Opening a business in this economic climate might sound as crazy as selling ice cream during a blizzard, especially when the extended forecast is dark and gloomy. Yet, a ray of sunshine can be found cutting through the recessionary clouds. It really is possible to open a successful business today. The keys are finding a unique product that sells during tough economic times and has little or no competition. Doing homework is essential to ensuring a successful business.
Determine whether to start a business from scratch or buy a franchise. Two things make buying a franchise the prudent choice. First, the marketing and demographic research has been done, the employee manual has been written and the mistakes have been corrected. Second, by obtaining that trained expertise, an owner can get right into making money. It isn’t surprising that people losing their jobs or facing a potential job loss want to control their own destiny. Being their own boss gives them that opportunity — assuming they are responsible, self-motivated and willing to work long hours. A franchise business is a means toward that end. Franchises are proven commodities and 97.5 percent of them work out. That’s the beauty of franchising. You’re starting your own business but with a proven system that works.
Know the Product
Find that unique product that has little competition. You probably wouldn’t want to be opening a Starbucks right now. Many are closing because the market had been saturated with them, and people aren’t buying many $6 cups of coffee these days. Carefully explore whatever business you aim to get into to ensure there is a need. Be smart with your franchise choice. The first thing that validates a franchise is multiple franchises. If you’re looking at a franchise and ask “How many locations do you have?” and the answer is “One, we’re just getting started,” I doubt it’s proven enough. If they have 400 and business is prospering and your area has a demand for that product, it’s a no-brainer. On the flipside, being on the ground-floor of a franchise with a unique product has great upside potential and can prove extremely valuable.
Investigate the Source
In your franchise search, watch out for people who just want to take your money. In economic downturns, many people will attempt to squeeze you for a “legit” business venture that could fizzle. Look at the people that you’re going to be doing business with. Look at their background, what their previous successes were and ask what they’re willing to do for you. The exit strategy is another key concern. Are they going to be in business 10 years or sell multiple units and sell out?
Don’t be afraid to negotiate. If you spend the time to investigate the owners and the market, you could find a really good deal. You could come into a franchise program that would cost you $150,000 and write a check for $75,000 — a great deal, especially in these economic times.
In the end, if you do your homework and make the right choice, you, too, could find sunshine in these cloudy economic times.