According to the U.S. Census Bureau’s Survey of Entrepreneurs, the key drivers for entrepreneurship are earning more income and the desire to be one’s own boss.
No surprise there.
As the chief development officer for Überrito, I see that every day in my efforts to drive franchise sales and development for the company. My daily interactions are with highly motivated individuals looking to grow their income while maintaining their autonomy by working for themselves.
To be sure, the lure of independence and the ability to control one’s destiny has created many a entrepreneur.
However, there can be considerable unforeseen pitfalls along the way:
Lack of guidance: Many entrepreneurs will tell you, it can get lonely at the top. It helps to have someone with experience in all of the aforementioned areas—and many others—that can provide guidance and examples of what has worked and what has not—and why.
Building a customer base: Everyone thinks they are a marketing expert, but it is easier said than done. Marketing is part art and part science, and it’s important to get it right to be successful. When the time comes to develop and execute marketing strategies that will bring foot traffic to your door, and keep those customers coming back again and again in a crowded marketplace, having access to a team that has a strategy that is successful and repeatable is extremely valuable and is a key to success.
When you consider the advent of Twitter, Facebook, Yelp, and more, there are countless ways to reach customers. Geotargeting and other methods can be much more precise in promoting your brand and measuring results. Social media is constantly evolving and while it can be extremely positive, there are also just as many ways for it to have a negative impact.
It makes less sense to swim upstream alone in such a noisy, fragmented marketplace. Tapping into the marketing resources of a franchise enables entrepreneurs to focus on day-to-day operations, and, profitability.
Unforeseen start-up costs: A blank slate is difficult to build from. If you are negotiating a lease, or choosing a contractor to build a storefront—the margin for error is thin and will impact your business for years. It doesn’t take much to come out of the gate in a deeper hole than anticipated.
Furthermore, the amount of decisions to be made in terms of location, layout, and finishing touches can be paralyzing. If you are going to operate a storefront, it can be useful to rely on experts regarding items such as traffic flow, point-of-sale considerations and more.
Human Resources quagmires: Most entrepreneurs are driven by success. They like to set goals and then attain them. The endorphin rush from making a sale or achieving purchase goals is hard to beat.
But nothing disrupts such positive momentum more than navigating complex human resources issues. While these are important issues that must be resolved, they can become burdensome, and get in the way of making sales. They are often fraught with legal considerations and are best left to those who are up to date on labor laws and best practices.
Beyond managing current employees, attracting and hiring the right ones presents its own challenges. A national franchise can be a helpful resource on many of these issues.
Distribution and Inventory control: It is a simple concept that you cannot sell what you do not have. Yet one of the most critical mistakes a business owner can make is having an incorrect amount of inventory, whether that is having too much or not enough. This is critically important in the food-services industry where product can often have a very limited shelf life. Over ordering product often results in spoilage while under ordering results in unhappy customers and a loss of sale.
Even if you do not have product that can spoil, all products have a shelf life to consider. Timing is everything and it is of great benefit to have an idea as to what to expect and what has worked for others.
Finding distributors to supply your raw material needs—especially if those needs include fresh food items—can be difficult and costly if you are operating alone. Having the purchasing power and relationships afforded by a franchise eliminates guesswork in choosing distributors and promotes favorable costs.
Financing considerations also come into play here. Depending on the carrying cost it may be that alternative financing can be provided through a franchise, often at more competitive rates and terms than what a traditional bank offers.
This is a small sample and many of these misadventures can be mitigated when partnering with a proven franchise.
While these issues can pose a significant challenge to a startup, it is very likely these issues have already been considered and solved on a franchise level.
A franchisor is aware of all the nuances and challenges franchisees may encounter. Much of this knowledge is taken into consideration when removing or alleviating barriers to entry. This experience also better positions franchisees for success due to the systems that have been tested and put in place.
A franchise only does well if its franchisees are doing well and it is in a franchise’s best interests to help its franchisees succeed.
Partnering with the right franchise provides a stronger likelihood of your reaching your dream of financial independence—without the common pitfalls that plague many entrepreneurs.
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