What holds many people back from owning a business is fear. Most are afraid the business will fail, and the investment will be gone.
Common Fears of First-Time Franchisees
Many people invest in a franchise to reduce the risks of owning a business. However, even when considering tried and true franchises with outstanding track records, you can expect various fears to interrupt your thoughts of owning one.
Here are some straightforward solutions to cope with these fears.
1. Investment Risk
Pick a franchise where the owner’s role fits your strengths and skills to minimize risking your significant investment.
Many early business closures are due to insufficient cash or working capital. Franchises reduce this risk in three relevant ways.
First, the total investment amounts are provided in writing in the Franchise Disclosure Document (FDD). Second, during the fact-gathering stage of a franchise evaluation, prospects should ask other franchisees how much the upfront costs were and how much working capital reserve they needed. Third, franchises have minimum financial requirements which must be met.
3. No Experience
If you chose a franchise based on your skills, the fact that you have no prior experience with the industry or company type should never be an obstacle for you. Keep in mind that franchisees give extensive training on their specific business as well as continuing assistance during your career with the brand.
When you match a franchise to your abilities, you can be confident that the type of business you are purchasing is most suited to your strengths.
4. Making Mistakes
You're afraid of making costly mistakes, whether due to a lack of technical abilities or just making a poor judgment call. After all, this is your first franchise and probably your first business.
The solution is to confirm the level of training and assistance supplied by speaking with current franchisees who have almost definitely faced every decision-making circumstance you will face. So you're only a phone call, text message, or email away from getting first-hand guidance.
Everything about the franchise is tailored to you, your budget, and your objectives. But you're worried about too much competition.
The remedy to this worry is to ask the franchise salesperson a few questions.
- What are your competitors' names?
- How can you set yourself out in a competitive marketplace?
- What is the franchise's definition of territory?
- Where can I find the nearest franchisees in the area?
- Is the market saturated? What led you to this conclusion?
- What is the franchise's marketing strategy?
6. Fear of the Unknown
Your franchise success depends upon the franchise you select, the quality of advice you receive, and the skills you bring to the business. A franchise has a recipe for success. Be sure to follow the recipe!
In my process, we dive into fears as they come up, we address them together. I help give you the space to discern a fear versus a real concern. It’s hard to do alone. Schedule a call here.