If lockdown has given you time to explore franchising, here are five further points to consider before taking the plunge
At the time of writing, the Bank of England has announced a new £100 billion stimulus package for the UK economy, amid fears of a surge in unemployment once the government’s furlough scheme comes to an end this autumn.
UK GDP fell sharply in April and although the full impact of COVID-19 on the UK economy is not yet clear, there will be job losses and some companies will not survive.
The global pandemic has impacted millions of people across the world. But it has also given many the time to think about how they want to spend the rest of their working lives. The thought of being able to take control of your own destiny by building your own business is more attractive than ever.
You may well be one of those people who doesn’t want to go back to your previous life of commuting, long hours and stress, but instead, want to be your own boss. Franchising can be the ideal way to reduce the risks when going it alone.
Before you decide
Here are five points to consider before deciding what franchise to invest in:
• Do you want to work from home and reduce the amount of travelling you have to do? Or have the weeks you spent in lockdown meant you’re looking for a premises-based or van-based business just to get out of the house? Costs vary widely, so look for something within your range.
• How much capital have you got available? Starting a business in a recession can mean a new venture takes longer to reach break-even and may need higher levels of working capital, so it’s even more important to ensure you have enough funding at the outset.
• Don’t be taken in by over-optimistic claims of ‘recession-proof’ franchises. However, some businesses are dependent on consumers having lots of discretionary cash to spend. These franchises could be hardest hit in an economic downturn.
• Ask franchisors how they have supported their franchisees during the COVID-19 crisis. Many businesses had to shut their doors for a period of time, but the franchisors that have a strong focus on supporting their franchisees will have kept communicating regularly, helped to keep spirits up, supported with training, reduced or paused fees and charges and assisted with furlough processes for the franchisees’ staff where appropriate.
• Doing your research is key, even more so in these challenging economic times. There’s plenty of advice and guidance available. Your first port of call should be the British Franchise Association’s Prospect Franchisee Certificate, which is a free online course.
Most important of all is to find a franchise you’re excited to take on, as you will need to be fully committed to the new business.
You’ll need a tenacious and determined approach to succeed, regardless of the economic circumstances.
Cathryn Hayes is franchise director at Revive! Auto Innovations