Here are several common start-up mistakes made by first-time franchisees and some top tips on how to avoid them.
The business world is awash with entrepreneurs. Some have become hugely successful business people, while others have learnt from their mistakes along the way. If you become a franchisee, you will make some mistakes, because everybody does. Here are several common start-up mistakes made by first-time franchisees and some top tips on how to avoid them:
- Drawing up too detailed a business plan. Don’t be tempted to lay ultra-cautious plans, wary of over-extending yourself. Try to plot the future path of the business, month by month, but flexibility is all important.
- Gung-ho franchisees who expect to grow their businesses at the same rate as Facebook or Google may need to think again. Set conservative targets for the first few months of trading and you will not be disappointed.
- Going into business with an untested partner. Some would-be entrepreneurs think it’s good idea to share the risks with someone else, perhaps someone they don’t know very well. Franchising spreads the risks, so you don’t have to find a business partner. You have the Winkworth head office team to advise and support you.
- Not researching the market properly. If you are buying a real estate franchise in the West Country, you need to know the property market - all the little local variations that affect house prices - and not just try to “wing it”. As usual, do your research for long-term success.
- Not shopping around long enough for the most appropriate business loan for your particular franchise. Don’t get saddled with a loan that it is not fit for your business moving forward. A little more research can help avoid this mistake. Find the right business loan from the outset.
- Hire the right staff. Some people have a natural flair for recruitment. You want staff who will help drive forward your business with commitment and enthusiasm. It is often best at the beginning of a franchise start-up to do as much as humanly possible yourself. You can always expand later.
- Failing to take into account fluctuations in house prices, when drawing up a business plan. Try to predict future market movements. Read the financial pages and identify the next hot spots that will rise steadily in your particular area for the next few years. You are looking for an upward trajectory: a new Cross Rail Station, inward investment or infrastructure improvements, are all encouraging signs.
- Failing to take proper advantage of the know-how and experience of the franchisor. Some franchisees may put too much faith in their own ideas and not respect the core values/business model of the franchisor. A little humility helps.
The most successful franchises follow an upward-learning curve. You might not get everything right straight away. But if you make four mistakes in the first year, then three in the second year, you are heading in the right direction.
Have you been thinking of starting a franchise? Winkworth is looking for new franchisees to continue their successful growth.
Contact Gina Piper (Business Affairs Manager) on 020 7355 0200 or via email at firstname.lastname@example.org to find out more about starting your own Winkworth franchise. All conversations will be strictly private and confidential.
Learn more about franchising with articles, tips and advice on taking the next step in franchising: www.winkworth.co.uk/estate-agent-franchise