If you have been looking around the world of franchising for a while you may have bumped into the idea of franchise consulting. Since this profession is new to most people let me tell you a little bit about what franchise consultants do and why they might be valuable to you if you are considering starting a new business.
What is a Franchise Consultant
A franchise consultant represents a large number of franchise companies in a variety of industries. For example, the Business Alliance of which I am an affiliate represents over 240 top franchisors including companies like AAMCO, Molly Maids and Huntington Learning Centers. The consultant helps franchisors find potential business owners for their brand. There is no fee to the potential business owner (you) as the consulting fees are paid by the franchisors.
The Consulting Process
Franchise Consultants talk with people who are interested in starting a business. Sometimes potential owners have a general idea of what they want to do but most of the time they really don’t have a clear vision.
The consultant talks with them for about twenty minutes about their business goals, their career background, what they want to do in the future and what kind of investment they can make. The consultant takes that information, performs an opportunity search and creates a report with three or four recommendations that line up with what the client is looking for. The search process usually takes about three days. There is no cost or obligation for this service. If the recommendations don’t feel right to the client, they guide the consultant in a new direction. If the client decides they are not interested, they simply inform the consultant and the process ends with no further obligation. If some of the ideas interest the client, the consultant will help them through the information gathering process. The consultant can make sure the client gets all of the necessary information and assist in the evaluation of the opportunity.
How a consultant can help you
Now that you understand what franchise consulting is, let’s talk a little about why it might be important in your business search. At the beginning lets assume that you elect to research business ideas on your own without the assistance of a consultant. With limited knowledge and no tools other than the internet to assist you, the searches will be complex and time consuming. The amount of information presented in a non-standard format may seem overwhelming and with no way to separate legitimate opportunities from scams you’ll likely find yourself expending a lot of time and energy exploring dead end roads. The danger is that after having completed a substantial amount of research you may become discouraged and terminate the business investigation process.
A franchise consultant can help you think through your personal and business goals, strengths and weaknesses as well as investment parameters in a systematic manner. The consultant will narrow the field of potential concepts to the ones most likely to match your needs. In other words, the consultant will help you avoid wasting time and energy on dead end paths.
Managing your network
Another thing I would point out is that to be successful in business you must appreciate the experience and capabilities other people bring to the table. You don’t succeed in business alone. You will depend upon a variety of people including employees, attorneys, accountants, bankers, business partners, vendors, franchisors and franchise consultants. Success, at least in part, will depend on your ability to manage network contributions to your efforts. Working with a franchise consultant is your first opportunity to leverage someone else’s experience to your benefit.
Timing
Now let’s talk a little bit about the right time to get a consultant involved. There are tons of franchise related sites on the internet and they are in the business of trying to get anyone who can say “start a business” to fill out a form so they can sell their “lead info.” Very few of the individuals who fill out those forms are ready for serious help. Most of them had the idea of being their own boss pop into their head and filled out a form to get more information but their interest falls off within a short time period. If you are casually interested in business ownership or franchising I would suggest you request some very general information on franchising.
If you get to where you are genuinely interested in exploring business ideas then getting a consultant involved would be a good idea. Don’t wait until you have made a decision about what company you are interested in or try to research concepts on your own. Waiting too long will deny you the opportunity to take full advantage of what franchise consulting has to offer.
Financial Requirements
The other piece of the puzzle is financial. Realistically, you’ll need to be able to invest between $20,000 and $75,000 cash (not borrowed) into the business. Many franchises will also have a net worth minimum (assets-liabilities). This is a protection for you the investor. Franchisors don’t want you to fail so they make sure you are adequately capitalized. McDonalds is a great example in this area. They require 40% of the cost of a new restaurant be financed with non borrowed funds which means a new franchisee will make a cash investment of between $275,000 and $600,000. McDonalds franchisees are well capitalized and that is one reason they don’t fail. In general, a good guide for you might be $50,000 available cash and a net worth of $150,000. If you are genuinely interested in starting a business and have at least $30,000 cash to invest a consultant can help you. None of this money goes to the consultant. If a consultant asks you for a check to get the process rolling, hang up the phone, they are not a legitimate consultant.
Maximizing your benefits
First of all, enter the process with an open mind. Even if you feel you know what kind of business you want to be involved with. Understand that the majority of entrepreneurs who buy a franchise do not buy the one they initially thought they would. Being open minded and objective through the investigation process will put you in the best frame of mind to decide on the correct decision for you. You should of course share any concepts you are interested in but more importantly, you should share WHY that concept is appealing to you. The “why’s” behind your thinking are the most important areas to probe. Helping your consultant to understand what you want to achieve personally and professionally will allow the consultant to provide you with the best information possible.
At this point, I would encourage you to evaluate your personal goals. What specifically do you want to achieve? How much money will you earn? How many hours will you work? How many people will work for you? Where will your work be conducted? How will your family be affected? What does your ideal situation look like three years from now? A franchise consultant can help you evaluate how your answers align with various business opportunities.
For more information about franchised business opportunities visit http://www.myfranchisemarket.com
You’ll have the opportunity to schedule a FREE NO OBLIGATION business consultation. If you are looking for an opportunity to kick some business ideas around this could be the opportunity you are looking for. No Pressure! No Sales Pitch!