Entrepreneurs to select ventures according to the need which includes potential, emerging and unsatisfied needs of the society
Right Business, Whether the business idea is original, borrowed, or bought, it is essential for start-up entrepreneurs to select the ventures according to the need which includes potential, emerging, unsatisfied and unsolved needs of the society.
There should also be a clear evaluation whether the idea is a real opportunity that can be transformed into a profitable business and it should fit the under-mentioned.
Sometimes, the business looks very lucrative, buton occasion it may not be right for you. Howwell does the fran chise work for the lifestyle you want, and with what you want to achieve person-ally?
Determine if the franchise is a good fit that will help you meet your personal goals.
If you have an advanced degree in IT, do you really want to sell clothes? Well, as a franchisee, it can bed one and with good success as many franchising stories speak of.
Largely, made possible the franchisee puts in that extra effort because he is operating in unfamiliar territory.
However, it would still be right to find a franchise business that you are pas sionate about and ideally have a background in the industry to give you ahead start because you are investing your hard earned money and for along time.
As a franchise business owner, one gets the rights to use a franchisor’s business system, trademark and “know-how“ for years, depending on the term of the franchise and any renewal rights contained in the franchise agreement. Before buying in to a franchise system, it is wise and insightful to speak with existing franchisees in the system and do your research regarding the franchisor, business, return on investment, etc.
To get started in franchise business: you should have enough funds to pay the initial capital investment and franchise fee and maybe 6-7months of working capital to see through royalty fees, inventory buys, etc. If you don’t have enough funds or are not even getting any support from family or friends, you can get loans from banks where franchisors can also become guarantors. There are also other business models like minimum guarantee, where franchisor keenly monitors the sales progress of the franchisee and accordingly, offers the minimum guarantee help. Minimum guarantee works as insurance for a franchisee to make his franchise business run efficiently. Another option is revenue sharing model. The franchisor and franchisees share the revenues generated by the business. Another financial aid is through a management contract. This is a business form wherein maximum investment is made by the franchisor and the management is taken care of by the franchisees. Whatever business you choose, always ensure the capital you bring to the business is more then what is required in the business in the initial six months atleast.
Always make sure, that you ensure that the expected returns on the business are aligned with your expectations and also the risk involved. Today, most professionals would want business opportunities where they can justify both the irreturn on time and return on investment.Most pro-fessionals today want a business that gives them capacity to grow quickly and also know how to raise sophisticated capital for it.