Start Your Own Business With a Franchise (Part 2)

Nick Making Money 0 Comments

In my previous article I explained the basics of franchising and revealed some of the attractions of the method to anyone hoping to set up a business of their own.

I also discussed the personal qualities and skills required to run a business, whether a franchise or otherwise. You don’t need to have all of these initially to make a success of running your own business, but you will almost certainly need to develop them.

Today I’ll be setting out some advice on choosing the right franchise for you, and how to run your franchise successfully. I’ll also be listing a selection of current franchise opportunities, along with resources for finding many more.

Before that, though, let’s recap on the main attractions of the franchise route, along with a couple of possible drawbacks.

Franchising Pros and Cons

The main attraction of franchising is that you are buying into a ready-made business format.

While this does not guarantee the success of your business, with a good franchise you will be getting a format that has worked well for others, and with a little luck (and a lot of hard graft) should work for you too.

Another benefit is that, as a franchisee, you are not alone. If you have any problems or queries, the franchisor will be available to advise and support you. They will also in most cases provide training, promotional materials, and so on. You may also be able to network with franchisees in other areas for mutual support.

On the downside, running a franchise will require you to follow the franchisor’s format very closely. If you are a free spirit who likes to carve your own path in life, you may find the restrictions imposed difficult to bear.

The other drawback is, of course, you have to pay the franchisor! Typically there will be an up-front fee and further regular payments for support, training, materials, and so on. Obviously, with a good franchise you get plenty back for your money, but ultimately all these costs have to be covered by you and your business.

As mentioned last time, some big franchises such as McDonalds will set you back a six-figure sum. Finance deals may be available through the franchisor and other lenders, but you are still likely to have to fund a substantial chunk of the initial cost yourself.

If money is tight, however, there are lower-cost franchise opportunities as well. Later in this article I will set out a range of options to suit all budgets.

Choosing a Franchise

It’s important not to rush into choosing your franchise. Nowadays a huge range is available, and it’s vital to take some time to assess the options and identify which might be the most suitable for you.

A good place to start is a franchise exhibition. Held in cities across the UK, these events give you the chance to check out many different franchises and – just as important – chat with the franchisors. Obviously the pandemic meant many exhibitions had to be cancelled, but as normal life gradually resumes they are returning to the calendar again.

The biggest exhibitions are those organised by the British Franchise Association in cities including Manchester, Glasgow, London and Birmingham. Entry is generally free as long as you register in advance. A good place to find out about upcoming exhibitions (and much more besides) is the website https://www.franchiseinfo.co.uk.

Here are a few more tips for choosing the right franchise…

• Choose something that interests you personally. You are more likely to succeed in a business you enjoy, as you will put more effort and enthusiasm into it. If you like cars, for example, there are franchises covering everything from vehicle rentals to fixing dents and scratches. If working in the outdoors appeals, you could focus on areas such as landscape gardening or window cleaning.
• Look for franchises that will fit in with your family and personal circumstances. Sectors such as retail and catering involve long hours, often in the evening and at weekends. If you have childcare concerns, or simply fancy seeing your other half and friends now and then, you might prefer to focus on franchises that allow you a bit more free time.
• Aim to pick a franchise with a good track record and reputation. Be wary of new franchises, especially those based around an unproven product or service. Remember that the franchise is going to have to provide your livelihood potentially for many years to come. You don’t want to hitch your wagon to a business that may prove no more than a short-lived fad.
• Once you’ve identified some franchises that interest you, ask the franchisors for contact details of existing franchisees you can speak to. Don’t let them fob you off with one or two names. Request a list and choose a few at random to contact. Ask in particular how they get on with the franchisor and what the quality of support has been.
• If at all possible, arrange to visit one or two existing franchises and stay a few hours to see what the work involves and whether or not it would appeal to you. This can be very illuminating.
• Ensure the financials stack up. Study the projections provided by the franchisor and see if they tally with your own research, bearing in mind local market conditions. Your accountant, bank and existing franchisees can help verify your findings and assumptions. If the projected revenues look too good to be true, they probably are!
• Also bear in mind that your start-up costs will need to be deducted from your revenues, so don’t leave yourself short. It may be 6–12 months until your business is fully established, and during that time you will need to have enough money to cover all your costs and expenses, including feeding yourself and your family!
• Before proceeding further, an essential step is to draw up a detailed business plan. This should cover such things as the size of your territory, local competition, the national and local economic climate, trends affecting the product/service you will be supplying, and so on. It should also include a cash-flow projection showing anticipated monthly income and expenditure for at least the first twelve months.

