Whether you’re a serial entrepreneur or a first-time business owner that’s looking to take that next step, you’re at the right place. As an expert in the industry, FMS Franchise is here to tell you that franchising is a wonderful business model to invest in when it comes to business expansion. Of course, this is when it’s done right. So how do you know when it is the right time to franchise your business? Well, there’s a handful of frameworks that you can utilize as a tool for business evaluation.
Together we will explore these frameworks so that you can make an educated decision as to whether or not it is a good time for you to franchise your business.
How well is your business performing?
The most fundamental factor of any business is sales consistency. This is especially true if you’re looking to grow your business, as there are a number of extra costs involved in expanding. A metric that is vital to keep up with is your return on investment, also known as an ROI. How much money have you been investing back into your business, on average? How much more are you safely able and willing to invest?
How long have you been in business?
According to the Small Business Administration (SBA), 45% of businesses, unfortunately, close their doors within their first five years. As such, it’s important to take caution before proceeding with expanding. A general good rule of thumb to follow is to remain open for two to three years while maintaining a steady ROI.
When was the last time you assessed the nature of your industry?
Before expanding, it’s crucial that you assess your industry. Are you in an industry that’s competitive? What makes you different from your competitors? What areas are your competitors lacking? Are there gaps that you can fill for your target audience’s needs? If so, how are you making an impression on your potential buyers? Can your target audience tell you that you’re different from your branding or marketing campaigns?
With expansion comes new fiscal responsibilities. By asking yourself these questions, you’ll have a better understanding of your competition, where you are, and where you want to go.
What is the benchmark?
The nature of capitalism gives consumers the freedom of competition. If you’re a business owner with a big goal of expanding, then you must be a good student. Do you seek feedback more than you give it? Are your competitors outperforming you? If so, why? Can you take that method and apply it to your business? If so, how? These are the questions that you have to ask yourself on a regular basis in order to grow.
Remember that franchising your business is by no means a get-rich-quick scheme. There’s not a franchise thriving today that was built in a year or two. Franchising your business will take time, patience, and grit.
Think you’re ready? Contact us today.