The opinions expressed by the associates of the entrepreneur are their very own.
Up to date on December 19, 2023. Initially printed on June 15, 2016.
As a franchise coach, my job is to assist folks discover the proper franchise that matches their wants and to assist them efficiently navigate all the course of of shopping for and proudly owning a franchise. Over time, I’ve seen all of it – fantastic successes in addition to horrible errors. As a coach, it is my job to offer folks high quality recommendation based mostly on my expertise and their expertise, however I am unable to power them to comply with it. Under are among the commonest errors I see as a franchise coach and how one can keep away from them when exploring franchise alternatives.
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1. Selecting the fallacious franchise for you
The franchise you select should actually swimsuit you so as to succeed as a franchisee. Your expertise, way of life and site preferences, monetary state of affairs and persona are all issues to contemplate earlier than buying a franchise. For instance, if you may be depressing in a chilly climate location, do not buy a franchise within the north. Or if the enterprise mannequin requires you to work nights and weekends, however you need to spend extra time with your loved ones, that is most likely unhealthy. Figuring out your self is not at all times that easy, however the higher your franchise suits, the extra snug — and profitable — you may be working what you are promoting.
2. Unwillingness to pay due consideration
Some folks do not love to do their due diligence. They belief their instincts to make selections for them. Though trusting your instinct could sound romantic to some, it isn’t a attribute of profitable enterprise house owners. The important thing to being a profitable enterprise proprietor lies in making knowledgeable selections backed by analysis and laborious work, somewhat than blindly following a “intestine feeling”. If you wish to see success, it’s essential to do your due diligence.
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3. Falling in love
Some folks are likely to fall in love with an thought or idea – then do due diligence that solely helps their preconceived notions. They’re blinded by their bias and their analysis finally ends up being one-sided as an alternative of thorough and full. I as soon as labored with a person who was in love with the idea of photo voltaic and LEDs. He did not care if the enterprise mannequin made sense. Regardless, they may enter this space of enterprise. So he simply needed to see the details that might help his want to enter this trade with out ever researching the potential pitfalls. Once more, this isn’t a attribute of profitable enterprise house owners.
4. You do not construct a strong P&L
It’s vitally necessary to know the P&L – revenue and loss – of any enterprise you’re contemplating shopping for. You can’t shorten this course of. Do your analysis, speak to present and former franchisees and perceive the precise revenue and expense classes before you purchase what you are promoting. It’s worthwhile to know the financials earlier than you go into enterprise, in addition to the price that might be required to interrupt even and generate optimistic money movement. In truth, this matter is so necessary that we now have devoted all the twelfth chapter to it An informed franchisee. As soon as this and your personal monetary assets, you reduce the danger of monetary difficulties.
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5. Having unrealistic expectations
Some folks assume that the franchisor will do all the pieces for them—that franchising is a few sort of silver bullet the place you possibly can work much less and earn extra risk-free. In actuality, the primary yr in any enterprise is hard, franchise or not. Once you purchase a franchise, it’s nearly assured that you’ll work extra and earn much less throughout that first yr. The franchisor will do all the pieces they’ll that will help you, however in the long run it is all about you. You might be accountable for constructing what you are promoting to turn out to be worthwhile. You might be chargeable for your personal success.
All profitable enterprise house owners be taught from their errors, however the very best at all times do their due diligence and keep away from many probably catastrophic errors. What species will you be?