10 Common Mistakes Made by Prospective Franchisees

by Roni Deutch Tax Center

Opening up a franchised business is an exciting and momentous time for a new business owner. But with all the excitement, prospective franchisees may overlook some possible obstacles and are unprepared when the obstacles arise. To help the readers of the Franchise Business Review blog who might be considering a franchise, we have put together the following list of the 10 most common mistakes prospective franchisees make.

1. Over Investment
Over investing can destroy a project or business completely. Before investing any time or money into your franchise, create a basic budget plan to keep yourself on track. If you do not want to purchase software, there are plenty of websites – like Mint.com – that offer free budgeting tools.

2. Not Having a Plan
You never really know what's around the corner when you are starting your own business. Even so, having a basic plan can help you a lot in the end. Where are you hoping to open your store? How many employees are you planning to hire? How much (time, money, and patience) are you willing to sacrifice? These are all questions you should be asking yourself when you develop your plan.

3. Not Understanding the Franchise Agreement
The agreement you sign with a franchisor (the Franchise Disclosure Document) contains massive amounts of information, but as a franchisee you must understand everything it contains. When you sign the document you are making a legal agreement with the franchisor, so do not be afraid to seek out help from a legal expert.

4. Not Contacting Other Franchisees
When you are researching a potential franchise to invest in you should always contact at least a few different franchisees. They can serve as good resources as they will likely give you blunt and honest answers.

5. Picking a Location far from Home
Although, it may seem like a small sacrifice at first, having a long commute to the location of your store can wear you thin after awhile. There may be times when you get home only to have to turn around and go back to the office. Remember that you have to consider your own time and high gas prices.

6. Fearing Change
If you are afraid of changes, or too scared to make big decisions, then get your emotions in check before you go into this endeavor. It is important to remember that you need to take risks to be a successful business owner, and owning a franchise is no different.

7. Not Taking Training Seriously
When you attend training you will want to make sure that you are well prepared and pay plenty of attention. In the training classes the franchisor will explain how to be successful at owning your franchise, and if you are too tired or miss a day then it can hurt your chances of being successful.

8. Thinking There's no I in Team
Often new franchisees will take on too much by themselves and forget to rely on those around them. If you want to avoid burn out then you will need to have a team of employees to support you. Delegation is the name of the game—try to just manage one task at a time and divide others between yourself and your employees.

9. Forgetting to Balance Time
Committing yourself to starting your own franchised business usually means new opportunities, exciting change, and long work hours. If you have family or friends that you are used to seeing often, know that time with them will be cut shorter when you are getting the business started. Try planning to meet with your loved ones at scheduled times so that you can see them on a regular basis.

10. Expecting Everything to be Easy
With all the talk of a looming economic recession, you need to realize that getting your business up and running will be a struggle. Prepare for tough times financially and emotionally. Remember that opening any business requires a lot of hard work, but the benefits of being your own boss can definitely make up for it.

-Roni Deutch Tax Center

Learn more about Roni Deutch Tax Center at www.franchisebusinessreview.com.
 

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