19 Mar 2020
3 Simple Tips That Will Help You Choose A Franchise To Buy
For instance, when you need to buy a new car or truck, do you only look at one model? Probably not. You want to make sure you’re buying the right vehicle for your needs. It’s nice to have choices, right?
When you’re checking out new televisions, do you only look at one television and one size screen? Of course not. You look at several televisions...and a few different screen sizes. You want to get the biggest, best picture you can afford. Again, it’s great to have choices.
Moving on to buying a franchise, (which is a much larger investment than a new TV or even a new car!). The trick is to find one that’s personally affordable and gives you a reasonably good chance to succeed with as a franchisee.
With those things in mind, here are 3 simple tips you can use to choose a franchise business opportunity.
1. Determine the demand for the products and/or services.
You need to determine the local market demand for the franchisor’s products/services. Something you think will be wildly successful may not be if the demand isn’t there. In addition, you need to find out if the products/services are sustainable, long-term.
With that said, ask yourself this: “Is there a chance that the products or services currently being offered by this franchisor will go out of style?”
In this case, “out of style” means something that has the potential to be a fad. Something that’s “hot” now but may not be in a year or two.
But how do you get this information?
A. Ask your franchise representative for data.
B. Ask franchisees if there’s a high demand for the products/services they’re offering. Then ask them if they have any concerns about the things they’re selling becoming out of favor with consumers anytime soon.
C. Check out Google Trends. It’s a good way to find out how popular whatever you’re searching for is. The numbers that come up are based on how many people are typing in a search term.
Once you’re on the Google Trends website, enter the product/service names into the search bar. Then, play around with the time frames. Are there more searches over time? Or are the numbers going down?
To be sure, when it comes to competitive market research, Google Trends isn’t the end-all tool. But it’s worth a look, since Google is the #1 place people go to get information.
2. Analyze the competition of the franchisor’s products and/or services.
It’s crucial for you to learn all you can about the local business landscape. One way to do this is to get into your car or truck, and drive around your area. How many competitors do you see? Are most of them franchise businesses or independent businesses? How busy are they?
Another thing you can do is visit the local Small Business Development Office (SBDC) near you. They should have a lot of information on things like competition, commercial real estate prices, demographics and other data that can help you assess the local business climate.
Good news! The services provided by your local SBDC are free to you. That’s because SBDC’s are funded in part by the United States Congress through a partnership with the U.S. Small Business Administration.
to find a Small Business Development Center near you.
3. Match yourself to a franchise opportunity that will allow you to put your best foot forward.
In other words, find an opportunity that leverages your top skills. For example, if your background is in operations, look for franchises, that in order to succeed, need franchisees who can run a tight ship. Case in point; a food franchise.
Today’s successful food franchise owners:
• Constantly monitor expenses
• Artfully manage payroll costs
• Track their marketing expenses and ROI
And more. It’s all about operations.
Conversely, make sure you aren’t buying into a franchise system that requires skills you may not have.
For instance, it wouldn’t be wise to look into business-to-business franchise if your sales skills are below average.
The tips I just shared will go a long way in helping you narrow down your franchise choices, so you can choose a franchise that is a good fit.