Recently a friend called because he’s thinking about buying into a franchise business opportunity. He wanted me to build him a website and help do some research. He wanted me to find out which franchises I thought would be a good fit for him, and equally important, which franchises get a lot of Internet traffic. I know this person well so he knew I’d be able to help him find a franchise business that he would excel in and would be a good natural fit. He also knew that I can help him get the Internet traffic that would give him a competitive edge in his local market.
I did a lot of research and quickly found out the franchise business world can be attractive, yet scary. “Make It BIG Owning Your Own Business” slogans at conventions definitely can get you excited and motivated to go for it! But many first time small business owners choose the wrong business from the start and never ‘make it big,’ or even make it at all.
I don’t want those “make it big” signs to haunt you or anyone’s dreams. I think small businesses are the future of the United States economy and for that reason I wanted to write this article. I wanted to share my findings of the franchising process as it pertains to the Internet, with everyone. Hopefully this article can at least help a few people make a better decision when it comes to buying a franchise business.
The main problem is that there are so many franchises to choose from. Where do you start?
Okay so you’ve worked in the corporate world for 20 years and want to start your own business now. You have $50,000 in the bank to invest, but now what? Which franchise do you choose? Which industry is the best fit? What exactly do you want to sell? Maybe fast food is a good idea? What about a maid service? Or an automotive repair shop?
The list goes on.
If you go to Google and search for franchise business opportunities to find information about franchises you mostly find the same dozen or so lead aggregation websites, all with virtually the same standard content given to them directly from the franchisors.
Quick Definitions Section
Franchise = the right or license granted by a company to an individual or group to market its products or services in a specific territory.
Franchisee = a person or company to whom a franchise is granted.
Franchisor = a person or company that grants a franchise.
Of course every franchise organization claims their franchise business opportunity is the best, or fastest growing or most profitable, which makes it extremely confusing to decide what to choose. So, inevitably, many people end up getting tired of searching around these websites and opt to just fill out the contact (lead) form. Typically these websites only really want to know three things:
- How much do you have to invest?
- When are you planning to invest?
- What industry are you interested in?
The franchisors are pitching their franchise. The lead aggregators are pitching the franchises. Everyone’s pitching, but nobody is asking. They’re not asking enough questions to truly do a good job in helping you decide which would be the best franchise for you.
“How can you help me find the right franchise to buy when all you ask is how much money I have and when am I ready to spend it?” is what I ask. How can you help me find a good business match if you don’t ask me any questions about me? Where’s the intimacy? Most people start with dinner and a movie before asking for the kiss, right? Or is that old fashioned these days? (Lol)
So to make a better decision on which franchise business opportunity to invest in you need to consider at least these three areas.
PERSONALITY TRAITS – Finding the right franchise for you is mostly all about finding out what you like. You have to fall in love with your business and want to be there for the long haul. You can make a tough business profitable if you have enough passion. So the first step is about thinking deep and asking a lot of questions. Consider things like your natural skill sets and talents, past experience and general subject knowledge. Typically we enjoy things we’re good at so make a list or bubble chart of your talents and things you enjoy and do well. This exercise should get you headed in the right direction.
BUSINESS STATS – Getting your business in the black and profitable can be difficult so it’s important to figure out what type of business you’re getting into. It’s about doing research and then making a calculated, educated guesstimate. Because that’s what it is ultimately – a guesstimate. No matter which franchise you decide upon you still have to work hard to make it happen. But you can increase your odds dramatically just by asking a few basic business questions. Consider roughly what your overhead might be, what your profit margin is per sale, what your ceiling is in terms of production capabilities, etc. The focus here is to start with a list of businesses you like from step one above, and then trim down that list to maybe 3 to 5 businesses that meet the criteria in this step, number 2: low overhead, high profit margin, quick turnaround time, etc.
TECHNOLOGY – Even if you know what type of business you would like to start there are still other factors to consider. For example, with the Internet now such a prevalent source of new business leads it’s imperative to consider a business opportunity that will thrive with the Internet as a lead generation source. If someone wants to start a computer repair franchise in an area that is not yet technologically up to speed it might not matter how much marketing you do. If there just aren’t any leads then there just aren’t any leads. There are tools on the Internet, Google has one, where you can search and find what words are searched often in your area to help you find a great business with low overhead and the potential for a lot of leads in your area. With Google’s keyword tool you can also see which words are most competitive as well, helping you to find an industry in your area that has a lot of people searching for services that also has low competition.
So when I realized that all I was finding were lead aggregators I decided to refine my original search to franchise business opportunity news to see if I could find some information from a news portal or maybe even from some of the franchises themselves. I ended up finding one particular website called FranchiseBuzz.com. This website is different than the lead aggregation websites in that there is fresh news every week about various franchises. The weekly articles provide insight into each franchise including market research data, customer experiences and other useful information.
If you’re looking to start your own business, take my advice and do some research. Make sure you cover the 3 key areas: personality traits/experience, business statistics including overhead, profit margin and turnaround time, as well as potential with the Internet as a lead generation source. Make sure you can afford the overhead. Make sure you will be able to get enough new business to support your business. And I would strongly advise that you pick an industry that people search for locally on the Internet, and make sure that you pick the one that has the most traffic while considering the average profit margin per lead conversion and competition on the Internet.
I’m not saying this will make you a success franchise business owner, but it will at least give you a better shot.