Surprising as it may seem, if you have been considering a business of your own, buying a franchise now can make a lot of sense. OK, perhaps if you were planning to buy into an expensive full-service restaurant worth millions and your budget is tight, it would definitely pay you to work through the numbers again, but let’s assume you are looking at something a little more down-market, a business that in a few years can support your family and give you the independence you want.
The biggest hurdle may well be funds as banks have definitely tightened up their lending policies, but even here there is a silver lining. Firstly nobody is going to trust their hard earned money to a fund manager for a while. Also fixed deposits are not going to be interesting for quite a while either, but there are plenty of people around who will be willing to invest in something as tangible as a business run by somebody with a gritty determination to succeed. Also there are quite a few people walking around wondering what to do with their severance package. So just because the financial industry turns out to have been built upon a house of cards, doesn’t mean you won’t be able to get the money you need.
Assuming you need any… There are some inexpensive ways to get into business and while not all of them are franchises, franchising does have some major advantages for the wannabe business owner. Firstly there is the “Branding”. Never underestimate the pulling power of a professional logo and tag-line. Brands that are recognised across the country are trusted far more than the one-off “Bill’s Windscreen Repair” shop that you whizz past everyday on your way to work. Secondly, the fact that there is more than oneof a certain business suggests that there is something successful about it and if there are many of them, then you know that the business does indeed work and the business name already has established a fair amount of credibility. Franchising splits up business functions nicely; the franchisor is responsible for conceiving the business model, product development, branding, marketing and purchasing. The franchisee is responsible for operating successfully in his local community. It really is a win-win situation.
So… back to financing. The present economic climate doesn’t mean you wont be able to find investors but it does mean you ought to be able to negotiate much better leasing arrangements, lower rents, lower payrolls, lower capital equipment costs and now fuel prices are crashing through the floor. Looking for talented people? There are more around now than there have been for many years and you can bet they are hungry for success. Also, try negotiating a better deal with your franchisor. Can they reduce the fees? Can they help with financing?
There have been many businesses which started up during tough economic times. Hewlett Packard, Microsoft and Hyatt are some big ones, Coffee news and Candy Bouquet are some smaller ones, but you get the point. It has been done many times before and it can be done again during this crisis. What about reduced business activity? Don’t worry… services will continue at about the same pace, fast food businesses may see an increase and the remainder may well have a quieter time than they would like, but this is a good time to settle into your new business, iron out the wrinkles and position yourself for when the good times return!