Starting and operating a business is a challenge, and it takes certain personality traits to succeed. Whether you are entrepreneuring independently or with a franchise behind you, some characteristics – such as being organised, good with people, and even a slight risk taker – are always essential.
However, material supplies are also required, and while the first one of these three is an obvious necessity, the other two might not come to mind straight away. Before you jump into analysing franchises to buy, perhaps your own stocks need to be looked at first.
Financial Resources
You will have to calculate the level of capital investment needed to buy a franchise, as well as other expenses such as loss of employee benefits and living in the initial non-profit phase for at least one year. By making a balance sheet of your liquid cash resources, liabilities and assets, you can see if you have the financial resources required. If the answer is 'no', it is necessary to work out how much you can afford to borrow.
Banks often look favourably on established franchises and are more willing to lend to a proven brand and business model. Some of the larger franchises even have relationships with certain banks and will suggest that you go to them for a business loan. However, it is usually expected that you provide at least one third of the startup funds yourself.
Good Health
Becoming a franchisee means taking a moderate business risk and then dedicating years of your life to making it work. Franchising is extremely popular for people over 50 and for those who have retired from their job as an employee, and it is always necessary to consider if your age and health will allow you to run the business long enough to recover your investment in it.
Some franchises require you to work long hours – including weekends and holidays – especially in the beginning. If you have low energy then it may not be practical to try and keep this up for long. Instead, choose a franchise that allows you to operate part time.
Mental strength is equally as important as physical. Running your own business comes with psychological pressures and you must be able to cope with stressful situations such as strong competition, teamwork, and sudden changes. When mistakes are made you need the resilience to recover quickly and remain optimistic.
Support from Your Family and Lifestyle
Setting up any business takes time and money, and it is essential that you have support from your family. Prepare them for the changes that are going to take place and make sure that the household will be able to handle your higher level of absence, if it occurs.
With 92% of franchise units in the UK reporting profit (NatWest bfa Franchise Survey 2013) and Ireland on similar statistics, franchising is the safest way to start your own business. However, it is still taking a risk, and you need to be living a flexible lifestyle that would be able to stand bankruptcy and failure. When your business is in its early pre-profit stage, it may be preferable for your partner to stay employed in a strong post to ensure that the house has a steady source of income.