Tweet

Franchising Provides a Safety Net for Entrepreneurs

Guest post by: John Henning

Article Overview: If you were trying an aerial trapeze stunt for the first time, would you do it without a net and safety harness? Probably not because chances are very good that you would fall. The same holds true for business ownership. If you’ve never been your own boss, doing it alone could be difficult, scary, and full of the unknown. Statistics from the Small Business Administration show that one third of all new businesses do not survive their first two years. What is often missing from those failed businesses is a safety net – which is the very thing provided by franchising.

Franchising Provides a Safety Net for Entrepreneurs

If you were trying an aerial trapeze stunt for the first time, would you do it without a net and safety harness? Probably not because chances are very good that you would fall. The same holds true for business ownership. If you've never been your own boss, doing it alone could be difficult, scary, and full of the unknown. Statistics from the Small Business Administration show that one third of all new businesses do not survive their first two years. What is often missing from those failed businesses is a safety net - which is the very thing provided by franchising.

Just how does a company become a franchise? Here are the steps most franchisors go through before you even hear of the company.

- Franchising comes after a start-up business experiences success. They've learned what works and what doesn't, made adjustments, tried a variety of strategies, tested and re-tested. Finally they have documented results and a system in place and want to grow. This is when they open a few franchises and retest every assumption.

- More adjustments are made and a few more franchises are awarded and opened, usually in a small number of test areas.

- With data coming from a variety of sources, the business can determine what type of marketing works and in what areas. Are customer expectations being met? Word of mouth will make or break any business concept.

- Franchisees in this new system are also sharing information with each other. Are they happy? Is the corporate office supporting them? Franchisee input is an invaluable resource. They've invested their own money, time and talent into the business and want their share of the pie.

- Once everything is working well, major expansion of the franchise concept begins. A good franchisor will offer continuing support and training to franchisees, putting as much time into keeping the business on track as they do into growing it. Due diligence - asking the existing franchisees about the company - is of premier importance to those considering investment.

This is the safety net a franchise provides: a tried and proven concept with operations, marking, distribution, accounting, technical support, brand, etc. all in place, tested, retested and ready for a sharp, hard working entrepreneur to join the team.

Growing a business through franchising obviously works. International Franchise Association President Matthew Shay says that the impact of franchise businesses on the U.S. economy was recently determined to exceed $1.5 trillion which is nearly 10 percent of the nation's private-sector economy and the source of jobs for more than 18 million Americans.

There are other advantages of franchise ownership beyond having all the systems set up for you. Most franchise businesses will allow someone with little experience in a particular arena to learn new skills, and to build a thriving business using the system provided by the franchise company.

For example, say you've had 20 years of corporate life working in human resources. You see your future as a dead end and would like to spend the next 20 years building a business that would create wealth for you and your family, instead of someone else.

Maybe your real passions are raising Jack Russell terriers, auto racing and landscaping, but you haven't much experience in these areas. There's no need to delay your new career years while you learn new skills.

Everything you'd like to know - from dog training to auto detailing to planning sprinkler systems - can be learned from a franchisor. A good franchisor will have detailed training and ongoing support, including manuals, conferences, web info and a dedicated corporate staff to help you with every aspect of your business.

Here are more examples of how joining a franchise system may be better for you than starting a business on your own:

Say you want to change careers but don't have the cash to keep afloat for many months while waiting for your business to break even and start putting the jingle in your pocket.

- There are many franchise businesses available which are structured for a quick ramp up, break even, and cash flow. If you can follow the system, you definitely increase the chances that you can be successful.

You love the idea of being in business for yourself but don't want to manage a team of employees.

- Not all franchises have drive up windows. There are many great concepts, including businesses you may never have thought about, you could run yourself or with a small staff. Franchisor support and networking with other franchisees allows you to be in business by yourself, for yourself, without going it alone.

Perhaps you'd really like to make a difference in your community but don't know how to make a living and still make a valuable contribution.

- There are franchises that let you bring art or computer training to children - subjects that are being cut in many school districts. Senior care concepts are also a hot category right now, right up there with health and fitness. With help from a strong franchise system, you can let loose your altruistic self while still taking care of your family.

With over 2,500 franchise concepts in the US today, there's never been a better time or a better place to follow your dream of business ownership. Franchising, truly, could be the secret to your success!

Related Articles
  Franchising Is a Better Path to Success than Opening a StandAlone Business
  I Want to Take My Business to the Next Level
  Franchising Overview
  Fearing Franchise Losses
  Franchisee Profile Who should and should not buy a franchise
  SME's - a solution for Africa
  The Top 7 reasons why Franchising is Better than a Brand New Business
  Franchising can change the world
  Franchise Businesses Appeal to Women Entrepreneurs
  SMEs the difference between entrepreneurs and franchisees
  How to Franchise Your Business Successfully - Managing Franchisees
  Newsworthy Trends in Franchising
  Franchising Continues To be a Safe Way to Go in Troubled Economy
  Franchise Your Business, What does it Mean?
  Franchising, Getting out of the "Putting out Fires Business"
  Franchising: Where to Start
  What is franchising? My personal definition!
  Should I Franchise My Business
  Franchising vs. Licensing
  Choosing the Right Franchise Industry

Article Tags: franchising a business, how to franchise, how to franchise a business



Related Forum Posts
Re: Hello EvanCarmichaelers, and Thanks! - "Carmichaelers" ..nice.. Over at the Young Entrepreneurs I'm going to start calling my readers "DSilvelers" - I like the sound of that! Welcome on board theFranchiseMarket. Do you run a Franchise Business or are involved in Franchising in anyway?
Re: Any ideas for potential partner sites? - Hi Beat, Interesting suggestion. But at the moment, we're looking more for "partner sites" which correspond to each forum category. For example: Is there a site we could partner with for the "Young Entrepreneurs" section? How about one for the "Franchising Section"? etc...
Funnies - Hi There, Here are some bad headlines: Red Tape Holds Up New Bridge Eye Drops Off Shelf Hospitals Are Sued By 7 Foot Doctors Inclued Your Children When Baking Cookies Safety Experts Say School Bus Passengers Should Be Belted Kindest regards Beat
Re: Re Franchise etc - [quote="bmueller47":e0j0nu4t]Can you see a shift of various types of franchises? What I am thinking about is that today it is more difficult to create franchises, that has great appeal. More and more people want to have their business, but no interference of someone else.[/quote:e0j0nu4t] Not sure what you mean exactly but it is certain that more and more people want to have their own business but not more and more people know what they really want to do, or how to do it. And that's what franchising is all about. Franchising is not for an entrepreneur. An entrepreneur will do his own thing. People who buy franchises want a turn key business, with a proven model. Franchising in the US had never been that good. I don't have the exact numbers in mind but I know for sure that franchising is growing more and more as people are getting more and more aware of this business model.
Franchising vs. Licensing? - What is your opinion on Franchising vs. Licensing? Which is better?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Secrets of Successful Business Partnering

Are You Fulfilled

Selling What Sizzles vs. Delivering Real Value

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.