Head of the Class

Settle down, class. Today we're going to explore how to locate and evaluate a good franchised business. Not all of you will want to hold down a job for your whole working life. Let's have a show of hands: Who's dreamed of owning your own business? OK, that's most of you. Buying a franchise is one way to get there; some even say it's the easiest way. So take notes, ask questions, and for goodness' sake, please stay awake!

Lesson No. 1: Is It in You?

Not everyone who raised his or her hand will be happy as a franchisee. Owning a business is tough work, and most franchises have to be run according to a very detailed, strict set of guidelines. If you're a high-spirited entrepreneur who wants to do it your way without following somebody else's rules, you may want to look for an independent business to start or purchase; owning and running a franchise may frustrate you. So the first thing to do is to know what you want out of a business and whether it will bring you fulfillment. If you like the idea of running a business where you deal with customers at your own counter or provide services to businesses, or if you love sales or have writing skills, then keep these skills and preferences in mind when you start looking through franchise ideas. They'll help you zero in on the right business for you.

Whether the business you get into is a franchise or not, it takes money to make it happen. Make a list of your resources, relatives you can approach to be investors, your savings and your investments. Then go talk to a few bankers. You'll find that some banks will lend you money for a business as part of a federal program where the government promises to pay back most of the money to the bank if your business goes toes up and you default. Banks love this; it lowers their risk when they lend money to new business owners. Ask the bankers about SBA loans-read about the SBA's loan programs, and take a look at a registry program where franchisors and the SBA have teamed up to streamline the application process.

Lesson No. 2: Get Your Feet Wet

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One of the best ways to find out about the types of franchises available to you is to attend one of the franchise and business opportunity shows that appear regularly in most U.S. cities. The big ones can have up to 400 exhibitors. Attending one of these shows is well worth your time. You can kick tires, ask questions, gather brochures and try on ideas.

The Internet is also a tremendous source of information. As students, you're experts at using the Web, so you know that the hype-to-fact ratio will run on the high side. What's that? Well, you're right, that's also true of franchise trade shows, but at least you can talk to real people at a show.

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