With all the hype of engaging in a franchise business, it is well accepted that franchising is a “sure ball” for success. A free enterprise has to undergo years of operation and advertising before it will be accepted to the market and become successful. Majority of them never succeeded because of many factors are uncontrolled. But the question is will all kinds of franchise business succeed? We might have a presumption that it may or it may not but there are also many obvious factors that make them fail. The main obvious reason why businesses fail is ‘lack of business experience’ of the owner. It is not enough that we are well funded or have enough capital but the experience really counts. This is especially true to a high earning executive who wants to start a business thinking that the work experience is enough.
Remember the previous topic I’ve discussed about intrapreneurs? For example how many people know about book keeping? If you are an accountant you sure know it but what about entrepreneurship? Do you have it? And also even having business experience or entrepreneurship is also not enough because you have to follow a set of rules and guidelines from your franchisor which will might cause failure if you do it your own way. Unlike a free enterprise that you have the entire decision making in your hands. With regards to the location, commercial spot or high foot traffic will really help make it successful but some fail because of the wrong type of business for a given location. Some franchise business became successful because of the kinds of people who live in the area.
And the capital, some franchisee under estimates the amount of fund needed to successfully run the business. There are many factors to consider like franchise exhibitions, advertising and franchise consultant fees that most of the time are out of the franchise package. Last but not the least is communication skills. We taught that only employees need this skill but much more in handing a business. The arena is even wider because being a franchisee we have to deal with the franchisor and the employees. Do you know that some franchise businesses lose customers because of bad employee attitude? Maybe the owner is mean or careless so it affects the employees. People skill is very important in this business.
[tag]franchise,business[/tag]
Posted by Manuel
Manuel Montala was an online entrepreneur who enjoys blogging about entrepreneurship and gathering information for his blog to help budding entrepreneurs. You can also reach him on twitter: http://twitter.com/mmontala
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