Here are 9 questions to ask yourself before you make an investment and take your next step.
For many individuals with entrepreneurial aspirations, the dream, of course, is to own their own business. Purchasing existing businesses for sale represents one way to enter into this arena; these may or may not be existing franchises. Other paths to business ownership are business opportunities and market exclusive licenses. In many cases, this will involve working with a parent company or a home office that offers support, guidance, and guidelines for operating the business once you've taken ownership.
FranchiseRecovery.com has worked with thousands of entrepreneurs, and these are the fundamental questions prospective franchise/business buyers should answer before they take on a new opportunity. If you've found yourself in this position of considering direct business ownership, here are 9 questions you'll want to ask yourself as you travel this path:
1 Is this a business I will enjoy running?You need to find a business that matches your interests and motivates you to do well. You may spend most of your waking hours at your business getting the business set up, so make sure it's something you love doing. If you're a natural born salesperson, a business that involves direct selling — either in a B2B or B2C environment — may be the right fit for your skill set. But, if you love technology, a business concept that centers on tech may be the choice for you.
2 Does the business concept have a stellar reputation?If you are considering buying into a business with parent company, be sure the company is in good standing within the general business community. Would you, as a customer, purchase a product or service from this business?
3 Are other owners within the industry satisfied with the business as a whole?Take some time to speak with owners within the industry. Are they happy with the overall culture of the company? Do they receive the support they need from the parent company? Consider connecting with people who are no longer with the company to get their viewpoints.
4 Do I have a satisfactory location or territory to open the business?Location. Location. Location. It can be one of the most critical business decisions you make in getting started with the business. If you are considering a retail business, what are the traffic counts like? If you are looking at a territory, how many prospects would your territory contain and is that count above or below average?
5 Is the area familiar with this business concept or will I need to build the business from the ground up?If you're considering a well-known, nationally recognized brand like Pizza Hut, you may have less initial leg-work to do, since the name itself and the iconic logo do a great deal of marketing for you. However, if you're thinking of opening up as a start-up business concept, you will need to educate and convince your local community that your goods and services are of the highest quality and value.
6 What is the cost structure for buying into the business?Buying into a business can be expensive. Buying into a successful, well-known franchise can be very expensive. Some require weekly or monthly payments based upon services, while others ask for payments on an annual basis. You need to be prepared to give a portion of your proceeds to the parent company. Just be sure you know how much.
7 Will the parent company provide assistance in business dealings? Will they micromanage my business?Many parent companies will offer their owners opportunity for assistance. At a minimum, do they offer courses to train their owner partners? With this in mind, it's important to understand how heavily the parent company will manage aspects of your business. Do you want a hands-on parent company or do you want to run this as your own business?
8 Are there employee training opportunities?Does the company offer employee training, or must you do it yourself. Many businesses have their own programs that provide necessary and mandated business concept training. However, some do not, and it's left up to the new owner to establish an in-house training program.
9 Will I be satisfied with my work-life balance?Is this a business that will require you to spend every waking moment at the business, or will you be able to separate your working life from your personal life? Ask how other owners are balancing their home life and business.
Proven business concepts take a lot of the guesswork out of starting your own business, but you still need to do your research. Ask the right questions to make sure you'll be satisfied not just professionally, but personally as well. This exercise will empower you on your entrepreneurial path!