Focusing on the “Why” and “How” in Starting Your Own Business
Todd Weiss
President & CEO
Now May Be the Best Time to Start Something New
Seemingly not a day goes by these days without hearing about the negative aspects of our economy. With all of the negative attention on the economy, aspiring entrepreneurs should see one thing - opportunity.
The current market presents an excellent opportunity for motivated entrepreneurs to buy in and be well positioned to start and grow their own businesses. The costs for starting a new venture are at near term lows. Equipment, inventory and labor are all readily available and highly affordable. For those businesses heavily influenced by location, the opportunities to buy or lease commercial real estate space are unparalleled. Whether as an experienced business owner or someone looking to own their own business for the first time, the chance to launch your business now and have it in place and established for the next wave of economic growth is an opportunity savvy entrepreneurs will not want to miss.
The Options – Ground Up or a Franchise?
Those seeking to launch their own enterprise face a seemingly age old question - are you better off starting from scratch or buying into a franchise? While some may debate this issue, the facts, according to statistics compiled by the US Department of Commerce/Industrial Trade Commission, show that your chances for success are significantly higher with a franchise.
When you buy into a strong franchise opportunity, you are becoming part of more than just a good business idea. Chances are the franchisor has already worked through launching this venture in other locations and solved the mistakes commonly made by start ups. Further, they have likely built an infrastructure of equipment, suppliers and services which you can use to get your business off the ground quicker and easier than if you were building everything from the ground up on your own. Also, that franchise affiliation should give you greater purchasing power for inventory, lower marketing and advertising costs, and ongoing support from a franchisor with a vested interest in your success.
One of the major challenges for new businesses traditionally is marketing. A new venture faces an up hill battle creating name recognition and delivering their value message to customers without a significant capital outlay. Franchisees benefit greatly from the existing and group marketing a franchise affiliation has to offer. Potential customers will likely be familiar with the product or service from day one. This gives you a better path to increased sales.
How Do I Find the Right Franchise for Me?
Those comfortable with the concept of franchising typically start with an Internet search for information on specific franchises. Most tend to focus on the ubiquitous food or coffee based concepts like Dunkin Donuts, Subway or McDonalds. While it understandable that many start their research this way, most quickly find it inefficient and unproductive and many would-be entrepreneurs spend several months looking for information with little to no success. They find it difficult to find the right people, ask the right questions and correctly compare the answers they get. Most importantly, we see many budding business owners looking at only a fraction of the opportunities available to them, frequently missing the strongest (and often least publicized opportunities) and focusing on opportunities that are ill-suited to their long term goals.
Before looking for specific opportunities you need to identify your own goals and capabilities. We call this determining the “why” and “how” and it is the most important part of the franchising process. Your reason should be more than “I want to be my own boss”, or “I have always wanted to be an entrepreneur”. Start by asking yourself some questions. How many hours do you want to work each week? Are you comfortable managing people? Do you want to be in an office/retail location or would you prefer to work from home? Are you interested in a product or service? What industries are interesting to you? Do you have the financial resources and working capital to fund the business? Do you have enough financial reserves to cover personal expenses while the business gets started? These are just some of the example questions discussed before seeking information on specific businesses. To avoid the pitfalls encountered by many would-be franchisees, you need to reverse engineer your approach – understanding the business is secondary to understanding yourself and your goals.
The Benefits of a Franchise Consultant
A franchise consultant can help you answer these questions and successfully navigate to the right franchise opportunity and the best business deal. The nice thing about working with the right consultant is their services should not cost you anything.
By addressing a few key questions a franchise consultant can come with a profile of the perfect business for you – one that meets both your near term needs and your long term goals. The franchise consultant tracks the franchise market for opportunities – they are aware of the full spectrum of franchise options in the market and can introduce you to opportunities you might never have seen or considered. The franchise consultant likely knows the contacts at your target franchises and has been through the due diligence and negotiation process with them. The franchise consultant is your expert and your advocate in the process.
This is where the industry has shifted in recent years. The franchise industry traditionally used brokers who were paid a commission as an add-on. In the last five years the industry switched to consultant based model where consultants are compensated directly by the franchise as a portion of the franchise fee. This is similar to executive recruiting services large corporations use to fill job listings. What this means for you as potential franchisee, is you can leverage the resources of a consultant without paying their services. The benefits in working with a qualified franchise consultant can help you:
- Determine if franchising is a viable option for you
- Help you establish a suitable investment range
- Find opportunities not widely advertised in the marketplace
- Help guide you through the due diligence process
- Help you avoid costly mistakes
Conclusion
Franchising continues to be a major growth sector in our economy. Our current environment presents a unique opportunity for aspiring entrepreneurs to buy in when the costs are near recent lows. The advantages to franchising include reduced business risk, a proven system, brand name recognition, lower marketing and advertising costs, increased purchasing power and ongoing support. These are the main factors contributing to a higher rate of success of the franchise model versus starting a business from scratch. If you can determine the “why” and the “how” it may be a good option to help you achieve the income and ideal lifestyle for you and your family. The industry has evolved in recent years where qualified consultants are available to help you achieve business ownership. These services are available at no cost you. If you think you are ready, why wouldn’t you take advantage of this opportunity?
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Todd Weiss is the President & CEO of Sunshine Consulting Ltd. Sunshine Consulting Ltd provides Franchise Recruiting Services for individuals and investors looking to become business owners. We have relationships with hundreds of top shelf companies representing a cross section of various industries throughout the United States and Canada. Whether you are a first time owner looking for a business or an experienced investor looking to develop a master territory we can help you achieve your objectives. Our services are provided at no cost to you. If you are interested in finding out more information please call 866-934-7167 or email todd@sunshineconsultingltd.com.
www.sunshineconsultingltd.com
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