Retail Management Is Franchising For You?

As with any business, the first step in determining whether or not to enter into the venture is to assess your reasons for going into business. If you feel you need a change, or you're tired of having other people tell you what to do, then you should reassess your decision before investing your time, money, and energy because operating a business requires more than a need for a change, or the desire to do as you please. Purchasing a franchise, like any other business, requires a total commitment of your time, energy, and financial resources. If you are not prepared to invest these qualities and resources into your franchise, then you should stop at this point.
   

EVALUATING YOUR SKILLS AND EXPERIENCE

Identify Your Reasons

As a first and often overlooked step, ask yourself why you want to purchase a franchise. This question, although basic, is an excellent way of evaluating your reasons for going into business. List every reason you identify, no matter how farfetched. Divide your list into two separate components. Separate the viable reasons from the trivial reasons and categorize them accordingly. It isn't unusual for reasons to range from the desire to be your own boss to the desire to be a billionaire. Whatever your reasons, remember that your future is at stake so try to be as objective as possible. Your checklist should include reasons such as these; check each that apply to you:

 Freedom from the 9-5 daily work routine
 Being your own boss
 Do what you want when you want to do it
 Improving your standard of living
 Bored with your present job
 Have a good or service for which there is a demand

Some reasons are better than other ones, none are wrong; however, be aware of tradeoffs. For example, you can escape the 9-5 daily routine, but you may replace it with a 6 a.m. to 10 p.m. routine.

After assessing your reasons for going into business, next conduct a self-analysis to determine if you possess the personal characteristics needed to be a successful franchise owner. Consider questions such as:
 

Personal Characteristics

 Are you a leader?
 Do you like to make your own decisions?
 Do others turn to you for help in making decisions?
 Are you willing to accept managerial assistance from the franchisor?
 Are you willing to comply with the provisions outlined in the franchise contract?
 Do you enjoy competition?
 Do you have willpower and self discipline?
 Do you plan ahead?
 Do you like people?
 Do you get along well with others?
 

Personal Conditions

These questions cover the physical, emotional, and financial strains you will encounter operating a franchise:

 Are you aware that running your own franchise will require working 12 to 16 hours a day, six days a week, and maybe even on Sundays and holidays?
 Do you have the physical stamina to handle the work load and schedule?
 Do you have the emotional strength to withstand the strain?
 Are you prepared, if necessary, to temporarily lower your standard of living until your franchise is firmly established?
 Is your family willing to go along with the strains they, too, must bear?
 Are your prepared to invest, and possibly lose your savings?

Answering yes to any of these questions means that you have some of the skills needed to operate a successful franchise; a negative answer means that you may have to acquire these skills or hire personnel to supply them.
 

Experience

Certain skills and experience are critical to the success of a business. Since it is unlikely that you possess all the skills and experience needed, you'll need to hire personnel to supply those you lack. There are some basic and special skills you will need for a particular franchise you purchase.

By answering the following questions, you can identify the skills you possess and those you lack (i.e., your strengths and weaknesses):

 Do you know what basic skills you will need to operate a successful franchise?
 Do you possess those skills?
 In hiring people, will you be able to determine if applicants' skills meet the requirements for the positions you are filling?
 Have you ever worked in a managerial or supervisory capacity?
 Have you ever worked in a business similar to the franchise you want to purchase?
 Have you had any business training in school?
 If you discover that you don't have the basic skills needed for your franchise, will you be willing to delay your plans until you've acquired the necessary skills?

REVIEWING YOUR OPTIONS

When you complete your self analysis, discuss your results with your family and financial advisor. Their feedback can help you make the right decision. If you all agree that you have most of the skills needed to operate a successful franchise, then you should feel comfortable preceding with your plans. If, however, they feel you lack most of these skills, then you may need to consider delaying your plans until you are better prepared. Above all, be honest and objective with yourself; after all it is your future.

Once you are certain that your reasons for going into business and the franchise you've selected are viable, gather the information that you will need to make an informed decision from sources, such as: 1) a directory of franchises, e.g., the Franchise Opportunities Handbook (published by the U.S. Department of Commerce), 2) the disclosure document, 3) current franchisees, 4) other references, such as U.S. Small Business Administration (SBA), Federal Trade Commission (FTC), Better Business Bureau, local Chambers of Commerce and 5) professional advisors.

Many new small business owners choose franchising over starting a new business from scratch because it provides easy access to an established product, reduces many of the risks involved in opening a new business, provides access to proven marketing methods, and in some instances provides assistance in obtaining start-up capital from financing sources.

---