By: Lynette Chartier
Just like everything else in life, no business model is 100% good or 100% bad. You will need to weigh the pros and cons of franchising, for yourself.
Franchising can be a nice compromise between starting a business from scratch and buying an existing business. The comfort with this business model comes from the fact that a franchise arrives with a cookie cutter plan.
FACT: According to Entrepreneur magazine, 95% of businesses that don't have a system fail and 95% of businesses with a system succeed. Statistics do not lie, systems work!
BENEFIT: A franchise owner has a definite system to follow.
NEGATIVE: The more popular franchises that bring in the larger profits also require a large up front cash investment that can fall between $400,000-$1 million or more. You are also going to be required to pay royalty fees for the life of your business. These fees are in addition to all of your operating expenses and in the end they can be the factor that really prevents you from ringing in your profits.
Take some time to search out various franchises and ask the following questions:
* What is the total upfront investment?
* What is my net worth requirement?
* What is my cash liquidity requirement?
* What is the franchise fee?
* What is the ongoing royalty fee?
* How long before I can think of seeing a profit?
Note the "net worth" and "cash liquidity" requirements would prevent the majority of people from even qualifying for this business option. To the best of my knowledge it takes on average 3-5 years to start seeing a profit. The vast majority of folks have a hard time waiting this out.
When my husband and I looked at purchasing a franchise, we were pretty excited, until we spoke directly with a few franchise owners. As if the initial costs weren't enough, we would eventually need to have several locations of the franchise to start turning over serious profits. We didn't have the cash for one, how would we ever finance two or more.
We came to the realization that franchise owners had in fact bought themselves a 70-90 hour a week job. We would both need to put in incredible hours in order to train and oversee staff, to build up our clientele, to do the ordering of products, to clean up and so on. At the time we were parents of young children. That scenario would never afford us our desired lifestyle, and we would be even more stressed than we were with our current jobs. Time freedom is not one of the benefits you get with your first franchise.
There are many other factors to consider while researching a franchise. However let us not forget one of the most important factors: YOU!
You must assess your strengths. The ideal franchisee is someone who is outgoing, energetic, a self-starter, and very eager to succeed. Independence is important but not so independent that you resent other people's suggestions and ideas.
What state of health are you in? Do you have family commitments and if so how do the other members of the family see this venture? Will you get support and encouragement? Will you be spending much time agonizing and doing guilt, because you are spending so much time away from home?
However, a family that has a strong WHY and big goals can achieve much satisfaction and benefits from working together.
After all this talk on franchises, the ideal is to find a business model with the strengths of a franchise but without the high costs and long hours. Do such businesses exist? The great news, of course they do. You just have to spend a little time seeking them out.
The Power Is In Your Hands!
Article Directory: http://www.articledashboard.com
Businesswoman, Friend, and Team player Lynette Chartier assists Women to be success stories and inspiration to others. The fact that you are investigating the home-based business industry is a sign that you have dreams and trust in those dreams. Let me assist you: go to my website and register for the FR.EE newsletter and receive a copy of the FR.EE “Building Business Report”.Visit: Be a BraveHeart Woman
Just like everything else in life, no business model is 100% good or 100% bad. You will need to weigh the pros and cons of franchising, for yourself.
Franchising can be a nice compromise between starting a business from scratch and buying an existing business. The comfort with this business model comes from the fact that a franchise arrives with a cookie cutter plan.
FACT: According to Entrepreneur magazine, 95% of businesses that don't have a system fail and 95% of businesses with a system succeed. Statistics do not lie, systems work!
BENEFIT: A franchise owner has a definite system to follow.
NEGATIVE: The more popular franchises that bring in the larger profits also require a large up front cash investment that can fall between $400,000-$1 million or more. You are also going to be required to pay royalty fees for the life of your business. These fees are in addition to all of your operating expenses and in the end they can be the factor that really prevents you from ringing in your profits.
Take some time to search out various franchises and ask the following questions:
* What is the total upfront investment?
* What is my net worth requirement?
* What is my cash liquidity requirement?
* What is the franchise fee?
* What is the ongoing royalty fee?
* How long before I can think of seeing a profit?
Note the "net worth" and "cash liquidity" requirements would prevent the majority of people from even qualifying for this business option. To the best of my knowledge it takes on average 3-5 years to start seeing a profit. The vast majority of folks have a hard time waiting this out.
When my husband and I looked at purchasing a franchise, we were pretty excited, until we spoke directly with a few franchise owners. As if the initial costs weren't enough, we would eventually need to have several locations of the franchise to start turning over serious profits. We didn't have the cash for one, how would we ever finance two or more.
We came to the realization that franchise owners had in fact bought themselves a 70-90 hour a week job. We would both need to put in incredible hours in order to train and oversee staff, to build up our clientele, to do the ordering of products, to clean up and so on. At the time we were parents of young children. That scenario would never afford us our desired lifestyle, and we would be even more stressed than we were with our current jobs. Time freedom is not one of the benefits you get with your first franchise.
There are many other factors to consider while researching a franchise. However let us not forget one of the most important factors: YOU!
You must assess your strengths. The ideal franchisee is someone who is outgoing, energetic, a self-starter, and very eager to succeed. Independence is important but not so independent that you resent other people's suggestions and ideas.
What state of health are you in? Do you have family commitments and if so how do the other members of the family see this venture? Will you get support and encouragement? Will you be spending much time agonizing and doing guilt, because you are spending so much time away from home?
However, a family that has a strong WHY and big goals can achieve much satisfaction and benefits from working together.
After all this talk on franchises, the ideal is to find a business model with the strengths of a franchise but without the high costs and long hours. Do such businesses exist? The great news, of course they do. You just have to spend a little time seeking them out.
The Power Is In Your Hands!
Article Directory: http://www.articledashboard.com
Businesswoman, Friend, and Team player Lynette Chartier assists Women to be success stories and inspiration to others. The fact that you are investigating the home-based business industry is a sign that you have dreams and trust in those dreams. Let me assist you: go to my website and register for the FR.EE newsletter and receive a copy of the FR.EE “Building Business Report”.Visit: Be a BraveHeart Woman
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