You are the most important part of your new life and the success of any franchise business you choose
The pandemic has caused so many people to reflect and rethink their lifestyles and buying a franchise can be a great way to run your own business and achieve a better work-life balance. But choosing to buy a franchise and finding the right one is something you should take your time over. The MagiKats franchise team has identified three key areas that you should consider before making your decision.
You are the most important part of your new life and the success of any franchise business you choose. For that reason, you should take time and reflect on the following questions:
• What matters to you and what do you enjoy?
Do you just want to make money, or do you want to give back? It’s very important to bear in mind there is no right or wrong answer to this, but you do need to be honest with yourself about what drives and inspires you, what makes you want to get up in the morning, what sort of role you want to play in society, and what are your personal values.
• What skills and experience do you have?
For an educational franchise, you don’t have to be a qualified teacher, but if you’re hopelessly disorganised and hate marketing and planning, franchise life may not be for you. But if you’re great with kids but don’t have teaching experience, an educational franchise could still be a good fit. Again, it’s a question of being honest with yourself about what you’re good at and those skills you have that you really enjoy. If you are a brilliant communicator but have no patience for children, another type of franchise might suit you better.
• What are your financial needs and resources?
How much money have you got to buy a franchise? How much money do you need to make from a franchise and when by? How much do you want to make from a franchise? The planning you do here will be provisional at this early stage of your research but it’s the building blocks of your future business planning.
• How much time have you got, or do you want to have?
Every franchise requires a degree of effort in order to succeed and generally speaking, you’ll get out what you put in. If free time is more important to you than making a lot of money, that doesn’t rule out a franchise, you just need to acknowledge it and factor it into your financial plan. If you can, speak to those who already run a franchise to find out how much work they put in for what return and then use that as a benchmark for deciding what you want.
• What are your life goals?
Linked to all of the above, it’s worth reflecting on your life goals. If you’re young, do you want to start a family and will you continue to run your franchise when you do? Or perhaps you dream of going travelling? If you’re older, are you thinking about leaving a legacy and if so, what does that look like? A legacy doesn’t have to be financial; it’s about leaving your mark in some way.
The above questions aren’t necessarily a comprehensive list, but they should provide you with food for thought and you should take your time thinking about them. Walk around with them, talk about them with your partner or a friend, or write your answer down if it helps.
If the above has confirmed your view that a franchise is for you, the next step is to choose your sector. There are literally hundreds of different industries to choose from but the questions you’ve answered above about your likes, skills, motivation and life goals, should all help you decide.
A quick search online will give you an idea of the different sectors which include travel, cleaning, accounting, communications, hospitality, care, fashion, and of course, education. Again, take your time over this. Perhaps draw up a short list of areas that resonate with you and do a little bit of research before you make your decision.
When you’ve chosen your sector, you’ll probably find there are a number of different franchisors to choose from. Once again, the work you have already done about what is important to you will be enormously helpful. Draw up a shortlist of franchises and then consider the following main areas:
• Costs and income projections
One of the most important factors is to work out whether the cost of a franchise is within your budget, but it’s not always simply a case of knowing what the price is. A franchisor should also be able to give you an idea of what you can expect to earn and by when, and they may also be able to provide information about funding your investment if you’re thinking of borrowing.
For example, although you need to factor in your current salary and household costs, these can also form part of the business plan and funding support and your projected drawings may be used as part of the lending criteria. That also gives you the additional choice of whether to gradually reduce your current hours as you make the transition to franchise owner or go straight into it by adding your basic salary to the borrowing to cover the business start-up period. Understanding these different options early on will help ensure you can make an informed decision and can ease the financial burden.
Don’t underestimate the importance of your franchisor’s values. You will be joining forces with your franchisor, hopefully operating under their umbrella for a long time. If their values aren’t immediately obvious, ask about them and ask yourself if this feels like a good fit? Are they a hands-on family franchise or are they more corporate? What suits you?
Another important area is finding out how much support you will get from them. This covers a wide area from business planning, marketing, IT, processes and paperwork right down to whether you’ll be able to pick up the phone and speak to someone in a crisis and whether there is a good network of support with other franchisees. Again, be honest with yourself, if you prefer to work in isolation with minimal support, that’s fine although a franchise may not be for you.
• Process and operations
Even within the same sector, there will be different ways of operating. For example, MagiKats prefers to deliver its tuition in person, rather than virtually. It also aligns what it does with the National Curriculum, focussing on the core subjects of maths and English as well as applied skills such as reasoning. Not every educational franchise will deliver the same material in the same way, so think carefully about what resonates with you.
How long has your chosen franchisor been around and how much experience have they got both as a franchisor and in your sector? For example, have they been a franchisor for 20 years but are new to your particular sector? What accreditations or awards do they have? What opportunities are there to speak to other franchisees before you buy?
Franchising can be a rewarding life choice if you do your homework when it comes to selecting the opportunity that suits you best.