Expert advice from Ben Ashton, co-founder of Good Oaks Home Care
Interested in buying a franchise? Before you dive in, here are the six factors you must consider before you start to look at your options:
1. Do something you love
Do something you find rewarding. In terms of the care industry, it’s incredibly rewarding because you know you’re making a big difference to someone’s life.
You have to think about what makes you happy and what you would be interested in doing.
For example, if you love health and fitness, a gym franchise might be the best option or if you like to get out and about and prefer practical work you could be better suited to a man-and-van opportunity.
You have to think about what motivates you and what you find stimulating because you simply won’t excel in an area you’re not interested in.
2. Think about your budget
What can you afford and how much will it take to get the franchise up and running?
For example, care is a management-based franchise and you would expect to have higher set-up costs than a man-and-van or cleaning franchise. So you need to think about the working capital you would need to set up and start running the franchise before you set your heart on it.
Make sure you have a comprehensive financial plan in place if you’re likely to need to borrow money for initial set-up costs and ask yourself how much you need to live off.
Look at your personal finances, your incomings and outgoings and work out your overheads. Sound financial planning puts you on the best possible path no matter what franchise you choose.
3. Research your niche
Do your own market research and competitor analysis.
Look at what other businesses are in your area. Are there any franchises operating? It’s a good sign if there are, as it means there’s a healthy appetite and market for your new service because there’s already an established need.
Look at the demographic of the area. What’s the make-up of the people in your neighbourhood? Is there a gap in the market that your product or service could help fill?
4. Get a feel for the franchise
Talk to the potential franchisor. How does the business come across?
Is the franchisor open and transparent with its figures? Does it clearly explain the systems and how the franchise works? Do you feel drawn to the company’s ethos and ideas? How do you see yourself fitting into the franchise and the personality of the business? Does it align with your personal values?
5. Is being a franchisee for you?
Being a franchisee comes with a host of benefits, including the training and support you receive from your franchisor.
However, it does mean that you don’t have as much flexibility when it comes to things like branding. This is because franchisees have to use the branding of the franchisor.
So if you’re very creative and love designing logos and leaflets, a franchise may not fit your personality. It depends on what you want from a franchise and what you personally value in terms of your business set-up.
6. How future proof is the franchise?
With COVID-19 hitting companies hard this year, many people are looking at business opportunities in a different way.
So one thing to think about with regards to a franchise is how resilient the business model is in light of things such as COVID-19. Is it an essential service? Is it high street-based? Is it flexible? Could you work from home if you needed to?
Look at the sector you’re interested in and research the trends that have emerged over the last few years - and this year in particular.
Remember, looking into franchising should be fun, exciting and it’s meant to open your eyes to the hundreds of possibilities out there for you.
