đź•’ Estimated Reading Time: ~4 minutes
Starting your first franchise is a big endeavor. While there is hope and excitement around all that is possible through franchise ownership, there is also a swirl of questions that need to be answered. You may feel overwhelmed now, but that feeling is normal and will pass. To help you calm some of the nerves and help you gain clarity around which franchise to start as your first franchise, here are five tips to get you started and moving in the right decision-making direction for you.
1. Ask the Right Questions of the Franchisor
As you’re deciding which franchise to start first, it’s a good idea to reach out and talk to other franchise owners both in your area and in the company you’re looking to enter into.
Talking to franchisees in your area will let you understand more about the community where you’ll be working. You’ll be able to understand local regulations that could impact which type of business you begin.
Talking to franchisees of the same franchise you’re considering will help you to understand the nuances of running the franchise day in and day out. Those details will help you narrow down which franchise investment is right for you, and help you avoid any surprises after you enter into the franchise agreement.
2. Get to Know Your Personal Leadership Strengths
Running a franchise requires leadership. Depending on the franchise you start, you may be leading a team or leading your customers to success. In either case, you’ll need to understand your leadership style and capabilities to know which type of franchise to invest in.
Remember that you do not need to be a perfect leader to start a franchise. Franchisors invest in their franchisees to help them develop themselves personally and professionally. Knowing your strengths and weaknesses before entering the franchise agreement allows you to understand better what you’ll need regarding training or support as you start.
3. Look at Your Capital and Capital Needs
Franchise ownership allows you the opportunity to earn money quickly. However, you must make a few critical investment decisions before the sales and new customers can start rolling in.
First, you must consider how much you can invest in the franchise. Rather than selecting an arbitrary number, decide on the maximum amount of capital you’ll put in from your own money. That way, you’ll have parameters in place to help you keep your money and guide spending decisions.
Next, consider how much capital you’ll need to get the franchises you want. The franchise fee is one monetary investment. You’ll also need to consider equipment, rent or building needs, or other supplies.
Knowing the capital requirements will help you better gauge how quickly you’ll be profitable so that you can plan your finances accordingly.
4. Form Strong Relationships With the Community
The people within your community are the ones you’ll work with day in and day out. They’ll either be your customers, entering your restaurant or store or calling you for your services. Or, they’ll be your business partners and referral network, helping you get set up and gain traction in your area.
Before you invest in a franchise, form these strong relationships with others in your community. Hear if there’s a need or desire for this business model. Listen to what type of help and resources you have available. Know what’s in your backyard, so you can better understand who to call and how to reach the people you want to serve when you open your doors.
5. Define Your Business Plan
Sure, you’re starting a franchise, which means you’re entering into an already established business model. Still, having a plan for how you’ll grow that business model in your region is important. Defining your business model before investing in the franchise will help you pinpoint areas where you’ll thrive and where you may need extra help, resources, or capital.
Remember, there are always things to learn and ways to grow through your journey. The goal isn’t to have everything crystalized before you begin. It’s just to begin in a way that minimizes risk and maximizes the chances of success for your new franchise investment.
Kimberly Crossland is the founder of Roadpreneur and Cruisin' + Campfires, two companies designed to keep families together and living in freedom through travel and entrepreneurship. The goal of both businesses is to inspire meaningful change through the power of a strategic, thoughtful approach to life and business. In her free time, you can find her looking for a new adventure together with her two boys.