No matter what we’re buying, we all like to have choices. For example, when you are thinking of getting a new vehicle, you probably don’t check out one model and just go for it. You would like to ensure that you are purchasing a car, SUV, or truck that fits your needs, lifestyle, and budget. It’s good to have choices, isn’t it?
If you are looking to change the television in your living room, we are sure you won’t just look at one TV and decide that’s it. You will want to check out many televisions of different sizes before making your pick. You will want to make sure you get the best-quality television within your budget. Again, it’s nice to have choices, isn’t it?
The same thing applies when it comes to purchasing a franchise (which is a bigger investment than a car or TV). There are plenty of franchise opportunities out there to select from. The key is to find one that you can personally afford and are likely to run successfully as a franchise owner.
Bearing this in mind, below are 3 tips that will help you choose the right franchise opportunity for you:
Tip # 1. Find out the demand for the franchisor’s products or services
Before choosing a franchise to invest in, it’s important to determine the demand for the franchisor’s products or services in your local market. Why? Because something you believe will be a hit may not be if there is no demand for it there. Also, you need to take time to determine how sustainable the products or services will be in the long term.
You have to ask yourself this question: “Is it possible for this franchisor’s current products or services to go out of favor anytime soon?
Here, “out of favor” refers to something that could currently be a fad. Something that is very popular and highly demanded right now but might not be in the next few years.
Here are three ways to find out:
(i) Ask the franchise rep for information
(ii) Talk to franchise owners to know if their products or services are in high demand. Ask them if they are worried about their offerings going out of style in the next few years.
(iii) Take a look at Google Trends. The website can let you know how popular anything you are searching for is. The results you get show the number of people that are typing a search term into Google.
When you get to the Google Trends site, just type the names of the products or services into the search. You can select different timeframes to find out if their numbers of searches are increasing or decreasing over time.
However, you need to know that Google Trends is not the one-stop tool for competitive market research. But you may want to check it out since Google is usually the first place that people visit for information.
Tip # 2. Evaluate the competition of the franchisor’s products or services
As a prospective franchisee, it’s important to learn everything you can about the business scene in your local area. And a good way to achieve this is to take a drive around your neighborhood. Ask yourself: How many direct competitors do I see in my area? Are the majority of them solo businesses or franchise businesses? Are the businesses busy?
You can also go to the local Small Business Development Office (SBDC) close to your area. They will have loads of data regarding things such as competition, demographics, prices of commercial real estate, and other information that can help you determine the business climate in the area.
The great news is that you will have to pay nothing to get this important information from your local SBDC since they are partly funded by the US congress via a partnership with the United States Small Business Administration (SBA).
Check this link to discover a Small Business Development Center close to you
Tip # 3. Look for a franchise opportunity that will enable you to put in your best
To put it in another way, search for a franchise opportunity that will allow you to take advantage of your top skills. For instance, if you have experience in operations, go for franchises that require owners to have strong management skills to succeed, i.e., a restaurant franchise.
People who succeed with restaurant franchises are those who:
- Constantly track their expenses
- Effectively manage their payroll costs
- Monitor their marking expenses and return on investment (ROI)
You can see that it comes down to operations
In contrast, avoid buying into a franchise model that requires skills you might never have. For example, if you don’t possess good sales skills, it would be unwise to consider a business-to-business franchise.
We are sure that the above tips will help you cut down your franchise options, so you can select a franchise that is suitable for you.
