A while back you started your business and it has been doing great. You have survived recessions, pandemics and maybe even natural disasters. Things are humming along quite well. Perhaps you have a team running your business and you find yourself not as involved in day-to-day operations. You have morphed into the role of a leader and begun to set your sights on the future. You have always been an accelerated entrepreneur so you are now thinking about the next step, growing into a chain business. Naturally you are wanting the easiest, cost effective and most efficient path to get there and so franchising your business comes to mind. Then you ask yourself, “does my business measure up for franchising”? You might even be asking yourself why franchise or when is the best time to franchise (take a look at “When, How and Why to Franchise Your Business“). Your head is spinning and you want answers. So let’s get right to it.
Dissecting Your Business
Time to dissect your business and look at it another viewpoint. Take a honest look at what your business is offering and ask yourself what is unique about it, different and will your business work in other markets. If operating a service business, what unique twist have you added (sometimes the best businesses are one that have taken a common or everyday service and have figured out another way to accomplish the task better, quicker and in volume). Identify who are your competitors and what are the things that separate you apart from them (and don’t say customer service, that’s a gimme). Identify what are your core services (bread and butter services) and what services have you added over the years.
Is Your Business Duplicatable
Take a look at how hard will it be duplicate your business in another state. Imagine that you decided to permanently move across the country. Yep, lets say you are in Florida want to get the hell out of dodge before the next hurricane and decide to move to Colorado. Time to start over and knowing what you know now, seriously ask yourself how hard will that be to do. Maybe you lucked out when you first started your business and you did not have do much to attract interest and business just came to you. Maybe through the relationships you have fostered or your years of involvement in the community it generated enough buzz that you were busy right from the start. While that is all good and lucky for you, that does not do you much good when are now in another state across the country with no relationships and no one has even heard of you or what you do. What now? Ask yourself how would you kick start your business and let people know you exist. This is exactly the position a franchisee will be in who is trying to leverage the goodwill you have created in another area, but the problem is your business is unknown in the new area. If you do not have plan, you had better come up with one.
Variations to Your Business Model
Think about when you first started. Did you start your business from home and then as you grew move into an office space or storefront. It is not unusual for business to start from home (take a look at franchising a home-based business) then transition to leased location. Ask yourself if your business provides that type of flexibility or do you need a location right off the bat. And if needing a space, how difficult is the build-out. Can you jump into a space, slap some paint on the walls and be good to go or will it take more than that to open for business? If so then good idea to think about costs and if you had to do all over again (example of moving to Colorado) is there anything you would do different.
Streams of Revenue and Profitability
Identify all the ways you make money, what are your streams of revenue. When you first started how long did it take for you to break even? Dig into your records and memory banks to see when your business was able to sustain itself, when it was profitable. While there are no rules that indicate how much profit you should have before franchising (take a look at “How Much Do I Need to Make Before Franchising“) it is good to have a benchmark. You are unable to talk about profitability when it comes to franchising, it is considered inducement. Someone buying your franchise is buying into a business model that works (has a proven concept) and the expectation is if they follow in your footsteps they too will be successful. How successful they will be is up to them.
Thinking About Franchising
There are so many other things to take into account to determine if your business measure up to franchising. But before wrapping up this piece, let’s address one more. What does a you look like? In other words, who is a good franchisee. Think about your background, experience, skill set, etc. and do you want that same type person as a franchisees. What characteristics does a person need to have to start and operate your business in another market? If you have not thought about it before, good idea to start now. Once you have profiled your ideal franchisee, it is not rocket science when it comes to finding the perfect franchisee. However, franchise marketing and sales people (franchise brokers) will make you think otherwise.
Want to learn more? Give us a call at 1-877-615-5177. We have tons of questions for you, all of which help us determine if you and your business actually do measure up to franchising. We will also explain the steps to franchising and what you need to have in place before you talk with anyone about franchising, collect any money or sign any contracts. We will spend the time to talk with you and give you straight-forward, honest answers. Read more about us, there is a reason why we have been award the BBB Torch Award for honesty, ethics and integrity in the marketplace.
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- How Do I Make Money Franchising?
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- Learn About Franchising Your Restaurant
- Can I Franchise a Business That Requires a License?
- Franchise Development Services Lets Clear the Smoke
- Does It Make Sense to Start Franchising Your Business?
- What Our Clients Have To Say About Their Experiences
