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Take a moment and assess your tolerance for risk. Opening a new business can be absolutely terrifying. The amount of personal, professional, and financial risk involved is worth considering. When deciding to take such a huge step in your career, it’s only natural to explore ways to manage that risk and increase your chances of success.

Now, let’s take a look at some numbers. The Small Business Administration conducted a survey and found that a staggering 62% of non-franchised businesses failed within 6 years. On the other hand, a separate study by the United States Chamber of Commerce revealed that 97% of franchises were still open after 5 years. These independent third-party organizations’ research clearly illustrates that opting for a franchise significantly reduces the risk compared to starting a business from scratch.

It’s crucial to be self-aware and acknowledge your weaknesses while embarking on this journey of launching a business. Don’t just focus on your strengths; honestly evaluate your weaknesses as well. Before selecting a franchise, take the time to create a list that accurately portrays your strengths and weaknesses as a potential business owner. Use this profile as a valuable tool to aid in your decision-making process.

Reach out to current franchise owners and inquire about the responsibilities they have. Compare these duties to your profile. If the business aligns well with your strengths, then the required skill sets will either be ones you already possess or skills you can swiftly acquire. However, if this is not the case, it’s best to keep searching. If a certain aspect of a franchise has a steep learning curve, but it’s otherwise a great fit, you might want to consider hiring someone experienced in that position. Just remember to include their salary and benefits in your financial business plan.

Many aspiring franchisees make the mistake of believing that they are restricted to buying a franchise within their current field. This may, in fact, be the worst approach. Some franchises prohibit individuals with specific expertise in a particular industry from purchasing a franchise in that industry. For example, a skilled mechanic may not be eligible to buy an auto repair franchise. Skilled technicians often find it challenging to transition from hands-on work to management roles and are tempted to return to the familiar floor. However, to grow the business and excel, an owner needs to be out there networking, marketing, and engaging with customers. If there’s an excess of work in a specific area of an auto repair franchise, even if the owner is a highly skilled mechanic, it’s necessary to hire additional mechanics. Basic business skills are applicable to any franchise. If your current position encompasses universal responsibilities like sales, marketing, or accounting, the possibilities for franchise options are practically boundless.

Now, let’s tackle the myth of recession-proof businesses. The truth is, no business can be completely shielded from the impact of a faltering economy. However, there are certain industries that are considered recession-resistant. These industries generally offer products and services that people cannot do without, regardless of budget cuts. The good news is that there are numerous fantastic franchise opportunities in these recession-resistant industries. Here are a few examples: food, automotive, healthcare, medical, clothing, and education.

When seeking advice regarding your franchise venture, it’s important to objectively evaluate professional advice from personal sources. Friends and family undoubtedly have your best interests at heart, but they may unintentionally discourage you from pursuing a new business due to their concern for your wellbeing. While it’s essential to consult loved ones before making such a significant commitment, remember that they may not be subject matter experts. Industry professionals should be your primary source of advice when making the final decision of whether or not to proceed with purchasing a franchise.

Beware of the “free” franchise brokers and consultants out there claiming to provide unbiased information on franchise opportunities. These services are often compensated by the franchises for selling their franchises. Naturally, this means that they will primarily show you options that benefit them financially. The risk is that they may steer clients towards high-profile franchises that offer them hefty commissions, regardless of whether they are a good match for the client or not. While these broker services can provide valuable information with access to detailed data on hundreds of franchises, it’s prudent to be cautious about their recommendations and seek a second opinion before investing your money.

Let’s not forget the importance of tuning out the hype. Throughout your assessment of potential franchise opportunities, you will encounter plenty of hype, both positive and negative. It’s vital to remember the adage, “if it sounds too good to be true, it probably is.” Success stories and marketing blitzes tend to spread rapidly. For example, consider the iconic weight loss campaign featuring a guy who lost weight eating Subway sandwiches. This story has become ingrained in the public’s perception, making it difficult to separate the allegory from the restaurant. The hype surrounding such marketing campaigns can significantly influence potential franchisees.

Conversely, negative franchise stories also circulate due to human nature’s inclination to find something or someone to blame when things go wrong. However, it’s essential to recognize that these stories often lack the nuanced details that created the situations. They focus solely on attention-grabbing outcomes. While it’s valuable to learn from these stories, bear in mind that they are unique situations with complex backstories, likely having no impact on your success, should you choose the same franchise.

Don’t limit yourself to the big brands when searching for a franchise opportunity. While it’s easy to be drawn to the recognizable names, it’s crucial to remember that there are thousands of franchise opportunities available. Take the time to explore the lesser-known franchise brands in your industry of interest. These brands often offer cutting-edge concepts that can garner significant marketing attention. Additionally, they have yet to saturate the local market and are usually more affordable to start, reducing financial risk. Of course, if you value the security and benefits associated with a well-known franchise, there’s nothing wrong with that. National marketing campaigns, standardized employee training, management support, and strong purchasing power may be criteria at the top of your checklist. However, if you desire to stand out and avoid being just another recognizable box in a strip mall, a lesser-known franchise may be the perfect fit for you.

While price is a factor to consider, it’s crucial not to solely evaluate a franchise based on its cost. A higher price tag does not guarantee greater success. Take the time to thoroughly assess every aspect of a franchise opportunity, including financial projections, monthly franchise fees, franchiser support levels, issue response time, customer base, and marketing strategies. Once you have narrowed your preferences down to a specific industry, conduct due diligence on 2 to 3 franchises within that industry. Gathering sufficient information about comparable franchises will enable you to make an informed decision.

Lastly, even after you have found what seems to be the perfect franchise, continue looking. Keep exploring other opportunities even if you have already decided on a particular franchise. This ensures that you have thoroughly assessed all the options and increases your chances of finding the best fit for you.

Remember, the journey of purchasing a franchise requires careful evaluation, research, and objective assessment. By following these tips, you can navigate the franchising landscape with confidence and increase your chances of success.
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Ihab Salloum