A Guide to assisting those who want to buy a franchise
Have you wanted to buy into a business?
Have you always wanted to build a business empire, yet don’t know where to start? Have you received confusing information and advice about business start-up costs and franchise arrangements, and then here is a blog for you.
The Must Do’s
1. The Business Owner’s Why?
Understand your own individual reasoning for investing. What do you want to get out of this investment? Is it purely for financial reasons or is it so that you can have a life as well as a steady stream of income? A business owner must have a clear concise reason to invest in a business venture.
There also must be clarity on the hours a business owner wants to invest in the venture, the sales forecast and profit they want to achieve. If the person wants to be home for dinner so they can have time with their children, how can this be accomplished if it’s a restaurant business which operates mostly at dinner time? For the best franchise to buy in Australia, make sure you view https://www.biztrader.com.au/business-for-sale
2. Research, research and research
Your initial enquiry is just that, an enquiry. After some reflection, it is then time to get serious and complete the necessary due diligence and research that helps in making a sound business investment. The business owner does not want investment into the hope and prays model they want a decent return.
This research includes researching about the franchising industry, the legal contracts, the sales model, the set-up costs, and SWOT analysis, a PESTLE analysis, talking to other franchisees, viewing online reviews on Facebook, Google and Glassdoor. The customer reviews and employee review sites can help a potential buyer predict issue’s with delivering a service or employing their employee’s.
3. Review the necessary franchise and government documents at least three times, so that you fully understand each one.
As a new franchisee you will receive, various documents which may not be in your particular language, but legal jargon. Documents such as The Franchisee Agreement, The Disclosure Document, Intellectual Property and Trademarks, The Franchisee Code of Conduct, Lease Agreements, plus any government and council regulations for your particular industry type. Seek further information at BizTrader.
4. Business Acumen
Understand your own strengths and weaknesses as a business operator and leader. It’s important to understand your own strengths and weaknesses with technical and practical knowledge plus the type of business you will be operating. If you have no prior experience in an industry, then you will need to find someone that has that prior experience. Business gaps in knowledge skills are ok; it’s how a business owner deals with that gap and the likely outcome if it is not addressed properly.
The Must Don’ts
1. Don’t rush or feel that you must rush the process or decision making time
It is important that a business owner doesn’t fall into the trap of falling in love with the business concept of a franchise compared to actually knowing that it’s an investment into a vehicle to make a profit, an income stream as well as other benefits. The person selling the business may try different techniques to help you buy, such as discounting the price on offer or other attractive terms of sale. This may be good for you as the buyer; however, it is also necessary to ensure it is a great deal, not a business that the person just wants to off-load.
2. Don’t assume that a franchise will answer all your problems
Yes, a franchisee will normally have a system; however, it is important for the business owner to ensure it is a workable and results-driven system.
Sometimes a system may work for certain individuals but not for others, or it may work in some locations better than others. These factors need to be taken into consideration. A system can make it easier to achieve the outcome, yet the driver of that system is very important. For the best franchise in Melbourne view this website – https://www.biztrader.com.au/business-for-sale
3. Don’t forget about due diligence
There are many informative sites to learn more about the necessary due diligence. View https://www.biztrader.com.au for further information and seek the help of a professional.
4. Don’t under-estimate the investment.
Not only in financial terms but also the time necessary to learn about franchising, the system, networking with other franchisee’s, the actual business model, completing the task’s within the business so that customer’s buy and return to buy.
5. Don’t buy if the franchisee model doesn’t align with your reason why?
The business outcome’s financial as well as other outcome’s needs to work for the benefit of the business owner. If the business doesn’t make enough profit, then it’s not really a business, it’s a bad investment. If enough profit, then it may seem to be working, but does it allow the business owner to have good relationships with his/her family and friends. Does it all the business owner to have time off from work or has the business owner simply bought himself a job not a way to provide an income stream that helps give him/her the lifestyle they are wanting.
Buying a Franchise Australia
I hope these tips help you with your decision buying journey with the franchisee or general business ownership. We at Biz Trader want to assist those on this journey, so leave your comments below or contact us today to find your suitable business for sale.
Author: Andy White
Andy White holds a Masters of Business Management and after a career as an Officer in the Australian Army, worked as a Business Consultant and now operates his own successful Real Estate business on the Queensland coast.