The less-risky way to be your own boss
BEHIND every successful entrepreneur is a drive to be his or her own boss. But for many new entrepreneurs, the challenge of keeping their enterprise afloat can be too much.
Sadly, many first-time ventures fail as the novice entrepreneur has to learn everything through trial and error, while desperately trying to keep the company from running out of money.
If you want to be your own boss but are concerned you do not have enough experience in running a business, franchising may be a viable choice.
With a franchise, you are investing in a proven business system and an established brand, which comes with the support of the franchisor who has been through it all.
The key to being a successful franchisee comes down to one thing: choice. Your success will depend on choosing the right franchise model for you, taking into account your interests and prior experience.
If food is your thing, then there are many F&B options. If you love cars, then an automotive-related franchise will work. If you already have a good network in business, then a B2B model might be your best choice.
So how do you know franchising is for you and what are the advantages of the franchising business model?
First, when you buy a franchise, you are buying a business system that has already been proven to be successful. So you eliminate the risk inherent in building your own company through trial and error.
Less time and cost are required to get the business up and running as you simply take over and execute a business model that works.
As the franchisee, your energy can be focused on growing volume rather than trying to make the business take off.
You will get expert training in how to run your business as franchisors usually provide extensive training and employee support.
Second, through your franchise you acquire the power of a known brand. Consumers are always more comfortable buying items from a familiar name or firm they trust. So having an established brand will save you the trouble of convincing customers to buy from you.
You will also benefit from the marketing power of the franchise. For example, when the franchisor advertises and promotes the brand, your franchise will benefit from the increase in brand exposure.
This removes the need for individual franchisees to invest heavily in developing the brand and reduces the risk of inconsistency across multiple outlets.
Third, you will be kept up to date on the latest developments and changes within your industry, both locally and globally.
If you are thinking of buying a franchise, do your homework. You need to research the industry and the choices available to you. One thing you should always look for is a business where the franchisor is passionate about what he does.
While franchising may seem like a lower-risk option for a first-time entrepreneur, it does not mean that it is effortless.
You will need to learn about and understand a business system inside out. You will need to manage the performance of your individual unit, from ordering goods to ensuring you comply with the franchise's brand standards and government regulations.
You will need to appoint and lead your team, and take responsibility for both good and bad customer service.
In other words, you will need to be your own boss.
The writer is head of operations at the Franchising and Licensing Association (Singapore). This commentary appeared in The Business Times on Tuesday.