Tom’s Franchise Information Blog

You are considering a franchise. Determining what is the best franchise business opportunity for you is no easy task. Usually, when someone thinks of franchising they think of restaurants. That is because of the megalith food franchises like McDonald’s, Subway and Pizza Hut that have become a part of our everyday lives. However, there are thousands of franchises available in every conceivable industry. When deciding which franchise to go with, take into account your background, personality, skill set and investment range. There is a perfect-fit franchise for you. The trick is to find it.

Background

Have you spent your career as a manager or a worker? If you are a “hands on” person, consider an owner-operator service franchise. If you prefer management, consider retail, food service or consulting.

Personality

The key question here is, are you an entrepreneur?

Are you frustrated for someone else?

Are you tired of some else deciding what you are worth?

Are you confident you can take competition head on and do it better?

Are you comfortable with being the boss and making decisions?

Are you willing to work long hard hours for a few years to build equity in your future?

If you answered “Yes” to the above questions, you are a great candidate for entrepreneurship.

Once you have decided business ownership is for you, consider how your personality should affect your business choice

Are you aggressive or laid back?

Are you outgoing or introverted?

Are you analytical or decisive?

There is no “right” personality. The key is to match your personality to your business choice.

Skill Set

Most franchises state “no experience necessary”. That is one of the best reasons to partner with a franchise. They bring a proven successful system, training, coaching and consulting to enable the novice to operate like an expert. However, you should still seek an industry within your general skill set. If you are not very mechanical, don’t look at a handyman franchise. If you are not good with numbers don’t look at a tax service franchise. But, if you are in an industry you are comfortable with, the franchise support team should be able to bring you up to speed.

Investment Range

Everyone wants a McDonald’s, but to qualify you must show a $2 million net worth – and your first outlet can easily cost you $1 million. An alternative might be the newer up and coming burger franchise you can open for under $200,000. If that is still steep for your budget, there are great businesses you can start for under $20,000.

Often, first time entrepreneurs get their startup capital from an SBA loan or a home equity loan. It is best not to strap your young business with too much debt service. A rule of thumb is to keep debt service under 10% of projected revenues. Many first time entrepreneurs roll their 401k into their new business to give them startup capital without debt payments. If done properly there are no taxes or penalties, and the new entrepreneur can draw an immediate salary.

The retirement account can be rebuilt as the new business becomes profitable and builds equity. Anyway you look at it, entrepreneurship is not for the faint of heart, but with courage, creativity and some good common sense, it can be an enjoyable and profitable future.

Ed Wills is a franchise and small business startup consultant with WFA Franchise Consultants. He specializes in helping people identify business opportunities that will help them reach their personal and financial goals. He writes, speaks and coaches on a variety of business and success topics. You can learn more about his services or request a free consultation at http://www.WFAFranchiseConsultants.com.