EDITOR NOTE: This is a post from The Franchise King®, Joel Libava. Joel will be writing a blog post monthly for Franchise Direct.
In my experience as a franchise advisor, I've found that the number #1 cause of sleepless nights for people buying a franchise-or about to buy a franchise is this:
The fear of making a mistake.
It's fairly common for franchise buyers...especially ones that have made the choice to figure things out all by themselves without using professionals from the franchise industry, legal professionals, and small business accountants, to feel some fear. That’s because people who attempt to tackle buying a franchise alone tend to make a lot of mistakes.
Having Fear Is Completely Normal
Seriously: It's completely normal for people that are about to embark on something big, like buying a franchise for example, to have some fear. I’d be worried if fear never entered the picture.
Most of the people I’ve worked with over the years fear they’ll lose their money because they made a mistake… or several of them. And, it’s that type of fear that keeps people awake at night. But, there are ways to alleviate that fear-at least a little. Here they are:
Choose Wisely
You need to choose a franchise opportunity that’s right for you. In other words, finding franchises that will allow you to use the skills you’re best at.
If you’re great at selling, look for opportunities where selling is the main role of the franchise owner. If you’re good at managing people, look around for franchises that will allow you to do that.
Do Great Research
Once you find a franchise or two you’re interested in, create a list of questions to ask your franchise representative. Here are a few you can use:
- What makes your opportunity great?
- How many new franchise owners did you bring on board last year?
- How do you support your franchisees?
You also need to come up with a list of questions to ask current franchise owner, too. Here are a few good ones to get you started:
- Why did you end up buying the franchise you now own?
- What other franchises did you investigate?
- What is your favorite part of the business?
- What is your least favorite part of the business?
- How many hours are you putting in a week?
Here are 5 more questions to ask the franchisor.
Have Enough Money
In addition to working capital, which is the money needed to keep your new franchise business up and running each and every month, you’re going to need to have living capital.
Think about it: Unless you’ve found a way to keep your job while starting your new venture, you’re not going to be drawing a steady paycheck for a while. You’re still going to have to pay your mortgage, and your other household and personal expenses. In a perfect world, you should have 9-12 months of living capital set aside.
You’ll Sleep Better
If you do as I suggest, and you really believe in the franchise business opportunity you’re about to invest in, including your potential for success, you’ll still feel some fear-I promise.
But, you’ll be able to sleep better at night knowing you did a lot more than most of today’s franchise buyers do.
The Franchise King®, Joel Libava, is a franchise ownership advisor and the author of several books on franchising including these eBooks.