Franchising has significant advantages for entrepreneurs seeking to expand their business.
For instance, creating a brand to lead, is no longer necessary. Primarily, this type of relationship is consolidated in the market. It already has firm roots and a direction to move ahead.
A simple fact, that an entrepreneur does not have to worry, either with the standardization of the stores or, the products offered. Normally, a fee has to be paid to use the name of a company.
Typically, a sizeable fee is paid to the company for the use of its name.
#1. ANALYZE YOUR CAPACITY TO INVEST
After careful evaluation of expenses, fixate on an amount that you can dedicate towards the expansion of your business. It is important to remember, that going beyond your personal savings is never a good idea. Putting all the stake for the success of one lessens the probability and increases the risk factor.
In a case of setbacks, you would need to have a contingency plan beforehand and keep the money ready for such worst-case scenarios.
Not all businesses can reach their break-even point immediately, that is, the profits to cover mitigating expenses.
Do your research and study well before you opt for bank financing options, which can get very costly in the future!
#2. PERFORM A CRITICAL SELF-ANALYSIS
The first step is to do a self-analysis. Take in those factors that are useful, or speaking out your profile, such as experience in business operations or management.
If you consider not good with customer service or client acquisition or client retention, then consider recruiting someone with expertise in those areas.
Also, it is important to check if the place where you plan to open a branch allows you to work on holidays and weekends.
In some locations like shopping malls, weekends may have shorter business hours. You need to ensure that you have higher billing for the days that you operate, not only to make ends meet but to make some real profits.
Brace yourselves to obey the rules, standards and even ethics imposed by a third party, ask yourself whether you are ready for that?
#3. CHOOSE THE MOST APT BUSINESS FOR YOUR PROFILE
One of the biggest mistakes made by entrepreneurs is that they choose a niche that is “popular” in some circles. Doing so, only hurts your creativity and passion as a businessman in the longer run.
Contrary to the traditional mindset, you can never “grow” into anything unless you like what you do! So, be pretty sure that you start a business that represents your idea, mindset, and love for the work. At the end of the day, if you like what you do, your customers will love it too!
#4. ALWAYS THINK AHEAD OF COMPETITION
Stay informed about a competition around your commercial spot. When possible, review their strengths and weaknesses, and compare them to yours. It’s not always a negative thing to have a competitor around.
It can also be a great source of traffic generation benefitting your store. If your business has good attractions, you can benefit from the flow of people the competitors would bring.
Your audience would realize its differential and, would be curious to find out more about your business.
It depends on you to keep your workplace clean, well-kept and bright. Also, the collaborators you hire must know some basic etiquettes, such as friendly & attentive, use keywords like Welcome, Can I help you?, May I suggest?, Thank You for coming, among several others.
#5. LOOK FOR THE PERFECT COMMERCIAL SPACE (point of sale/business)
This is one of the most important factors for the success of your business.
The commercial spot may have more or less influence, depending on the activity chosen. For example, for the food industry, it is everything.
Carefully review the contractual clauses. It is recommended to hire a Lawyer with expertise in commercial leasing.
Remember to negotiate profusely. If you impulsively accept a rental value incompatible with your business billing, you will live with it for the duration of your lease.
Your franchisor should know the maximum percentage that your rent can reach based on the expected billing. You can design billing that meets your trading and maximum rental expenses. Beyond this value, you reduce profit.
The real estate sector is always in expansion due to entrepreneurs searching for commercial spaces to branch out their businesses.
Emphasize on the profile of each place and think it over from different aspects. Bear in mind, that it won’t help much if you choose a venue just because of profitability. Your happiness and honesty should be a priority when choosing a location that could last for a very long if you play your cards right.