Starting any business comes with risk. This includes a franchise, which is a much surer bet than launching an unproven business model from scratch. Over the past two years, we’ve seen a lot of economic and cultural upheaval, with a global pandemic and business shutdowns. There are signs in 2022 that we may face some economic challenges, as we’ve already seen increasing inflation and rising gas prices. How can you take on building your franchise business when the economy is less-than-stable? Follow these steps for a foolproof plan to get you to your launch date.
Tips for Starting a Franchise Business—In Any Economy
1. Know what you’re getting into.
Start by carefully assessing all of the franchise costs along with realistic startup responsibilities. Ask yourself these questions:
- What are the franchise fees?
- What ongoing royalties will you pay?
- What are the realistic requirements or the working capital you’ll need in the first one to five years?
- When can you realistically expect to break even?
- What can you project for estimated annual revenue?
Your franchise team should help with these questions, but we encourage you to also talk to other franchisees who are farther along in their business models. They will be able to tell you the reality behind the paperwork your franchise company shares with you.
2. Write a realistic and comprehensive business plan.
You’re going to need a roadmap for this adventure, so crafting a business plan is critical. A good business plan can help with everything from securing financing to analyzing upfront costs. There is something about putting the business plan down on paper that forces you to really think through the undertaking. It can bring up a lot of questions that you can ask other franchisees. Ultimately, a strong business plan will help you take the next step toward launching the new business. What should you include in your business plan?
- An executive summary
- A description of the company
- Product research
- Market/competitive research
- A selling plan to bring in new business
- Financial analysis and any funding needs
- Fiscal projections
A complete business plan will help you approach banks or other lending institutions for financing. The document should be living, meaning, when it is complete, you won’t want to set it on a shelf and forget about it.
3. Launch your business.
There are several other steps necessary before launching your business. For example, you may need to secure financing to have the capital you need to start your business. There will be plenty of franchise paperwork to complete. You’ll also need to hire a team. You’ll need local permits and a plan for marketing the business. Eventually, it will be time to launch.
Launching a new franchise requires promotion of the brand within the surrounding community. Most franchise companies include some kind of marketing assistance with a proven plan to make your new company thrive. Your grand-opening checklist should include:
- Select a date designed to attract the most foot traffic possible
- Advertise to your target audience
- Invite the media to help you kick things off
- Invite city officials and your friends and family
- Decorate your office with grand opening materials
- Organize fun activities throughout opening week, but especially on opening day
These are three of the most important steps necessary to launch a franchise business, even if the economy is on shaky ground. Gecko Hospitality is proud to offer franchise opportunities for qualified partners. Call on us to find out more.