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Expensive Mistakes to Avoid as a New Franchisee

Building a business has many hidden costs. But learning from those who've gone the road before you can be a great money-saving tactic.
October 4, 2007
URL: http://www.entrepreneur.com/article/185012

They say that wisdom comes from experience and experience comes from making mistakes. How true. This article intends to help you gain wisdom from the experience of others rather than having to pay the cost of learning from your own mistakes. These mistakes can represent real dollars--and avoiding them can make a big difference in the total investment you need for your new business and ultimately how profitable the business becomes.

Franchise companies will almost certainly have manuals, training programs and other support documents and services designed to help you avoid making costly mistakes. The challenge is that most new franchisees are trying to learn and execute many new things at once and sometimes make what they feel are logical decisions without remembering or consulting all the advice provided by the franchisor.

It's always a great idea, during your due diligence conversations with existing franchisees in the system, to ask them if they made any expensive mistakes when they were first building or operating their new business. A good form for this question is, "Knowing what you know now, what would you do differently if you got to start all over again in building your business?"

Most existing franchisees will have a number of suggestions based on their personal experience. By looking for common denominators in this feedback, you can determine the areas of greatest opportunity for avoiding common mistakes that cost others money they didn't need to spend.

Some of the most common answers seem to come up all the time and affect the following areas of the business:

These examples represent the most common and expensive areas where new franchisees can make mistakes, but there are always lots of other little things that can be done better. The secret to success is to do your research and then take advantage of the advice you receive from the franchisor and the existing franchisees to avoid making these or other mistakes yourself. Do that and you'll be the exception to the rule when a prospective franchisee calls you in the future to find out what expensive mistakes you made and what you learned from them.