Starting your own business is an extremely ambitious and commendable idea, but not everyone's got the patience and internal fortitude to build a startup empire from ground up. Franchising is a great alternative to launching a startup for many entrepreneurs. But what is franchising? Franchising is using an established business's name, brand, and marketing model as your own. There's a business buffet of over 2500 franchise alternatives to choose from, but of course when choosing one, it's important to haver some form of pasion or real interest other than making fast money.
Despite the fact that it requires more initial out of pocket cash, franchising takes less work to get started. There's less mental burden compared to launching a startup. The franchiser already provide business tools, a marketing strategy, and a recognized brand name prepared for you. Attracting initial sales and customers get off to a much easier start. In essence a franchiser hands you everything you need to run a business on the heels of their good name while taking care of the marketing and promotion.
It's important to know that growth and innovations in small business are the driving force of the US economy, but what significant economic role does franchising play? A huge one according to a recent 2010. Franchises contributed over $1.5 trillion to the growth of the US economy, which is about 10 percent of the private-sector economy. Quite boring information but unemployed people and job seekers won't snooze to this. It's welcome news, because when franchises grow, this means more available jobs for them.
How to become a franchise
Before a company even think about franchising itself throughout a target market, it should deploy a marketing strategy, test it on a local audience, then make a decision regarding branching out as it progress through the following levels.
- There has to be proven growth. The business should have experienced a consistent trend of customer satisfaction and cash flow from quarter to quarter for a few years or more.
- They should have tested their marketing strategy over and over to make sure it creates the same results each time within it's niche market. The best way to gauge the success of your marketing strategy is by measuring profit and revenue growth, but you can also observe customer interest and satisfaction to find out if word of mouth is building.
- Once the business owners are confident they have a working formula for success, they expand the business by opening more branches in neighboring markets. Fast food chains and gas stations are two popular examples of this.
- The resulting franchises want to know their investments were worthwhile so they'll talk one another to get an idea whether staying in is a good decision.
- Once all signs point to overwhelming acceptance in the target market, corporate officers begin a bigger scale expansion into more regions..
Specifically who should consider buying a franchise
People who decide to buy a franchise varies based on personal goals and financial situations. Some are tired of corporate life or working directly for someone else. They see franchising as a way to independently succeed at being their own boss. What's great is that even with litle experience in running a business, someone with the right drive and determination can become a successful franchise owner. Most franchisers will provide resources and training to aid the beginner in running their business. It's a kind of just add water method that works in most cases. The business is there, and the potential owner can be dropped right in to run the business with the same training used for already establishes expansions of the franchise.