Jumping into any new business, including that franchise you purchased, can be scary. But unlike starting an independent small business, franchisors will lay out a very clear road map, from buying in to start-up costs to opening your doors. But even with a clear roadmap, there are still pitfalls for the new franchise owner. Here are some do’s and don’ts to help you avoid the traps.
DO assess your professional skills
Before you decide on the franchise you want to purchase, take stock and be honest. What do you love? What are you best at? What don’t you like (for instance, if interpersonal relationships are not your thing, really think about whether that restaurant franchise is the right move). Think about what you’re good and what you like before you jump in, not after it’s too late.
DON’T be seduced by the newest franchise
New franchises pop up all the time, and many of them will be successful, but new doesn’t always mean better. Think about how much support you will get from a new franchise. Will you have insight from other owners to help you along the way?
DO research and conduct due diligence
Before you jump in, make sure you do the research. This includes speaking to current and former owners and reading through the Franchise Disclosure Document (FDD). Have a lawyer look over the FDD before you sign. It’s also a good idea to have a financial advisor look over all your plans to make sure you’re financially prepared.
DON’T buy without meeting the team and executives
Part of buying a franchise is taking a lot of direction from the owners and executives. They’re going to set the direction and make plans for the future of the franchise. If you don’t get along with them, your franchise life is going to be difficult. By forging a great relationship up front, you’ll feel more comfortable raising issues or asking for help.
DO get help where you need it
Just because you’re the business owner doesn’t mean you should do everything. Spend the time where your skills are the most valuable (remember that list you made) and hire help where needed. Great entrepreneurs know that smartsourcing lets them get more done in the business by using experts in key areas.
DON’T buy new
Yes, your franchise is new to you, but that doesn’t mean all your equipment has to be. Finding ways to save costs up front can help you keep money in the bank and ensure you have cash on hand for any unforeseen expenses (and they always happen). Working with a bookkeeper that knows your industry can help you decide where you can save money and where you should spend.
The key to being a great franchise owner is knowing when you need to bring in expert help and when you can do it yourself. If you’re looking for a financial advisor with franchise-specific knowledge, get in touch. We’ll take a look at your books free of charge.