Jan 15, 2019
Starting a new business can be exhausting, rewarding, and complicated. Many franchisees who invest in a new franchise will realize it can be much harder than they thought. It is important to make strides so that common mistakes can be avoided when you are starting out so that you can grow the best version of your business. There is no way to avoid making any mistake when starting a new business venture but here is some advice when it comes to opening a franchise.
Over-Investing or Under-Investing in a Franchise
This is the most important aspect of buying into a franchise because it will make or break your business. Creating a budget, securing the funding, and spending it in in a logical manner will help you avoid major pitfalls along the way, and it will be the main reason that keeps your business afloat. Putting more money than is needed isn’t going to guarantee success, but neither is pinching every penny. Hire a professional to help you with the books instead of trying to do it yourself. It is very important to have a realistic expectation of growth when first starting out because the higher you aim, the further you might fall. It is practically unavoidable to not make mistakes with money, but rushing into decisions with finances can get you into trouble. Franchises fail all the time, so it is important to be vigilant about your investments.
Buying Without a Lawyer
Franchise lawyers exist and are willing to help you navigate the tricky red tape of starting a franchise. The Franchise Disclosure Document can be extremely confusing, but any contract that has a large financial impact is worth reading. A franchise lawyer will know what red flags to look for before signing it. Making sure that you are following all the laws when starting a franchise unit will also help in the long run. A franchise attorney will not only know what red flags to look for in a contract, but they also exist to protect you and your investments. They want you to succeed, so a good attorney will offer their advice to help you make informed decisions for the direction of your business.
Not Investing in Marketing
This also can be called becoming complacent with the growth of your business. Investing in marketing can be expensive, but almost everyone agrees that it is worth it. Don’t rely on word of mouth to help create buzz for your company. The rush of customers that happen when a new business opens will fade out, so it is necessary to continue advertising when you can. Paying attention to your advertising strategy and what outlets seem to be the most effective will also help you spend your money in the most efficient way possible, instead of trying to invest in everything at once and hope something sticks.
If you are starting a franchise, thinking about starting a franchise or have already opened one, these are some tips that can help you with your business. Everyone will have a different opinion on how to run a small business, but these are some things that everyone can agree on. It is unrealistic to think that you won’t make any mistakes, but you can prepare as much as possible. How you handle those mistakes will determine the outcome of your business. What is most important to remember is to not be too hard on yourself, because trying and failing is better than not trying at all and wondering what could have happened.
Thanks for mentioning that franchise attorneys can help watch for red flags in a contract and can help protect me and my current investments. My husband and I are thinking of purchasing a franchise, but we want to ensure the company we recently started isn’t at risk and that we aren’t overlooking any laws. Hopefully we can find a great franchise lawyer to help us through the process!