Buying a Franchise from another Point of View
You know, it never hurts to analyze a situation from a different point of view.
In many cases, you’ll hear about all kinds of advice telling you what to do, how to do it, and things to remember. But this article contains a few “Don’ts.” Here are some reminders of what you shouldn’t do when buying a franchise.
Don’t underestimate the impact of your potential decision on your family. While you’re probably calculating profit and loss, inventory, and prospects seven ways to Sunday, you shouldn’t underestimate or miscalculate the effect that this business will have on your immediate family if you decide to move forward. This franchise is going to need a big chunk of your time for the seeable future to get it running and keep it going.
Because of this time commitment, you should talk with your spouse and children about what this means. It will help everyone to understand your thinking if you take the time to tell them about your rationale for taking on this opportunity. Also, explain franchising to them and risks that come into play when you go into business. Be ready to listen to their feelings and worries. You’re going to need their support, so make the investment of time to be sure that they can see your vision the way you do.
Don’t be cheap. In for penny, in for a pound, the old adage says. A franchise can cost tens of thousands of dollars, which can be a lot of money. Thinking of that saying another way, something worth doing is worth doing right. That means don’t scrimp on some of the details that can really result in serious consequences.
Work a consultant to create a Franchise Business Plan. This can really help you if you’re planning on applying for a small business loan. Approval is much more certain if you submit a detailed business plan with your loan application. It shows that you’ve done some preparation and are taking this endeavor seriously. A Business Valuation Consultant can help you to make sure that you are addressing all of the necessary and critical issues. This expert can also help you select the proper business entity type for your franchise, and alert you to the California franchise laws. He can also review the franchise materials, such as the franchise contract.
In addition, you should be familiar with numbers or spend the money to hire an Accountant or CPA with a background in setting up small business payrolls and filing small business taxes.
Don’t miss the opportunity to visit company headquarters. If you receive an invitation from the franchisor to tour the company’s headquarters, don’t say no, but do so only when you’re near your decision, so that you don’t waste everybody’s time. If go, you’ll get the chance to personally meet with the people with whom you’re be interacting every month. Ask questions and make contacts in each department. This experience can be invaluable, as you’ll get an understanding of how the franchisor operates and what they will do to support your franchise.
So don’t be afraid to ask for help, to ask questions, and be prepared. Your franchise will be that much farther ahead if you do these don’ts.
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