Home-based franchises as well as getting behind a large, well-established franchise name and opportunity while different, are in many ways the same. For example, if you take into consideration the value, purpose, and requirements for effectively marketing your product as an Avon representative, you may very well find many similarities in the expectations, networking resources and development, business to business sales, and profits v. loss concepts.
Whether you are just starting up your business, have an at-home car-detailing or washing business, or are in the process of getting yourself a brand-name for the services you provide while being a traveling salesman, you must answer to the economy and realities of your business.
Below are five mistakes franchises make and how to avoid them.
1. Underestimating the Value of Understanding and Monitoring the Current Economy
While this goes hand in hand with conceptualizing supply vs. demand, keeping a close eye on economic changes can make all the difference between making and breaking your business.
2. Not Considering Overheads
If you’re considering a large-corporation franchise opportunity, keep in mind the necessary overheads to even carry the brand-name, let alone stock their products. Also, monthly payment of profits to the primary corporate-holder of your franchise can be costly, and sometimes outweigh the benefits of being a franchisee.
3. Not Having an Emergency Fund
It’s vital to have an emergency-savings fund for the stability of yourself and your family, and as a “business backup” fund, as you never really know how the beginning of your franchising experience and profits will go. Also, you can’t possibly know the seasonal profits and experiences personally without taking the leap first. This includes individuals attempting to create a business, perhaps one day owning a franchise of their own, or sustaining an online business.
4. Not Being Aware of Government Protection, Rights, and Requirements
These are three very important terms to keep in mind. Firstly, government protection and monitoring of business deals gone sour with your franchise corporate administration is often abysmal at best – due to an understaffing of necessary personnel, such as investigators and intervention specialists. It would behoove you, whether developing a home business, enterprise, or franchise both online or off, to seek and if possible get a licensed, experienced (franchisee) attorney on retainer for any future challenges. This will give you and your business the protection you deserve. After all, your hard-work could easily go to waste and leave you penniless if you encounter an unwanted legal situation that could have been avoided.
5. Trusting Business Coaches and Franchise Leaders Wholeheartedly
It’s a good idea to take “business coaches” or franchise-sponsored “leaders” with a grain of salt. Remember, if it seems too good to be true, it likely is. You are your best professional and employee in more ways than one, so put that money aside for something more vital, like emergency business savings.
In order to maximize your franchising attempt and success, it’s important to consider not only education, but also spending direct time “in the field” of your area of interest. This will allow you to learn the ropes, expectations, and probability of profitability in the long-run as a franchisee – and employee yourself.
Lastly, and many home franchises and corporate franchisees take this for granted, but consider what failure might look like, why and how others have failed, and what steps you can take to minimize the likelihood of you and your business going down the dreaded road of bankruptcy.