Operating a franchise: What happens?
Considering running your own franchise? When you choose the franchise you want to invest in, you’ll have to decide whether or not to go for one that’s fairly hands-on. From greater flexibility to lower costs, there are plenty of advantages to choosing a hands-on business over a more extensive site-based franchise. However, there are some challenges too, so it's essential you have a full understanding of your obligations and responsibilities before you make any commitments.
What follows is our guide to franchising. Here, we’ve focused on what happens when you take on a particularly hands-on business, as this will give you a fuller picture of what can be involved in running a franchise.
1. Relatively inexpensive set-up
Many hands-on franchises don't require a significant amount of capital to set up, so there’s a lower financial risk. That means you’re less likely to rely on funding, so you won’t have to pay interest on loans, saving you money in the long run. Some can also be operated part-time, enabling you to continue with other commitments or just enjoy the extra time off.
Another reason these businesses are among the most affordable franchises is that they can often be run by one person. That means there’s no need to spend time posting job adverts and recruiting employees, let alone putting in the hours to train and manage them. You also get to keep a much higher proportion of your business’s revenues, while a larger franchise would have to pay salaries.
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2. Lower overheads
Another potential advantage of running a hands-on franchise is that you may not have to worry about expensive office renting costs. This will be the case if you set up a home or van-based business. You will need to pay for the extra utilities you use at home, or your van, fuel and any servicing fees, but the combined total will be far lower than the costs associated with renting out office or retail space in a key location.
By starting a home-based or mobile business, it’s usually easier to become profitable earlier in the franchise contract, especially if you have a lot of experience in the sector.
If you've always preferred being out on the road to being stuck in an office all day, van-based franchises could be just for you. You can work as much or as little as you want, meaning you'll have more time to meet family commitments and take time off when you need – or want – to. Many people love this flexibility, and take the opportunity to have an extra-long lunch break with a walk in the park or meal at a local café. You could even start later in the day and have a lie-in every morning – the choice is yours.
You’ll also be able to see new faces with every new job and vary your working day. It can be refreshing to travel and talk to people with different backgrounds. This may boost your motivation and help you keep up momentum.
However, as your business grows and your customer base expands, you may find yourself working much longer hours or struggling to keep on top of your business functions. This is when it will be necessary to hire staff or buy another vehicle to ensure you can meet your demand.
4. It’s physically demanding
As you might imagine, many hands-on franchises can be very physically demanding. For example, running your own pizza franchise could be pretty hard work if you have to knead copious amounts of dough every day. If you run a plumbing business, you may need to spend hours crouched down fixing pipes, which can take its toll on your body. And, of course, becoming a fitness instructor will involve a lot of physical exercise.
Imagine you’re the owner of a photography franchise and the official photographer for a wedding or party with more than 1,000 guests. While it wouldn’t be as physically demanding as plumbing, it could be quite challenging to spend hours standing and moving around as you try to get the best shots of every guest. You’ll also need to stay cheerful and be sociable with guests if they try to engage with you.
On your busiest days, you may struggle to find the time to have lunch or even grab a quick coffee, especially if you're travelling to remote areas of the country. If you relish the challenge, though, a hands-on business can be a lot of fun.
5. You’ll be on the move – a lot
A van-based franchisee like a plumber will need to be on the move regularly, often at short notice. This can be mentally exhausting, especially when you’re fully booked and spend hours driving every day. If you’re stuck in traffic or get lost, causing you to miss appointments, your business could suffer. This can be extremely stressful, as you’ll want to pack as many jobs into your day as possible in order to maximise your profit potential.
Also, if you’re travelling far and wide, you’ll spend much more time away from home, which could make it harder to balance your work and family commitments. You’ll find this difficult if you love spending a lot of time with family and/or friends, as you may find you spend less time with them once you become a franchisee. If you have young children, you’ll need to explain your new venture to them and make sure they understand that it will demand a lot of your time, particularly in the initial stages.
However, some people still prefer this to sitting in the same office all day, and it can be both personally and financially rewarding to achieve a lot in a day.
6. Travel costs
Unsurprisingly, there will be higher travel costs if you need to drive dozens or even hundreds of miles a day to different locations. You’ll also need to factor in the cost of fuel, the impact of fuel price increases and the cost of maintaining your vehicle and sending it for repairs from time to time.
However, you may be able to claim all work-related travel costs as expenses on your tax return to reduce your annual tax bill. And remember, you’ll still save plenty of money just by operating from a van rather than a physical office, store or warehouse.
7. Traffic could cause problems
This is something every van-based franchise will have to deal with. Usually, with normal rush hour traffic, you can estimate the journey time so you’ll know how long it will take to get to a customer’s address. This usually means having to leave home a little earlier and getting back later than you’d like.
However, the most disruptive traffic is the kind that happens at short notice. Road accidents, severe weather, burst water mains and other events can quickly lead to congestion, making it harder for you to get to your customers on time.
Unfortunately, this is part and parcel of running affordable franchises and being your own boss. Therefore, it’s important to stay up to date with local traffic so you can prepare for every emergency and minimise disruption to your business. Ask for your customers’ contact details beforehand so you can let them know when you might be late and what your expected arrival time is.
8. Lower marketing costs
Compared to a site-based franchise, a van-operated business won't need to spend so much money on marketing. Why? Because your van will do your marketing for you. Just having your brand name and contact details on your vehicle will make it difficult for other motorists and pedestrians not to notice you.
For example, if someone has a leaking pipe and sees a van that has a brand with ‘plumbing’ in the name, all they have to do is make an online or telephone enquiry on the spot or remember the name of the company and search for it online later.
If you work from home, consider getting a vehicle branding wrap for your car. If you’re willing to travel round advertising your company whenever you need to get anywhere, this can be an effective way of marketing your business. It can also save you a lot of money, as you only need to buy it once.
However, all franchise companies need to have an optimised website so their customers can easily find them online. Nowadays, this is a necessity. If customers can’t find you online, they might be sceptical about the quality of your products or services. At the very least, you’ll need to make sure you set up business profiles on key social media sites such as Facebook, Instagram and Twitter. These are free to set up and will still introduce you to a large audience.
Hopefully, all the above advice will prove useful if you’re considering investing in affordable franchises in your area. For more information, check out our other online resources.
Alice Tuffery, Point Franchise ©
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