system from day one, this business model may not be the best fit. If you have a habit of being excellent at following or crafting rules, franchising may be an excellent choice. Controllers, directors, and many other high-powered executives follow protocols as established by corporate plans and procedures. This translates well to franchising. If the business model isn’t one you want to follow, you may want to look at a different franchise.
2. Network, Network, Network
Regardless of the sector or industry your business is in, your ability to build local brand presence, attract business and connect with other businesses and the community is critical. While destination businesses enjoy more walk in and drive by traffic, they still benefit from a strong networker as owner. Other models, like home-based require substantial outbound efforts. Evaluate your eagerness to perform this essential function and the degree its needed in the franchise you are considering. Here, a miss-match can be crippling or even fatal!
3. Ensure you have back up capital`
Ultimately, you are investing in a business. If you are strapped for cash soon after you open your doors, you’ll make decisions that can be detrimental to your success. Poor financial planning and undercapitalization is the #1 reason for small business failure. So, ask lots of questions and create some realistic pro-forma during due diligence. Know the ramp-up timeframe and assume worst case scenario. Learn about the 401K rollover options, SBA loans and the variety of ways folks finance franchise ventures today.
Starting a new venture will always bring as a sense of hope and potential, and that is because you want to envision the best possible outcome. But, when analyzing potential risk, be thorough and pragmatic. Franchises have a much higher rate of success than starting a business from scratch; and… higher does not mean 100%. To be a success, start with these three foundational ideas and keep asking great questions! Good Luck