Your business plan will be an invaluable guide when planning and running your business, and it will also be a necessity if you have to apply to a bank for finance.

Running Your Franchise

Having bought your franchise, you will of course want to get it making money for you in the shortest possible time. Here are some tips for starting and running a successful franchise…

• Keep in regular touch with your franchisor and act on any advice they give you. Whatever issues you may be facing, you can guarantee that someone, somewhere has already faced something similar, and the franchisor will be able to advise you how they dealt with it. Use the franchisor’s knowledge to your advantage rather than learning the hard way. That is why you paid for a franchise rather than setting out on your own.
• Improve your business skills. While franchisors will teach you their system, most also expect you to bring some basic business skills to the table. If you don’t know accounting basics, how to read and work with financial documents or how to hire and manage employees, you’re likely to encounter problems. If your sales skills are rusty, your knowledge of business taxes is shaky or you’re not up to speed on internet marketing, consider taking a class to improve your skills. Classes are often available at local colleges, and there are also online courses and seminars that require less time and monetary investment.
• Likewise, make it your business to learn everything there is to know about your industry (in addition to whatever you found out during your franchise research). Almost every sector has associations and meetings where business owners gather and share ideas – these can provide a great forum for learning and networking. And, as mentioned earlier, your fellow franchisees can also provide invaluable insights into your industry.
• Monitor your cash flow carefully. Regularly compare the figures in your forecast with the reality, and use this to make informed decisions about your business. It’s important not to under-estimate the working capital required to run a business day to day while it is growing. Cash-flow problems can be mistaken for poor profitability, in the early months especially. Careful planning and monitoring will reveal how you are really doing and prevent unpleasant surprises.
• Market your business. Even with the franchisor’s name and system behind you, your business won’t sell itself. The fact is there is no-one better to market your business than you. Use the passion you have for your product or service to talk to people face to face. Enthusiasm is infectious and you will be more successful. Monitor carefully the results of any marketing activity, however. You don’t want to waste your money in future if a campaign has not proved profitable for you.
• Master time management. As a business owner you only have so many hours per day and it’s important to deploy them wisely. Planning and flexibility are the keys to success when it comes to time management. Time spent planning saves a lot more time in the long run. But be flexible as well, and constantly assess any task associated with running your business to see if it can be done more efficiently.
• Stay up to date with paperwork. Don’t leave it for a month then attempt to do it all in one day. Not only does this become a depressing chore, but by the end of that day you are more likely to be tired and make mistakes.
• Wherever possible invest in IT and developing your computer skills. Many aspects of running a business can be performed faster and better with the aid of computers, from invoicing to accounts, marketing to stock control. Don’t forget to back everything up on a regular basis!
• Recognize your strengths and weaknesses and use them to your advantage. If you really are terrible at managing one aspect of your business, employ someone to manage it for you. Your time will be better spent on the aspects of your business you are good at and enjoy.
• Reward Yourself. The responsibility of running your business is down to you, and that includes rewarding yourself when things go well. Set yourself a goal and when you achieve it give yourself a little reward. You would do it for an employee, so why not for yourself?
• And finally, enjoy yourself. The chances are you decided to start a business because you wanted to enjoy your work more than you were previously. Yes, running a franchise does require effort, determination and tenacity, but don’t lose sight of the reason you started. Stay positive, enjoy the challenges, and never lose your sense of humour. Have fun!

Example Franchise Opportunities

As promised, I have set out below a selection of franchise opportunities you might like to consider. As well as some high-profile (and high-cost) franchises, I have also included some that may appeal to those on a more limited budget.

1. The Pets, Homes and Gardens Company

Website: https://www.petshomesandgardens.co.uk Cost: £995

This is a pet-sitting and home-care franchise. The work involves visiting clients’ homes while they are away and looking after their pets, as well as keeping an eye on their homes and gardens.

2. Kumon

Website: https://www.kumon.co.uk Cost: £3,000

This franchise involves setting up your own Kumon maths and English study centre. To become a Kumon instructor you should have an interest in education, an understanding of business, and enjoy working with children.

3. Harmony at Home

Website: https://www.harmonyathome.co.uk Cost: £3,300

Harmony at Home is a recruitment and consultancy agency for the childcare industry, providing both permanent, temporary and supply nannies and childcare staff, as well as training courses and consultancy services. The franchise can be operated from home or from an office.

