Could Your Business Be a Viable Franchise?
At some point almost everyone dreams of starting his or her own business. In fact, that is the very fundamental concept represented by the “American Dream”. However, very few ever take the leap to make that dream a reality by going into business for themselves. Of those that do take the chance, over half fail in the attempt.
For the very few that actually make the leap from work-a-day employee to thriving business owner, growing and developing their vision is a source of deep pride and contentment. Still, even the strongest business can grow only so much. When an owner hits the pinnacle of success with his or her business, where can they go from there? Many set their sights on franchising and the dream of making their successful business a success for others and a source of even greater financial reward for themselves.
The Reality Behind the Dream
Sadly, success in developing a thriving business does not directly translate into success in franchising that business. That doesn’t mean that the business plan isn’t good. Far from it. The owner’s success with his or her business wasn’t a fluke. It was the product of a solid business plan, backed by drive, dedication and strong business sense.
The reality is that not all businesses are cut out to be successful franchises. The reasons for this are myriad, but most boil down to one or two questions that the owner has to ask: “Could I train just about anyone, anywhere to do what I’ve done with this business?” If the answer is yes, then one needs to then look at the large scale demand for the product or service supplied by the owner’s business. Trying to franchise a business that fulfills a need that is already met by big name companies can be difficult, but not impossible. Trying to franchise a business that supplies a very small niche market with a demand almost entirely met by a few small business is, on the other hand, completely unpractical.
The Business of Franchising
Even if the owner’s business plan is a good one that can likely be franchised successfully with an expectation of appeal to investors (and a reasonable expectation of the success of franchises), there is no guarantee that the owner will have luck franchising the business. When you get down to it, franchising a business is nothing like running the actual business. In fact, franchising the business is a whole new line of business in itself.
Though the owner certainly has enough business sense, as demonstrated by the already successful business, it takes more than just business savvy and determination to successfully franchise. Chances are, the business owner was so successful with his or her business because he or she understood the business and had experience with similar businesses well before the attempt to start an independent business was made. That kind of knowledge and experience is crucial to success.
Therefore, a smart businessman will quickly understand that the same degree of prior knowledge and experience in the field of franchising is necessary to successfully engage in the business of franchising. Most business owners lack that experiential understanding of franchising. Does that mean that they shouldn’t franchise the business? Not at all, but a wise entrepreneur will see where he or she is deficient and employ the services of someone with the knowledge and experience that is vital to success.