Research has found that 50% of entrepreneurs in the UK choose to own a franchised business rather than struggling to think of their own start-up idea, which is often a riskier alternative. If this sounds familiar, joining a franchise could be a fast-track route to becoming a successful business owner.
There are some key points to consider when thinking about joining a franchise and starting your own business. Below, Winkworth’s new franchising team has outlined some prompts to help you with your decision.
- Pros and Cons
Franchising is a proven and robust business model. UK franchised businesses have less than a 5% failure rate compared to 50% of independent businesses which go under within the first two years of trading. Consider whether you are good at taking direction however as although you own the franchise, franchisors have guidelines in place to ensure each office is operating the same way and the brand is protected, sometimes limiting creativity.
- Is Winkworth right for you?
The new franchising team at Winkworth consider all potential franchisee applications but ideally look for experienced estate agents to join the network. Whilst you must decide whether you think Winkworth is right for you, the new franchising team will also carefully consider whether they think you fit the brand and are the right match for them. Winkworth’s franchise agreements run for a period of ten years so it’s important to consider whether you’re in it for the long run and not to simply make a quick buck.
Consider your personal circumstances carefully in terms of timing. Winkworth cold start offices can take four to six months to open if the potential franchisee has a flexible work/life balance. If, like most people, you have ongoing financial commitments which mean that you must continue to work full-time whilst setting up the office, the timeframe to opening will be extended to potentially 12 months.
Winkworth’s new franchising team have lots of locations that they wish to grow the network into so there are plenty of opportunities for potential franchisees. Consider your preferred location carefully as knowing the area you wish to open in like the back of your hand will give you an advantage against established competition, and generate revenue faster. Finding the right premises in the area can also take some time, but the new franchising team will assist and advise where possible on finding the ideal office location.
- Funding your franchise
The all-important question when considering starting a business is - can you afford it? A cold start Winkworth office will need between £200-250k of available capital to fund the office before it breaks even and turns a profit, but there are various borrowing options out there. For example - Winkworth has a good working relationship with the franchise department at HSBC who can lend up to 70% loan to value. Break-even times for businesses will vary with certain market conditions and geographical locations, so it’s important to note that as a franchisee you might not be drawing dividends until the office turns a profit. Once it does however, you have the autonomy to decide your salary, no-one else.
These are just some of the main points to consider when thinking about starting your own business and joining a franchise network. If you would like to know more about the opportunities Winkworth have on offer, get in contact with the new franchising team today.