Buying a Franchise, Choosing the Right Franchise

Choosing a Franchise Business Opportunity: Love or Money?

In his book Street Smarts: An All-Purpose Tool Kit for Entreprenuers, Norm Brodsky said people ask the wrong questions when they’re comparing business opportunities:

I’m constantly hearing from people who have ten different business ideas they’re considering at the same time. They want to know which one I think is the most promising. I tell them, ‘You’re asking the wrong question. You should be asking, ‘What business do I want to be in? Which one do I like most? Which one fits in best with what I want to do with my life?’

On the other hand, no investor wants to put time and money into a business that isn’t a viable opportunity. When you decide to put your time and money into a franchise business opportunity, you’re making an investment. You want to be sure it will pay off.

A franchise business opportunity gives you a big advantage here. You know that the idea appeals to people and that the systems work. People with a hobby or a passion for some idea often start businesses that are really just extensions of that hobby. They love what they do and they hope that other people will also love it — but they may not have any idea how to make that passion into a viable business.

A franchise is, by definition, a viable business. It involves a business model that has worked for other people for quite a while, and which is still working. It uses systems that have already been through the trial-and-error process. The business works.

Just by making the decision to choose a franchise business, you are eliminating a lot of the things that cause people who follow their bliss to lose their shirts.

Still, the balance between love and money can make it hard to choose. Here are some factors to consider:

  • In any investment, the payoff is related to the risk and to the size of the investment. Look at your potential payoff in relation to the amount of your investment in both time and money. Choosing a home-based dog grooming business because you love dogs and want to work part-time from home while you spend time with your kid (or your own dogs) is probably going to be less lucrative than choosing a multi-unit investment in a national restaurant franchise, hiring great managers, and putting in 50 or 60 hours a week. That doesn’t make one choice better than the other, but it does make them different.
  • Talk with other franchisees in the businesses you’re considering and ask pointed questions about the things that matter to you. If you care most about the income, don’t focus all your questions on how they feel about their work day. On the other hand, if you naturally find yourself asking mostly about their work day, you might not be as completely focused on the income as you think you are. Either way, the chance to talk with franchisees is a huge benefit of choosing a franchise business opportunity, so take advantage of it.
  • Know yourself. Brodsky went on to point out that making your business successful will involve a lot of time and dedication. If you don’t enjoy it and believe in it, you will find it hard to make that commitment and to stay with it during the hard times. That doesn’t mean you have to be passionate about the product or service you’re offering. Brodsky stores file boxes, which is probably not something he’d do for pleasure. You may be passionate about providing for your family, excited about being a leader in the local business community, or dedicated to helping people.

Does it really have to be a choice between love and money? Not necessarily. Be aware of both factors and you can balance them.

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