The Franchise CO.
Real Growth Real Value
Client Area
Search
Article of the month
DO YOU HAVE WHAT IT TAKES TO BE A FRANCHISEE?
Joseph Lamble
Not everyone is cut out to be an entrepreneur. And not everyone will make a good franchisee.
Being a franchisee is not the same as being entrepreneur. This chapter will help you understand the differences so you can evaluate the suitability of franchise life before you commit to purchasing a franchise business.
Let’s start by looking at what it takes to succeed in business regardless of the type of business you choose to start to purchase.
Do You Have What It Takes to Be in Business for Yourself?
Some characteristics are prerequisites for launching a business, whether you opt for a franchise or decide to operate independently. Owning and operating your own business takes motivation, maturity, money, knowledge and experience, strong family support, tenacity, and even temper. Let’s look at these qualities one at a time.
Motivation
Motivation is the “fire in the belly” that feeds the will to forge ahead no matter what. It’s commonly found in people who have worked hard on the job but never quite felt fulfilled- the folks who find themselves saying-“If I owned the place I’d…” That desire motivates people to start their businesses and stick to them through good times and bad.
Maturity
Motivation gets you going; maturity helps you persist as you work long hours without complaining, get along with your personnel, handle money responsibly, and handle crises with patience and good judgment. All these challenges take maturity- the wisdom to accept the hard work and occasional setbacks it takes to make your dream reality. As a business owner you must be a dreamer and a realist. You need to set goals and plans to achieve your dreams while being realistic and planning the attainable. You need to accept your limitations as short-term handicaps and hunt for ways to grow beyond them. That’s maturity.
Money
Starting a business takes money. You must be willing to look honestly at your money situation and determine how much you can put into your business. With your family you must determine what portion of your net worth (the value of all you own minus what you owe) you are comfortable in investing and which of your assets you will convert to cash to meet the liquidity (what you can convert to cash in 30 days) requirements that your bank or franchisor may impose. You also need to determine whether the business you are considering can provide enough income-especially if you are accustomed to a high income.
Knowledge and Experience
To gain the confidence and loyalty of staff and customers, you must provide a quality product or service in a first-class manner at a competitive price. That means knowing your business and your industry inside and out. But that doesn’t mean you have to open a business in a field you know (and possibly dislike) just because you think that is all you know.
You might very well elect to open a business in a hobby or field of interest in which you have experience. Hiring tradesmen or experts is another way to get the required know-how. You can’t be expected to be an expert in every job, so you must bring in people who have the necessary expertise.
For franchisees, franchisor training is a source of knowledge. Because franchisors know that how well the new owner applies their system depends on how well the new owner is trained, they invest significant time and money in training programs that teach expertise in their industry and, more particularly, expertise in the way they operate. Be wise: take a personal skill inventory. Evaluate your level of competence in such fields as finance, marketing, accounting, human resources, operations, and advertising. Know your limits, and when you reach them, find a way to expand your knowledge.
An Even Temper
A business owner or franchise needs to be able to make decisions logically and with good judgment. That means handling pressure, conflicts, and crises calmly and thoughtfully. If you are impulsive, you may make poor decisions. If you are hotheaded or have a quick temper, you may alienate customers and employees alike, putting your business at risk.
Tenacity
“Stick-to-it-iveness” is a must for any business owner or franchisee. When a job needs to be done, an employee needs feedback, or a customer needs special attention, you will need to see that it gets done. When faced with setbacks, you must draw on your experience and maturity to make the best possible business decisions. It takes tenacity and determination to weather the bumps on the road to success!
Family Support
Strong family support is invaluable to a franchisee-particularly when family money helps finance the business. You need to build support for your idea among your family members, whether or not they will be your working partners.
Your family needs to understand that your business will come first for the next several years- that your hours will be long and irregular, that you may miss meals and social events, and that, in general, you will have less time for family members. Your family also needs to know your income will not be steady. You won’t be paid until all other expenses have been met. Some months that may be very little indeed. And even during good months, you may use your income to build cash reserves. A business is not a bank account that can be accessed at will. Make sure everyone is willing to live with the conditions of self-employment before you embark on your venture.
Do You Have What It Takes to Be a Franchised Business Owner?
Joining a franchise system can be greatly beneficial. For starters, you get a tremendous amount of help from experts in the business: trainers, site specialists, money people, and operations people. You can also call upon other trained franchisees, who have a good deal of wisdom to offer.
You also get a blueprint for success-a blueprint that is the result of years of making mistakes, correcting them, and making sure they’re not made again. You spent your money for a system that works in other areas, and the franchisor must assist you in delivering the successful system to your location.
Finally, you can develop solid business friendships with other franchise owners by working on regional committees or talking at franchisee meetings. These friendships can last a lifetime because in all likelihood you will run into these same people (and their families) for years to come.
