No Sales! The Leads Suck! After ten years in the industry I have heard this more than once. In fact, I hear this so often that a series of educational blog posts are needed to educate sellers on how to close more deals - period.
No sales! Now, first I preface this entire post with one thought...
For successful home-based and other small business owners, the next logical step on your road to success may involve franchising your operation or turning it into a business opportunity. But how do you know if you’ve got what it takes? How do you know if your business is ready?
Whether you decide to explore franchising or creating a business opportunity, distributorship, licensee opportunity or some other similar entity, any option you choose expands your business concept and creates a scenario that may greatly enhance your profitability. Furthermore, you’ll be providing like-minded entrepreneurs with the ability to prosper right along with you―also a potentially rewarding endeavor, personally as well as financially.
While franchising and creating a business opportunity are conceptually two different things, the process of evaluating whether or not you and your business are reasonable candidates to take a step in that general direction is the same on many levels. So before you decide to do so, ask yourself these critical questions:
Have I been in business for at least one to three years? If you have a niche product or service that’s truly groundbreaking, it may make more sense to expand sooner rather than later to capitalize on the novelty of it all. Otherwise, two to three years of a proven track record is best. Furthermore, if you’ve enjoyed success in multiple separate locations, that’s all the better.
Can I demonstrate profitability? Individuals who sign on to replicate your business concept in whatever form are interested in making money. It’s your job to illustrate for them the likelihood that they will be profitable and realize a reasonable return on their initial investment.
Can my business model be replicated? If your business is overly reliant on your specific talents or expertise such that it can’t be easily taught in a reasonable timeframe to someone else, expansion may not be your best bet. Also, it’s important to honestly assess whether or not you can identify basic principles and methods of running your business that can be packaged and easily implemented, including the necessary informational and marketing materials?
Is there demand for your product or service that is not geographically specific? If what you’re offering would only do well in the specific area where you are for whatever reason, individuals who may want to replicate what you’ve accomplished elsewhere may have a very hard time, so this might be a deal breaker.
Has your business generated repeat business? If your business has a track record of bringing in returning customers, that’s a good sign that it’s a strong enough concept to warrant expansion of some kind.
Is your business model flexible? Market forces are always changing. The most successful business models can maintain some element of flexibility and adapt to them as necessary.
Are you prepared to support other entrepreneurs who embrace your business concept? Of course, franchising your business oftentimes results in a more involved and ongoing relationship between “corporate” and its franchisees than does offering a business opportunity or other similar set-up. However, both options may require some degree of training, materials development, marketing support, product development/sales or guidance on your part for some period of time, perhaps indefinitely. It’s very important that you think about whether or not you have the wherewithal and resources to provide this level of service to not only your own customers, but your network of franchisees, business opportunity owners, distributors, licensees, etc. Legal documents, manuals, training, marketing materials, lead generation strategies…these are all just some of the many things that your franchise/business opportunity network of entrepreneurs will expect you to guide them on, certainly at start-up and oftentimes well beyond that.
All in all, it’s important to remember that just because you can franchise or expand your business via a business opportunity or other similar concept, that doesn’t mean you necessarily should. Taking your business to the next level is a really big and involved decision, one that you need to think through very carefully.
If after doing your own comprehensive research on this issue you’re still uncertain whether or not expansion of this kind is the next logical step for your business, it might be a good idea to consult a franchise consultant. They specialize in evaluating whether or not your business can serve as a viable prototype for other entrepreneurs and it what form. Furthermore, they are the experts in guiding business owners like you through the process from start to finish.
Given that there are so many companies that do this kind of work, it’s important to find a good and reputable one that gets results. Make sure to ask a lot of questions and obtain referrals before entering into this or any other kind of consulting relationship.
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