June 14, 2021

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.