[ad_1]
Opinions expressed by Entrepreneur contributors are their very own.
Up to date on Dec 19, 2023. Initially printed on Jun 15, 2016.
As a franchise coach, it is my job to assist individuals discover the right franchise match for his or her wants, and to assist them efficiently navigate all the franchise shopping for and possession course of. Over time, I’ve seen all of it—the great successes in addition to the horrible mistakes. As a coach, it is my job to offer individuals high quality recommendation primarily based on my expertise and their ability set, however I can’t pressure them to comply with it. Beneath are a few of the most common mistakes I see as a franchise coach, and how one can keep away from them when exploring franchise alternatives.
Associated: 8 Common Mistakes You Might Be Making as a Leader (and How to Fix Them)
1. Selecting the flawed franchise for you
The franchise you select must truly fit you so as so that you can succeed as a franchisee. Your expertise, life-style and placement preferences, monetary scenario and character are all issues it’s essential to think about earlier than shopping for a franchise. For example, if you may be depressing in a location with chilly climate, do not buy a franchise up north. Or if the enterprise mannequin requires you to work nights and weekends, however you are seeking to spend extra time with your family, that is most likely a nasty match. Realizing your self is not at all times so simple as that, however the higher the franchise fit, the extra comfy—and profitable—you may be working your corporation.
2. Unwilling to decide to due diligence
Some individuals do not love to do the due diligence. They belief their instincts to make choices for them. Whereas trusting your intestine might sound romantic to some, it isn’t a trait of profitable enterprise house owners. The important thing to being a profitable enterprise proprietor lies in making informed decisions backed by analysis and laborious work, not blindly following a “good feeling.” If you wish to see success, you have to do your due diligence.
Associated: Why Adaptive Leadership Is the Key to Success During Market Volatility and Times of Uncertainty
3. Falling in love
Some individuals are inclined to fall in love with an concept or an idea—then they do the due diligence that solely helps their preconceived concepts. They’re blinded by their bias and their analysis finally ends up being one-sided as a substitute of thorough and full. I as soon as labored with a person who was in love with the idea of photo voltaic and LED. It did not matter to him if the business model made sense. He was going to get into this space of enterprise regardless. Thus, he solely wished to see the information that will support his desire to enter this trade, with out ever investigating the potential pitfalls. Once more, this isn’t a trait of profitable enterprise house owners.
4. Not constructing a stable P&L
It’s vitally vital to know the P&L—profit and loss—associated to any enterprise you might be considering shopping for. You can not shortcut this course of. Do your analysis, speak with current and former franchisees, and perceive the actual revenue and expense classes earlier than shopping for your corporation. It’s good to know the financials earlier than moving into the enterprise, in addition to the price it would take to realize the break-even level and generate optimistic money circulation. In truth, this subject is so vital we devoted all of chapter 12 to this in The Educated Franchisee. As soon as this and your personal monetary assets, you reduce the chance of economic hardship.
Associated: How to Estimate Benchmarks and Optimize Your Franchise’s Marketing Performance
5. Having unrealistic expectations
Some of us suppose the franchisor will do it all for them—that by some means a franchise is a silver bullet the place you possibly can work much less and make extra with no danger. In actuality, the primary yr in any business is hard, franchise or not. If you purchase a franchise, it’s nearly assured that you’ll work tougher and make much less throughout that first yr. The franchisor will do what they will that can assist you however, in the long run, it’s about you. You’re accountable for build up your corporation to turn out to be worthwhile. You’re liable for your own success.
All profitable enterprise house owners study from their errors, however the perfect at all times do their due diligence and keep away from many doubtlessly catastrophic errors within the first place. Which type will you be?
[ad_2]
Source link
