First of all, Merry Christmas! I can’t believe that I’ve been writing this column for nearly four years now. By reading it, y’all have given me the gift to keep on doing what I love doing - putting words down on paper – and for that I thank each and every one of you on this Christmas Day.
Now, let’s move on to a possible gift you can give yourselves today. Could 2017 be the perfect time for you to follow your dreams and become one of the millions of Americans who started a business despite feeling the same fear and uncertainty that you might be facing as you ponder making a similar move? That’s only a question you can answer. But I will tell you that, whether you’re considering starting a business from scratch or buying into a franchised business, you’re not alone on your quest to figure out your future.
You’ve got a friend
Sara Waskow is the owner of FranNet of Dallas/Fort Worth, a franchise consulting service that offers free consultation services to potential business owners. Various studies have shown that franchise opportunities are a safer bet for long-term success than startups or existing business purchases. For example, 92 percent of FranNet franchise placements were still in business after two years, compared to only 67 percent of other small business ventures. After a five-year period, FranNet placements had an 85 percent success rate compared to only 50 percent of other small businesses. I recently sat down with Waskow to get her take on how FranNet can help people determine if a franchise opportunity is right for them and what franchises could be standouts in DFW in 2017.
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Mark Fadden (MF): “Can you describe some of the various franchises you represent and how you help individuals select the right franchise for them?”
Sara Waskow (SW): “FranNet has an inventory of approximately 150 franchises that have been heavily vetted by our corporate office. We represent many service based franchises – anything from cleaning to hair care to automotive to senior care. There are also business to business (B2B) services like IT, sales and corporate training. We also have a few food and retail brands. Our process involves a heavy focus on education about business ownership and franchising to help our clients find the right fit. Then, we have them complete an assessment to get a better understanding of their goals, skills and finances. Once we have this information, we meet with them face to face to dig deeper into their answers and get to know them as best we can. It’s at that time that we present a few brands for them to research. We want to narrow down their options and mitigate as much risk as we can. We have weekly calls to make sure they are doing their due diligence and staying on track, and give them comparison tools and educational resources along the way. The goal is to get to a confident answer – either yes or no. We don’t want any surprises.”
MF: “What's your placement rate? And do you sometimes steer people away from buying a franchise who are clearly either not ready or don't have the right personality/background/fit to be a franchisee, no matter what the business?”
SW: “About 25 to 30 percent of the clients we meet with purchase a business. Sometimes people decide franchising isn’t right for them; others find a job during the process and decide to take advantage of the immediate income versus the time it will take to attain that income in a new business. Other times we recommend the client pursue other career options. Sometimes this is due to their attitude, (maybe too much fear – it’s important for business owners to have confidence themselves along with the leadership of the franchisor). Other times, perhaps their finances are too tight for me to feel comfortable with them moving forward. They need to have enough money available to support their living expenses and not be dependent on income from the business for about a year. There have also been situations where prospective business owners had their own ideas about how the franchise should operate and haven’t wanted to follow the franchisor’s system. In this situation, I might recommend they start something from scratch so they can be creative. There’s no reason to purchase a franchise if you aren’t willing to follow the system.”
MF: “Are there telltale signs that we should ditch our 9 to 5 job and start a business or buy a franchise?”
SW: “Some signs you should ditch your 9 to 5 are: you aren’t growing personally and professionally, you don’t have time for friends, family or even yourself anymore, or you dread waking up in the morning. If you feel like you’re at a dead end professionally and don’t have time to enjoy life, it is likely time to change careers. Life is too short and our days are not guaranteed. Find a career or a business that allows you to utilize your strengths and skills, while also giving you control over your schedule and your time.”
MF: “What will be some of the strongest franchises of 2017 in the Fort Worth area?”
SW: “There are many people moving to DFW every day. The economy is good, and it’s a great place to do business. The strongest franchises are those that serve our everyday needs. It seems mundane, but everyone needs to find a dry cleaners, car repair, pet care, etc. The health and wellness industry is also very hot. Businesses geared towards helping people take care of themselves are continuing to thrive – that includes healthy restaurants, fitness, skin and hair care, etc.”
MF: “What are some of the pitfalls/mistakes that people make when buying into a franchise? Are there any new concerns that have come along these lines for 2017?”
SW: “Some of the biggest pitfalls people make when buying a franchise is not having enough working capital and buying a business for the wrong reason. In other words, some people buy a restaurant simply because they like the food, but they don’t have any understanding of the role of the owner. And in many instances people underestimate the amount of working capital they need and run out of money to grow the business. These mistakes have been common for many years and will continue to occur without the proper education and research into business ownership.
“Marketing is also key, so it’s imperative as technology continues to advance, that your business can keep up with it. If you serve the consumer, make sure you stay on top of all social media and anywhere else people can write reviews. Respond in a timely manner and take care of any problems immediately. Once your reputation is damaged on social media, it’s incredibly difficult to recover.”
MF: “Anything else you'd like to include about best franchises for 2017?”
SW: “Think about your skillset and goals (both lifestyle and financial) and find a business that will help you meet those goals. There can be great franchises out there, but if they require heavy marketing and you hate sales, then it doesn’t matter how great the business is, you may not be successful. So, you need to align the role of the owner with your own skills. Focus less on what the business does and more about what the business can do for you.”
For more information about FranNet, visit frannet.com.