But not everyone is cut out to be a franchisee. Being a happy owner in a franchise system requires a personality that enjoys working as part of a team. If you don’t like teamwork, a franchise may not be for you. Succeeding in a franchise system also requires adhering to an operations manual and certain established procedures. If you are the type who resents following a set program and would rather create your own, you may not be as happy as those who enjoy the rewards gained from going by the book. If your favorite phrase is “If I ran this business, I’d…,” you may want to give franchising a pass.
Even developing business friendships is hard for some people-yet franchisees need to develop and nurture cordial and respectful relationships with other franchisees and the area managers who help franchisees carry out he program’s brass tacks. Those relationships are motivated by the mutual desire to operate a system as profitably as possible.
Let’s take a closer look at some of the qualities required of the successful franchisee.
The Ability to Live with the Franchisor’s Game Plan
People often say that in franchising you are “in business” for yourself but not by yourself. “True enough-but this benefit is double-edged. As a franchisee, you are not alone. There are professionals to consult with and plenty of resources to fall back on when difficulties arise. On the other hand, because you are purchasing a system that is already in place, you have a very limited ability to change it. That may rub entrepreneur the wrong way.
True entrepreneurs love to innovate, to find new niches and new ways to do things. People who question things, want to change the product line or a product color, or do things their own way may not be happy in a franchise system.
A happy franchisee wants to follow the game plan that is in place and doesn’t mind taking directions. When he or she sees room for improvement, the franchisee speaks up but isn’t disappointed when the suggestions are no implemented.
In short, a franchisee needs to be able to accept things as they are. If you’re a person who spends lots of energy on things as they should be, you may not be cut out for franchising.
The Ability to Tolerate Differing Points of view and Accept Consensus
Franchise systems are rife with opposing viewpoints. As a franchisee, you’ll have a chance to express your opinion- but so will everyone else. It takes patience and tolerance to hear all sides and to live with a consensus decision that, while maybe the best for the franchise as a whole, isn’t the one you would make on your own.
The Ability to Be Corrected and Take It Gracefully
It is in the franchisor’s main interest to make sure everybody is following the game plan and staying in line. If the franchisor thinks you need to implement the system more diligently, or believes you are ignoring certain practices or even taking your franchise in another direction, you’ll hear about it.
If you have a hard time accepting suggestions or criticism, franchising may not be for you.
A High Level of Trust in the Franchisor
To succeed in franchising, you need to believe in and support your franchisor’s system and policies. After all, franchisors make money from royalties, so it’s in their interest to help franchisees build the largest possible business. Your franchisor will search constantly for ways to help you achieve that potential, often developing new approaches or policies for you to implement. As a good franchisee, you’ll accept policy changes in the spirit they are intended-even when your reaction to the new policy is-“Who thought that up?” or “How can I possibly…?”
The Ability to Communicate
Franchisees communicate often and openly with the specialists at the home office. The more franchisees share their experiences, the better the franchisor headquarters can offer ideas and assistance. You will need to work closely with field consultants who can share their broad knowledge of how other outlets are operated and provide solid information from trusted and valued associates.
The Maturity to live with Your Franchise Agreement and Abide by Your Operations Manual
All franchisees in a system follow their franchise agreement and operations manual as they conduct their business. Living by the same rules means you and your colleagues are building the system using the same blueprint. But now and then, some franchisees feel a little stifled by always “going by the book”- especially when it appears to prevent a franchisee from implementing a great new idea.
It takes maturity to follow the rules and maturity to try to change the system from within. But the system grows by adopting good ideas and discarding bad ones. It may take time, but a great new idea just may eventually be adopted if it benefits the entire system, not just a single store or area.
Attributes of the Entrepreneur versus Attributes of the franchisee
· An entrepreneur is very courageous, a franchisee more cautious.
· An entrepreneur is highly independent, a franchisee more open to guidance.
· An entrepreneur is a visionary, a franchisee more methodical
· An entrepreneur accepts higher risks than a franchisee.
· An entrepreneur is normally somewhat of a loner, a franchisee more readily interacts with the franchisor and fellow franchisees
Are You an Entrepreneur or a Franchisee?
Before you elect to purchase a franchise, take a long, hard look in the mirror and answer the question posed above: Are you an entrepreneur or a franchisee? If you’re an entrepreneur trying to shoehorn yourself into a franchise, you may be in for an unhappy, unprofitable journey. But if your personal characteristics appear to match those of a successful franchisee, then by all means forge ahead in your search for profitable, compatible franchise.
When you have chosen an operation that seems ideal, take another look in the mirror and ask yourself why you’re taking such a big step. Before you sign anything, be sure you understand:
· Why you chose the business you are purchasing;
· Why you are confident it is the best choice for you;
· That you did not choose it just to satisfy your ego;
· That you did not choose it because it was glamorous;
· That someone else did not talk you into it; and
· That you really are prepared for the bad days and the hard work that come with every new venture.
When you know you chose your business for the right reasons and in the right way, you are ready to set out on what could be the most rewarding venture of your life!
Site Map
Contact Us
The Franchise Co - Bulgaria - Industrial Area - North, Kazichane, Sofia 1532, tel. 02/ 9999 521, fax 02/ 9999 519, e-mail info@franchise.bg