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Franchising a Business? Learn the Fundamentals First

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Small business owners contemplating franchising their business should possess basic business skills. Before embarking on the road to franchising the small business owner should inventory their business skills and if necessary sharpen them before attempting to franchise their business.

Every day countless business owners both large and small consider franchising their business. This process will include attorneys and franchise consultants, including myself, who will be engaged by these business owners who may decide to proceed with franchising. Numerous articles and a number of websites provide advice on whether a business can be successfully franchised. Key areas to analyze include the type of product or service the business sells, profitability of the existing business and the amount of working capital available for building and developing a franchise program, etc. However, one area that doesnít receive enough attention, particularly in the case of the small business owner, is the competency of that owner to build and manage a successful franchise company.

Focusing solely on the features of the business and its pros and cons as a franchise operation rather than on the skills of the person leading that business could be a mistake. A number of small business owners that enter the world of franchising go from operating one business to two. Itís important that they have the management skills and necessary knowledge to make that leap. Launching a new franchise program can be a daunting task.

There is a fundamental knowledge base that these individuals should have. If they donít have these skills they should acquire them or hire someone they can rely upon who does.

  • Basic understanding of business accounting. This includes the need for proper record keeping and financial statements.
  • Organizational skills that include prioritizing, goal setting and the importance of focusing on specific objectives.
  • The ability to write a basic business plan that includes the key components.
  • Basic computer skills.
  • Sources for obtaining working capital or financing

A Small Business Development Center (SBDCs) can be a good source of training and advice for small business owners considering franchising.  Small Business Development Centers (SBDCs) are partnerships primarily between the government and colleges/universities administered by the Small Business Administration. SBDC services include, but are not limited to, assisting small businesses with financial, marketing, production, organization, engineering and technical problems and feasibility studies

There is SBCDs Located in every state including Lead Small Business Development Centers (SBDCs) of which there are sixty three locations.

Each Center coordinates program services to small businesses through their network of sub-centers and satellite locations in each state. Center staff includes a director, staff members, volunteers and part-time personnel. The services are free and confidential with low cost training available.  Assistance from an SBDC is available to anyone interested in beginning a small business for the first time or improving or expanding an existing small business, who cannot afford the services of a private consultant.

Before taking that next step into franchising the small business owner should have the required business skills or hire someone who does.

Visit the Association of Small Business Development Centers website to find your nearest SBDC.

© 2012 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at franchiseknowhow@gmail.com

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