More often than not, it is a combination of five key fear factors that frightens people into balking at the notion of a small enterprise or franchise business.
After standing by Cafe2u from its early beginnings as a one-man van operation, I have noticed that many of those who have bought into my franchise had long fought personal demons prior to joining. They were commonly held back by the ‘Big Five’ franchising fear factors: misinformation, unfounded concerns, personal misgivings, fear of failure or the alarmist reactions of family and friends.
Potential franchisees need to confront these fear factors and dispel fear through a considered rationalisation process, along with the acknowledgement that you are buying into a tried and tested business model that is already trading successfully with a proven track record, therefore the risks are substantially lower.
Investing into a franchise can be rewarding and highly profitable, but making the right choice requires a significant amount of careful and structured research to ensure this misinformation never occurs. Understanding the working capital requirements, total investment needed and estimated time required before reaching profitability are all important financial considerations an investor should research before making a decision to purchase a franchise.
A great way to start researching before making the decision to invest in any franchise system is to get a copy of the franchisor’s disclosure document. This document outlines everything you need to know about the company, its history, the costs involved and any competition which you may face
If you start a business on your own, you can only guess at the struggles and obstacles that lie ahead. But if you decide to buy a franchise, instead of going it alone, the problems that entrepreneurs run into have already been dealt with and worked on by the franchisor.
Personal misgivings such as generating business from nothing, grips potential entrepreneurs with fear, understandably. At the early stages, it is only normal for any franchisee to have uncertainties with the new commitment they are about to take on. It’s not just a job, but a life change! Many feel they are not smart enough and won’t be able to handle the pressure of owning a franchise or maybe even fear the act of certain processes they are unfamiliar with, such as cold calling.
There are many factors with buying into a franchise which can take the uncertainty out of getting started. First of all, all you need to do is concentrate on mastering the essential day-to-day elements of the operation. For example, a franchisee is assisted in disciplines such as marketing. You don’t have to become a marketing guru as that support is integrated into the business model for you. A portion of the fees you pay as a franchisee goes towards marketing but comparatively the cost is minor as it is absorbed by multiple contributors. It is an economies-of-scale scenario.
Unfounded concerns are in many cases intrinsically linked to personal misgivings but can transcend your own fears about yourself. Irrespectively, the benefit of a franchise is the support systems. Canvassing for clients by cold calling is not necessarily spawned by personal misgivings but more a fear of the unknown. In this instance we have tackled the primary fear of canvassing for new business by providing the services of a franchisee development manager to work with all our new franchisees in developing new business as soon as they start. You are also joining a team of like-minded individuals. You are learning from a group of previously established franchisees from the same system.
I can’t state enough the importance of asking questions prior to entering into a franchise business venture. Asking questions about everything including marketing strategies, operations, technology, training and ongoing support will help to ensure you are on the right track to creating a successful extension to an already proven franchise system.
Whether you’re investing in a new franchise or established business, your passion for the franchise will be the major drive to your success. You must enjoy the concept and the day-to-day tasks. Make sure you don’t get yourself caught up in fad, but invest into a franchise that’s current and relevant.
Friends and family and fear of failure
The opinions of non-business friends and family are another potential dream killer. My advice is to trust your instincts; they got you this far because your current career compelled you to be here. The support is there in a franchise model, you just need to embrace it.
The best antidote to fear is knowledge. Knowing that you have options and control over your future is empowering. When we feel the fear of failure, we feel anxious and nervous, which causes us to tighten up and suppress positive actions. This is once again usually derived from the fear of the unknown. Your job is your harness and the people around you can get unsettled by change. By having all the background information and pros and cons listed out, this can help to provide confidence within your support system so they don’t become that potential dream killer.
Another important motive when looking into franchising is the knowledge that half a million Australians now work in a franchise industry, which makes up about 14 percent of national GDP. Australia’s franchise sector is one of the fastest growing in the nation, predicted to make up about a quarter of GDP by 2020. But with just five percent of all Australian businesses franchised so far, there’s more than enough room for newcomers to jump on the successful trend.
Franchising in this country is surging ahead. We became more innovative to respond to the demand and to become more proactive in turning enquiries into franchise sales.
Researching the current business market is a key factor into helping you make your franchising decision; however it is just as important to try predicting where the market will be in five, 10 or 20 years time and whether this decision will be a profitable one for the long hall. This franchising decision can be one that stays in your family for some time and is passed on from generation to generation.
In a highly competitive marketplace where similar businesses are selling similar products, it is essential that businesses provide attractive incentives to stand out among the already cluttered market place. For example, Cafe2U offers an acceleration package to help fast track the franchisees three months ahead of schedule. This includes an experienced franchise development manager to launch the business alongside the new franchisee in one’s own exclusive territory. Cafe2U builds a customer run that delivers a minimum of $500 a day before the franchisee operates solo. Over 100 Australians are now running their own successful mobile coffee van business using Cafe2U’s mobile coffee franchise system without the hassles of landlords, staff or rent.
The only way to secure your own destiny is to take things into your hands. When you are the owner of a franchised business your hard work and efforts become visible in your profits. Franchising can not only enrich your lifestyle, but can also be passed down to younger generations.
Your dreams of business franchising should not be tackled with fear and anxiety, but with the upmost of confidence and knowledge. By having the passion and right attitude towards the business and industry, you are certainly placing yourself on the route to success.
–Andy Simpkin is managing director of the Cafe2U franchise.