At the risk of sounding cliché, no one is perfect. But the good thing about this is, when you get something wrong the first time, you can always learn from your mistakes and get it right on the second (or third or tenth) try. What’s even better is that plenty of people before you have likely done what you were trying to accomplish, which means they have failed sometime, too, but rectified their mistakes. As a result, before you try to do something, you can avoid the mistakes others have made along the way.
This principle applies to starting a business, specifically buying a franchise. The franchising industry is an exciting one, filled with entrepreneurs ready to help you enjoy the same success that they have. It’s your gateway to business ownership, which many people also want, proven by almost 800,000 franchise establishments active in the U.S. And with these many businesses and entrepreneurs who’ve done it before you, there’s no shortage of lessons you can learn from them.
Below, we listed a few examples of first-time franchisee’s mistakes to avoid, according to successful franchisees and franchisors.
1. Starting without business acumen
Plenty of people go into franchising with the hopes of running a business without starting from scratch. And while there’s a proven system to follow, franchising still requires some level of business know-how. If you don’t know how to respond to problems and put out fires, you’re setting yourself up for failure.
2. Choosing a franchise based on profitability instead of your skills
One of the easiest mistakes to make when deciding to buy a franchise is to choose one that’s profitable right now. But not all franchises are the same and one, though more profitable than others, may not fit your personality or your interests. For example, you’ve decided to buy a franchise for hydraulic hose because there’s little competition and you can be the sole supplier for industrial plants. But do you have the technical know-how? Are you willing to learn all the industry’s intricacies? If not, it’s not fit for you.
3. Failing to secure financing
Beyond the upfront costs of buying a franchise, such as the franchise fee and equipment, you have to prepare for miscellaneous costs like marketing and possible net losses. And unless you’re independently wealthy, preparing for these means getting the right type of financing, which will cover the costs of running the franchise for at least the first year.
4. Diverging from the franchise system
Franchises didn’t become the money-making businesses they are without a system that’s proven to work. This means doing everything exactly as it should be, like training the staff a certain way or only spending a certain amount to fix issues. This is because franchise establishments offer consistency, which is the key to building relationships with customers. If you deviate from the norm, customers might not respond well and you won’t have a blueprint to follow on how to fix your mistakes.
Franchising is a fantastic opportunity to be a successful entrepreneur. But for you to achieve that success, recognizing possible pitfalls is crucial so you can avoid stumbling into them.