4. My Window Cleaner

Website: https://www.mywindowcleanerfranchise.co.uk Cost: £8,000

Everyone needs their windows cleaned, so there will always be a market for this business. My Window Cleaner offers training, marketing assistance and admin support via an app.

5. Open House Estate and Letting Agents

Website: https://www.onlineestateagents.org.uk (franchise info here) Cost: £1,000

This low-cost franchise involves setting up your own home-based estate and letting agency. Full training is provided.

6. Countrywide Signs

Website: https://www.countrywidesigns.co.uk Cost: £22,950

This business involves going round in a van installing and removing estate agents’ signs. You can start with a single van, and get more vans and take on staff to boost profits further.

7. Haus Maids

Website: https://hausmaids-franchise.co.uk Cost: £9,950

This franchise involves running a local branch of Haus Maids, a company that provides one-off and regular cleaning services for domestic homes. This is a managerial franchise, so the work involves managing a workforce of cleaners rather than actually doing any cleaning yourself.

8. Travel Counsellors

Website: https://recruitment.travelcounsellors.com/gb Cost: c. £10,000

Travel Counsellors is a company that offers clients the opportunity to book a bespoke holiday or business trip, planned for them to the finest detail by a trained and experienced Travel Counsellor. Experience in the travel industry is a particular asset with this franchise. It’s not essential, however, as full training is provided to bring franchisees up to the required standard.

9. Chips Away

Website: https://www.chipsaway.co.uk/franchise Cost: £29,995

This is a van-based business. Franchisees provide a service to vehicle owners, repairing scuffs, minor dents, scratches and other damage.

10. McDonald’s

Website: https://www.mcdonalds.com/gb/en-gb/franchising.html Cost: £400,000+

McDonald’s is one of the best-recognised brands in the world. A growing number of their restaurants are run by franchisees. This is not an opportunity for the faint-hearted, and applicants have to submit to a selection process as well as having at least £100,000 in unencumbered funds. For those accepted, though, the financial rewards can be considerable.

Note that all the costs stated above are approximate minimum amounts and do not include any ongoing payments that may also be required. VAT is also likely to be charged, though you may be able to claim this back once your business is up and running (and registered for VAT).

• There are, of course, many other franchise opportunities as well. To see a much wider selection, visit Franchise Direct, The UK Franchise Directory or Franchise Info UK.

Closing Thoughts

As I hope I have demonstrated in these articles, if you want to start your own business, buying into a franchise is definitely something you should consider.

Not only will you be getting a tried-and-tested business format to follow, you will also have access to advice and support from the franchisor any time you need it. You will still need to put in some hard work yourself, of course, but your chances of success should be significantly boosted compared with going it alone.

What’s more, there are thousands of different franchises available, in a wide range of industries, and at prices to suit all budgets. Don’t rush into buying a franchise, therefore, but take some time to explore a range of options. And hopefully in less time than you think there is every chance you will be running your own profitable franchise and enjoying the many benefits of being a successful business owner.

As always, if you have any comments or questions on these articles, or franchising in general, please do leave them below.

Start Your Own Business With a Franchise (Part 1)

Nick Making Money 4 Comments

If you want to be your own boss, the franchise route is well worth considering.

Franchising isn’t a business in itself, but rather a method of ‘buying into’ a brand and format devised by someone else. With a franchise you typically pay the franchisor an up-front fee, and possibly additional fees once you’re up and running as well.

Franchising has become a very popular method for getting started in business. It has the great advantage that you aren’t starting from scratch. In exchange for your fee, you gain the right to trade under the franchisor’s brand name. You get a ready-made (and hopefully proven) business plan, along with training, materials, assistance with marketing, and access to advice and support any time you need it.

A huge range of franchises is available, and there’s something to suit most budgets. At the lower end of the scale, you can get started as an Avon distributor for as little as £10. At the other end of the scale, you could pay up to £800,000 to purchase a McDonald’s franchise (see cover image).

In between these is a wide variety of businesses, from carpet cleaning to recruitment, gardening to children’s entertainment. While some franchises require business premises, many others can be run from home and/or a car or van.

Of course, some franchises are better than others, and it’s important to research any that interest you carefully. So in this two-part series I’ll be sharing some tips on choosing the best franchise for you and getting the most out of it. I’ll also be setting out a range of current UK franchise opportunities to give you an idea of what’s available.

