Grow Your Business, Not Your Inbox
Resources from the world of franchising can help entrepreneurs brainstorm for new business opportunities-even if franchising itself doesn't appeal. Here's how to sample the abundance of ideas.
Question: I'm looking for a business opportunity. I have the desire and the capital, but I keep coming up dry when it comes to ideas to pursue. Are there useful techniques or tools I can use to develop one?
-- Jim, New York
Jim: You are in a perfect position to educate yourself. It doesn't sound as though you are laboring under time or financial pressure. You can dream a bit.
A perfect first stop as you contemplate your future is the franchising universe. Even if you decide not to buy a franchise, educating yourself about those opportunities will influence your final decision and make it better informed.
"Quite often I get these kinds of calls from people," says William F. Repack of the consulting firm Franchise Specialists Inc., and professor of entrepreneurship at Robert Morris College in Pittsburgh. "We often try to slow up the process. It doesn't do anyone any good if you buy something and go out of business."
Franchising opportunities have never been so abundant. Narrowing the field can be daunting. Dr. Repack and other consultants say that too many first-time franchise buyers get hung up on the question, "How much money can I make here?"
A better first question at the start of a search, if painfully obvious, is to ask yourself: What do you like to do? What sparks your imagination and engages you? How do you see yourself spending your time at work? Are you cloistered in a quiet office dreaming up new products? Or are you dealing with customers, making sales calls? Does it intrigue you to think about growing a business, expanding location by location, conquering new markets? Or do you envision a smaller-scale, less complicated enterprise? Do you like to manage people, or does it give you a headache just to read those words?
Also, is there a particular industry where your experience will serve you well? A former educator might be interested in a tutoring franchise, for instance. Dr. Repack suggests that if you are thinking of retail or food service, you spend a day or two wandering at a big local mall to see what stores and products entice you.
There are dozens of Web sites that deal with franchising. You might want to start with the International Franchise Association. It has an amazingly long list of franchises in hundreds of industries. (Pressure washing? Early employee screening? Tools and hardware? Hotels? Janitors?)
Check out the U.S. Small Business Administration's viewson the topic. (It also has a "Is franchising right for me?" test--one of many similar tools on the Web.)
Franchising consultants abound, too. Do a Google search. Their Web sites have much useful information even if you never engage them. They can ease the process if you don't feel confident dealing with a franchiser.
Many franchise consultants have written books. Spend an afternoon browsing at your local bookstore, reading reviews on Amazon.com, or check out a few at the library. There are also magazines that explore franchising opportunities. Spend a few hours with those. Dr. Repack likes the Franchise Handbook, a quarterly magazine with articles on getting started and long listings of opportunities.
Once you've narrowed the industry, or region or the amount of money you'd expect to commit, request offering circulars from the various franchisers and pore through them. How much of your capital is required? How well capitalized is the franchiser--can it carry out its plans? Will the franchiser assist you in finding a suitable location?
Once you narrow it down, and are dealing with the franchiser, you must commit time to talk to current franchisees. This step is absolutely key. A reputable franchiser will provide lists of its franchisee partners. What do they know now that they wished they'd known before? How are the inevitable conflicts resolved? If the franchisee will disclose earnings--rarely included on the offering circular--all the better.
And of course, some people aren't meant to be franchisees. Dr. Repack describes the perfect franchisee as "patient and hard-working." If you are a true entrepreneur--just dying to execute your own vision and too impatient to work for someone else--you'd best keep exploring. But you may have sharpened some of your ideas along the way by looking at the franchise world.
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