With hundreds of franchise business opportunities to choose from it can be a daunting task to find the right one, retail, service based, business to buisness and each has so many options avaiable, and to top it off the costs involved can make the choice easier (less options available) but harder (cheaper does not mean quality will follow).

If you have not been in business before find resources on getting started in business (Business forums, glossaries of business terms and books) and familiarise yourself with some of the terminology used, so that when you get into the research you can have a better understanding of what they are talking about and how it might effect you. It can be confusing to try and get your head around terminology you do not understand when a sales person is doing their level bet to sell you something.

Here are some tips for making a selection, remember this is not specific advice, but a starting point on the road to your education on franchises and their ability to provide what you need. Best of luck with your decision!

1. Competition and demand for the product - This is basic but can be overlooked, just becuase a franchise has developed a business system does not mean people in your area will want to buy. Ask about and do your own research on the competition in your area, (just because there may be none at the moment does not mean there has not been some in the past which may have learnt the hard way that the locals do not buy that service or product.) - Is the cost to the consumer feasilble? - Is the concept one that your community (or territory) finds okay and wants to utilise? - Is the brand brilliant? - Is there going to be sustainable demand for the product so you can be readily rewarded for your efforts?

2. Profitability and costs - This is what business is all about, you are not creating a charity, so you need to know how profitable the business is, or is going to be (and how long that will take!) Ask if the profit they might quote to you is after wages (your own included…) too many people find the costs too hard to handle and the profitability is not there despite many hours of hard work and determination.

3. Ease of operation - Does the company provide a simple business plan? - Simple operational systems? - Do other franchisees follow it? - Does it work ALWAYS? - How does Head Office respond to requests for assistance in this area? Now ask yourself this, if I am going to buy a busness is it going to be easy to run or a pain? I know what I would want! I also know that in time I would want it to be able to run itself so I can enjoy the passive income it can provide.

4. Support - Like anything a business can “fall over” with out the right foundation and support. You will need support from the company’s head office, your family and friends. This can include moral support when things get challenging (and they will!) Training, meetings to assess the group performance (Franchise meetings), one on one support from a company “area manager” or similar. Now ask yourself, am I able to listen to this information and put it into practice? Will I be able to work with them? All of this adds up to ensuring your business success.

5. Costs - There will be the start up fee, ongoing franchise fees and of course your overheads (the costs involved in running a business.) This is probably a good time to involve your accountant or even a bookkeeper, to work out some of the costs involved in running the type of business you are thinking of. For many people they go from being employed to running a business, they see the money come in and then (almost mysteriously) go out again! It can take a while to understand what’s taking place and how to handle it, for some what’s left after the expenses is not enough to live on. Understand the costs involved and even project what level of work is required to meet the costs so you know what sort of effort you need to put in to make the business thrive, not just survive.

6. Me! - Can you do it? - Do you have the skills required? - Can you learn the skills? - Do you have the right attitude? For many the answers will be yes, yes, YES! But in reality often this is due to the emotional excitement of the thought of running the business, not based on reality. Ask lots of questions of family and close friends. Chat to the company about how they go about assessing prospective candidates (their process should be vigorous!) Then ask yourself am I really up to this?

7. Research - Do lots of research, chat to many of the existing franchisees, and ask them all the same questions so you can really gauge how things are from the other side of the business. Get yourself into the business and offer to work with one or a few of the operators for a few days, pick their brains to save you a lot of stress later on. Find out what sort of hours are they putting in to the business to make it work, and watch out for two partners working and taking out one wage, it can look very productive, but in reality its two people earning half as much. When chatting to other franchisees, ask them about the franchise support meetings and the value directly to them, this an give a good window into the inside of the business. Also ask how many franchise owners currently make a passive income out of the business?

Thats the list. If you get into any business I wish you all the best, and franchising should offer you a great deal more than just trying to fly by the seat of your pants in your own start up phase, but you need to find out exactly what that is and how it will work for you, or not.

Stumble it!