Decision Maker Franchise Business

Thinking of starting a franchise? Here’s why you should.

So you want to start your own business, you’ve thought long and hard about it, and you’ve come to the realisation that rather than start completely from scratch with logos and branding you just want to get going. This is the beauty of franchising – the foundations of a business are already in place and you get to start right off the bat and hopefully, turning a profit.

You already know what franchising is – a franchise offers you all the benefits of owning your own business but with the backing of an already established company along with branding, process, and a tonne of support.

Buying a franchise, however, doesn’t mean this is a quick win or an easy way to make money – there is still a lot of hard work involved, along with a financial investment. As a franchise owner, it will be your responsibility for all financial decisions and budgets.

This investment is dependent on a few key factors:

  • The initial franchise investment, which can range from less than £500 into the millions
  • The franchisor fee, which allows you access to training and support and is often calculated as a fixed percentage of your franchise’s gross revenue.
  • Any initial set-up costs such as tools, equipment, or supplies – if you’re buying into a retail or location-based franchise, the costs are naturally going to be higher than if you’re looking at a home based franchise business
  • Legal advice – an absolute must, which will ensure you’ve got everything covered
  • It’s also worth noting that you’ll need some liquid capital to tide you over whilst you get started and ensure your franchise keeps trading.

What makes franchising so appealing to the 44,000 franchise owners in the UK?

Franchises, whatever their industry, are not only recession-proof but in 2018, UK franchise contribute a whopping £17bn into the UK economy, with an estimated 710,000 UK employees.

Franchises. Built to last.

Starting your own business often means starting from scratch and can be a costly journey where mistakes are made, financial losses are inevitable, and getting recognised needs a whole marketing strategy that means you spend more time trying to gain new customers than you actually spend on doing what you love.

Owning a franchise means you are investing in a recognised brand with less uncertainty within the market, a likely established customer base, and more importantly, you are mitigating your risk, investing your time and money into a turning a profit.

Franchise ownership offers training and support.

When considering which industry or franchise type you’d like to invest in, it’s worth remembering that even if you don’t have the business experience within that field, you can still consider all options. Franchises offer training, support, guidance, and business advice and processes.

It’s important to remember that it’s in the franchisors’ best interest to offer comprehensive training and coaching at the start, so whether you’re looking at opening a pet franchise or a cleaning franchise, or even a fitness franchise, there’ll be ongoing training and support available.

Funding for your franchise may be more straightforward to secure.

Finance and ensuring you have enough capital to invest in your chosen franchise is always going to be key in any business decision you make. However, funding a franchise is easier than getting an initial start-up loan or investor for a typical new startup.

When completing a business plan, your franchisor will have the experience, accurate financial projections as they’re an established business, knowledge and, all of this combined makes applying for credit much easier.

A report by the BFA franchise association stated that 97 percent of franchisee-owned businesses generated a profit in 2016, which is extremely reassuring to know when considering a franchise investment for yourself.

It’s worth noting that some lenders are specialists in franchise credit and loans, so be sure to do your research to get the best advice and preferential rates.

So what type of franchise are you looking at?

Whether you’re looking to expand your passions, put any business experience and knowledge on the table, or broaden your horizons to a whole new level, it’s worth remembering that you’ll be committing hours, weeks, months, years of your life to this business and ensuring you’re successful and profitable – so make your selection wisely.

You’ll need to ensure that you choose the right franchise that allows you to be successful with the business as well on the business – so not just the actual day-to-day activities of your chosen franchise, but the actual running of your business.

If you are a pet lover and are thinking about opening a pet grooming franchise, you need to consider whether you can spend time both working within the business as well as on the business as a whole.

Franchise agreements have a stipulated length of contract – spend time researching the industry and be sure to determine whether you’re the right fit for the business and culture before investing. Are the franchisors’ values aligned with yours? Will you be happy to wake up and go to sleep thinking all things franchise? Are you going to stay motivated and passionate about this business for five years or more?

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