Are you thinking about opening a franchise but have no idea where to start? You’re not alone! Taking the leap into business ownership may seem confusing, terrifying, and overwhelming — but it doesn’t have to be. This guide breaks down the franchise purchasing and opening process into ten clear steps, so you can feel confident moving forward in your journey as a business owner.
Evaluate your needs, goals, and skills
Before choosing a franchise, take an honest look at yourself to determine what type of franchise is right for you. List your business goals, the level of support you want from the parent company, and the talents and skills that you bring to the table.
Even your personality matters. For instance, if you are more introverted and uncomfortable around crowds, a franchise focused primarily on sales and networking may not be the best option for you. On the other hand, you might thrive in a more one-on-one style of business, such as home healthcare.
Research your options
Once you’ve narrowed down your list of possible industries, you can start researching your local market to see what types of businesses could be successful in your area. Look at the demographics of your community, potential competitors and their customer bases, and your local market trends. This can also help you determine the best location for your business. For example, you probably don’t want to open a child-centered business in an area of town that is highly populated with retirees.
After learning more about your local market, you can begin looking at specific franchise opportunities within your chosen industries. Research their franchisee success rates, what they offer, and the cost of ownership, then prepare a list of questions that you have for them.
Speak to the franchise and their franchisees
Now it’s time to speak to the franchises that made your short list. Set up meetings or “discovery days” with the franchises you like and come prepared with your questions and concerns. However, keep in mind that this is also an opportunity for the franchisor to learn about you and evaluate your potential as a business partner.
If you feel good about the franchise, be sure to request a franchise disclosure document (FDD). The FDD will provide you with details on their operations and a more in-depth look into the franchise itself. In addition, it will also include a list of their current franchisees. Feel free to contact these franchisees to learn more about their partnerships and what it’s like being a part of that franchise.
Create a business plan
Once you’ve chosen the right franchise opportunity, you’ll need to create a business plan to present to both the franchisor and any involved lenders or investors. In short, a business plan simply lays out your strategy for building a successful business. It should include things like:
- Your education, qualifications, and skills
- The market research you’ve completed showing the business’s potential
- Research into the company’s products and/or services
- Your planned management strategy
- Your marketing plans to build your client base
- A viable financial forecast
If you don’t have the cash on hand, there are many different options when it comes to funding your investment. For example, you can:
- Sell or take out a loan on your investment portfolio
- Apply for a small business loan
- Look for partners or investors
- Access your retirement funds using a Rollover for Business Start-ups (ROBS)
- Tap into a HELOC (home equity line of credit)
Each type of funding has its pros and cons, so the best option just depends on your financial situation and what you can qualify for. However, keep in mind that the initial investment is separate from the operating costs and overhead. In addition to the funds needed to purchase a franchise, you’ll also need liquid assets available to run your business until it becomes profitable — which may take a few months.
Review and sign the agreement
Now it’s finally time to sign the papers and make it official. If the franchise you’ve chosen agrees to partner with you, they will provide you with a franchise agreement. This is a legally binding business contract, so you do not want to sign it without thoroughly reviewing the contents and making sure you are fully confident in moving forward. For extra peace of mind, you can have a lawyer look over the document to help you clearly understand what you are agreeing to.
Satisfy the legal requirements
As an official franchisee, it’s time to start working towards opening your business. Your franchisor should provide you with details on registering your business with the state and applying for the correct licenses and permits. However, you can also conduct your own research and get in touch with your local officials to make sure nothing is missed.
Build your team
Now you can start the process of hiring employees and building a team. You don’t necessarily have to fill every single position, but you do need enough talent and manpower to get started on the right foot. Your franchisor should have information on hiring staff and setting up a capable team.
Go through training
Franchisor-provided training typically includes both classroom and practical education for yourself and your initial team. You’ll learn even more about the company’s products or services, processes and systems, branding and marketing strategies, expectations, and anything else you need to succeed.
Prepare for opening day
As you prepare to open your doors, your biggest focus should be on generating interest in your business. Your franchisor will provide marketing and advertising materials, but you can also market your new business on a more local, personalized level through community events, networking, and social media. Just make sure you are thoroughly prepared for opening day so you can make a good first impression and set yourself up for future success.
So what are you waiting for? Get in touch today and change your future with a Right Hand Senior Care franchise.