In this first article, though, I want to start by addressing the more fundamental questions of what running a business entails and the skills and aptitudes required.

Business Basics

At the risk of stating the obvious, running a business is a very different thing from doing an ordinary job.

As a business-owner, you will be responsible for every aspect of your business’s operation. As well as providing a product or service, all the ancillary matters from marketing to book-keeping, purchasing to recruitment will become your responsibility.

Of course, you will get help with many of these from the franchisor, and you may also choose to outsource some to professionals such as book-keepers and/or paid staff. Nonetheless, you will need to oversee all of these tasks and ensure they are done properly even if you don’t do them yourself. That is quite different from an ordinary job, where you simply do whatever task you are paid for and leave everything else for your employer to worry about.

Running your own business requires a particular set of aptitudes and skills, and there is no doubt it suits some people better than others. In the next section I’ll set out the main qualities you need for business success.

Requirements for Success

Everyone has different views on which qualities are the most important for success in business, but there are certain ones that come up time and time again…

(1) Determination

Many people talk about starting a business, but only a small proportion do anything about it. Starting a business is a major decision that will undoubtedly change your life and that of your family. It is important that you are committed to your new career before making such a move; and that once you have started the business you are determined to see it through to success.

(2) Willingness to Work

We all think we are willing to work hard, but if you start a business you will soon find out what this means in practice! In the early days at least you are likely to have to work longer hours than the average employee. Although as your business becomes established some of the pressure may ease, you must still expect to work longer and harder than most people in paid employment.

(3) Persistence and Perseverance

Successful business people let nothing get in the way of achieving their goals. If they encounter problems, they try to find ways to overcome them. If their first attempt doesn’t succeed, they try a different approach; and, if this doesn’t work, another. They are not put off by pitfalls, or discouraged – other than temporarily – by failure. They persevere in their efforts until, eventually, they do succeed.

(4) Stamina

In view of the hours you are likely to have to put in, stamina and at least reasonably good health are important. People running businesses have to avoid taking time off for sickness if at all possible. As a self-employed sole trader in particular, if you are not working you are not generating any income. And if you let down a customer, next time he is likely to go elsewhere.

(5) Self-discipline

If you are in a paid job the chances are you will have a manager or supervisor, part of whose duty is to ensure that you fulfil your obligations to your employer. Your reasons for wishing to start a business may include escaping from such individuals! However, while as a business owner you will have no-one standing watch over you, you will still have obligations to customers, suppliers, employees, officials, and so on. If your business is to go on running successfully, it is important that you have the self-discipline to fulfil all your responsibilities and see a job through to the end.

(6) Willingness to Take Risks

All business people have to take calculated risks. Whereas in a job you have the relative security of a regular wage or salary, as a business owner there is no guarantee what your income will be from one month to the next. You will constantly find yourself having to make decisions about where and how to advertise, which areas to specialize in, when to invest in new equipment, and so on. Although this constant decision-making can be stressful, it can also be satisfying and enjoyable. Solving problems and making decisions can give you a sense of power and confidence. And if you are running a franchise, you will be able to get advice and assistance from the franchisor, of course.

(7) Ability to Cope with Stress

Starting and running a business will inevitably impose a range of stresses, both on you and your family. In the beginning at least, long hours, hard work and disruption to family life can cause tension. To be successful in business you need to be able to cope with, and even thrive on, this kind of pressure.

(8) Enthusiasm

Enthusiasm is an essential ingredient of every business owner. If you are half-hearted about your venture you may have difficulty summoning sufficient determination to overcome problems when they arise. If you are enthusiastic, on the other hand, you will relish the challenges your business presents. What’s more, your enthusiasm will rub off onto customers, employees (if you have them) and other people you have to deal with. Most of us would far rather work with or buy from someone who is enthusiastic and enjoys his work, rather than someone who is permanently depressed about it.

(9) Ambition

Most business people have a driving ambition to achieve the best they can for themselves and their loved ones: as well as money, this may include financial security and a better way of life. With such ambitions they can cope with any setbacks along the way, because in their mind they have a goal or vision that drives them on. Ambition and determination together can overcome many obstacles. In business, as in most others aspects of life, if you know what you want and are determined to achieve it, the chances are excellent that you will succeed.

