Business world
Making the decision to start your own business can be a daunting and challenging move, David Banfield advises on making that transition
The world of entrepreneurship is a far cry from the world of employment. Employment, for the main part, comes with considerable built-in support systems and a reporting hierarchy.
For those who dream of running their own business, statistics indicate that of all the business start-ups that take place the majority are destined to fail, sometimes as many as 40 per cent in the first year of business. The savvy would-be entrepreneur may come to the conclusion that their experience and background might not be well suited to a business start-up after all. The solution for many people determined to make it on their own and enter the world of self employment is the area of franchising.
Franchising continues to be a strong and fast growing sector of the economy. What many people fail to realise about franchising is that it touches nearly everyone’s life on a daily basis; there is virtually no service that is not, in one form or another, a franchise. The next question might be – are franchises immune from failure?
Naturally the answer is no, but the facts do point to a very low attrition rate, with maybe only a total of 10 per cent leaving a franchise system over a 10-year period. If a franchised business is the appropriate course to take, is it just a case of selecting the right ‘brand’ and signing on the dotted line?
Firstly, it is important for the individual to be well suited to the brand. Talking to existing franchisees in the prospective organisation is a must, as is researching the franchisor and its history.
As many corporate executives will be coming away from structures and disciplined organisation, it is imperative that they find a franchise company that brings that same support level to their franchisees.
In talking to many people in the franchise world, ask ‘what should I look for in a franchise’? The answer has to be, once you have settled on an industry and business model, find a franchisor that can demonstrate that they will be there with you to make your business grow and become successful. After all, your success in a franchise environment also reflects the franchisor’s success.
The success factor for a traditional bricks and mortar type franchise was often quoted as location, location, location; I think that may well have been surpassed for both service and bricks and mortar establishments into support, support, support.
David Banfield is President of The Interface Financial Group (IFG), which is an alternative funding source for small businesses.
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