Business advice, entrepreneur, Entrepreneurs, franchise, franchising, franchisor, Funding, Investing, Model, plan, SMEs
With franchise-owned businesses driving a £15bn sector and becoming increasingly popular throughout the UK, investors in the Centros Unico franchise have seen significant success. Katherine Bale, owner of Centros Unico Derby, provides her top tips on investing in a worthwhile franchise.
- Choose your business sector carefully
When considering investing in a franchise, a potential business owner should always look out for business activities that they enjoy. This might be where they have experience or where they have a passion. This interest and passion could sustain a business through difficult times and it will certainly provide a competitive differentiation as it’s always important to enjoy the business you run.
- Select your franchisor carefully
In any business sector there will be many operators and most of them are potential competitors. Their strengths and weaknesses need to be identified, from the perspective of their customers as well as where there are the gaps and if there are service opportunities.
Going alone without a franchise is always a possibility. Franchises typically offer the benefit of lessons learned by others, the benefit of experience and the strengths of strong branding and they charge for those benefits through a variety of ongoing fees and charges. The franchise route offers lower risk but also offers reduced reward. Earnings are likely to be more modest and not reach the heady levels of the more daring solo entrepreneurs.
- Evaluate the different business models on offer
Each franchisor is likely to approach their markets in different ways. They will offer different business models, varying levels of investment and of course rewards. Some franchisors are keen to sell their franchise agreements while others are more interested in evaluating potential business partners. By speaking to existing franchisees of each of your shortlisted businesses, they can be asked the demanding questions about their experience of working with the franchise.
- Develop a very detailed business plan
It is important to collect the mass of information you need to build a detailed business plan. This will become critical in building the credibility to work with the franchisor and a landlord if planning to rent premises and most importantly, to raise any required finance. The plan should be detailed and thorough in order to provide any interested party with all the information they need to understand the business proposal and the plans for it. This task shouldn’t be underestimated – it could and should take weeks’ worth of work.
When searching for funding, the high street banks offer very competitive small business lending rates. A business owner needs to search local small business relationship managers in each of the main banks and work through them. However, they work methodically and very slowly and can take months to make a lending decision.
Local government business support agencies are also good sources of finance, providing European Regional Development Fund backed and government supported lending. They work quickly and are easy to do business with but they typically charge more than twice the rate of interest as the banks.
- Create a great selling process
Whichever business is chosen, the fact that people buy from people they like and trust should never be forgotten. It’s all about relationships and chemistry. People choose to work with people they like and trust as well. The more business owners can personalise their contact with customers, the better.
- Build trust – always be seen to do something for your customers
Franchise owners may never be able to build a trusted relationship with customers if they get the impression that the owners are helping themselves, rather than helping them. Trust takes time to build and can be broken in an instant.
As a result, a lot of time needs to be taken when selecting staff. A business owner needs to get to know applicants well and build some rapport. For customer-facing and sales roles, outgoing and extrovert personalities are needed, these personalities are crucial to your franchise as is previous experience.
- Persevere
Remember, the best plans often go awry. Businesses which adapt to change are likely to thrive the most. Early setbacks in new businesses are common. Businesses take time to become established and even longer to get set on a path to consistent growth. By biding time and expecting the unexpected, surprises will have less impact.
Centros Unico is a franchise leader in high quality advanced and medical aesthetic treatments without the need for deep pockets. It specialises in laser hair removal and a wide range of other facial and body treatments for men and women. For more information about Centros Unico, visit www.centrosunico.co.uk.
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