(10) Honesty and Willingness to Give Good Service

Finally, every business depends for its continuing survival on a circle of satisfied customers. If people are pleased with the service they have received from you, they are likely to recommend you to others as well as keep coming back themselves. By contrast, if you give poor service then, even if they do not complain at the time, they will not return; and rather than recommend you to others, they will warn them about you (quite possibly nowadays on review websites that anyone can find). If you have a good reputation this will ensure that more people keep coming to you. For this reason, successful business people go to great lengths to obtain and keep a good name for themselves.

• Franchisors are, understandably, fiercely protective of the good name of their brand. In many cases they will want to conduct checks to satisfy themselves that you are a suitable person to run a business in their name. Don’t be surprised or offended if this happens, therefore. It’s actually a good thing, as it demonstrates the franchisor’s long-term commitment to preserving their reputation.

Friends and Family

Just as it is important to have the right personal qualities yourself, you will also need a supportive family and friends.

If you decide to start your business from home, this will inevitably cause changes and disruption in the family routine. Even if you use separate business premises, your friends and family will still have to come to terms with your working long hours and having less time and energy for leisure activities. If you are married or living together, it is especially important that your partner understands the implications of your setting up in business, and supports what you are trying to do.

There is also a positive side, of course. Your family may be a valuable source of help in all sorts of areas, from answering the phone and writing letters, to book-keeping and assisting customers. Having others closely involved with the business can assist when problems arise, as they will bring different ideas and perspectives to the situation.

Although it is not absolutely essential to have a supportive family, there is no doubt that you are more likely to succeed if you have discussed your plans with them and have their wholehearted support.

Your Skills

To run your business successfully, as well as the right personal qualities and a supportive family and friends, you will need a range of skills. These are described in general terms below. If you lack any of these it does not necessarily mean that you should not set up in business. However, if you feel any of these areas is going to present serious problems, you might want to consider taking on a partner or employee to handle that aspect of the business, or using a specialist adviser or consultant. You might also consider taking additional courses to acquire the skills you need.

(1) Technical Skills

These are the skills that you need to actually deliver the service you are offering. In the case of a franchise, training will normally be provided to help you achieve the necessary standard. Obviously some types of business will require more in the way of technical skills than others, and you may also choose to employ staff to deliver services on a day-to-day basis. Even if the latter applies, however, you should still have an in-depth knowledge of the service in question, so you can ensure that all your customers receive the high quality service they expect.

(2) Financial

To run a business successfully you will need a range of financial skills. These include such matters as book-keeping, negotiating credit terms with suppliers, invoicing, credit control, estimating, drawing up budgets and controlling cash flow (the flow of money into and out of the business). Again, the franchisor or should be able to help with this, but it will be down to you to master the skills required and/or hire staff who can perform them to a suitable standard.

(3) Marketing

Marketing is the process by which you identify potential customers and persuade them to buy your products or services. It includes selling skills, and also such matters as pricing, advertising, sales promotions, public relations, and market research.

(4) Management

If you are going to employ others, you will need a variety of management skills in such areas as recruitment, motivating staff and team building. You will need a knowledge of employment law and health and safety requirements. You will also need to be able to fulfil legal requirements in matters such as deducting tax from employees’ pay.

(5) Organization

Whether or not you intend to employ others, you will need organizational skills to ensure that every aspect of your business runs smoothly. This includes setting up systems for dealing with orders and enquiries, keeping customer records, and so on. It also includes time management, i.e. ensuring that your time is used as efficiently as possible.

(6) Planning

Every business owner also needs planning skills. Good financial planning is crucial to the success of a business. Planning skills are also needed to take best advantage of new opportunities that may present themselves, and to avoid any problems due to changing market conditions. Good planning can avert many problems before they happen.

Many of these skills can be acquired through taking courses (including training provided by the franchisor), studying books and websites, talking to professional advisers, and so on. They will also develop naturally with practice and experience once your business is up and running. If you are to succeed in running a business of your own, however, the above are the most important skills you will need to master.

Closing Thoughts

In this introductory article I’ve talked about franchising as a means of starting your own business, and looked at the skills and aptitudes you will need to have or develop. Many of these requirements, of course, apply equally when starting any type of business, not only a franchise.

In case you’ve found this a bit daunting, I should say that everyone considering starting in business inevitably has worries and concerns (and the pandemic has obviously added a whole new layer of these) .With hard work and determination, however, you can almost certainly overcome the obstacles and set up a successful business. And choosing the right franchise will boost your chances of success even further.

In my next article I will discuss how to identify a good-quality franchise opportunity that is also a good fit for your own skills and interests. I will also reveal some steps you can take to ensure that you make a success of your franchise.