You may be ready to launch your new franchise business, but is your local area ready to welcome it? In this article, we run through the signs you should look out for if you want to create a successful business.
You can never be 100 percent sure a business will take off. But there are always tell-tale signs you’re set for success. Of course, franchises offer entrepreneurs a great deal of security from the get-go, with a proven business model, established customer base and ongoing support. And, if you’ve got all the attributes of an entrepreneur – the business mindset, the dedication, the passion – you’re already a step ahead of the rest.
But how can you be confident your franchise business is well suited to your local area? Here are six signs you should look out for if you’re about to join a franchise.
1. Your competitors are making money
No matter the type of business you’re launching, one of your top priorities should always be to scout out the competition. Take an in-depth look at the types of organisations doing well in the local area and why they’re popular.
Contrary to common belief, having similar businesses to the one you’re about to set up in the area is good. Unless the franchise you’re joining is highly unusual and you’re taking advantage of an incredibly niche gap in the market, you should try to make sure you can find comparable companies. If you can’t, you may discover your product or service just isn’t in demand locally. Chances are, other entrepreneurs have tried and failed to establish their businesses.
Once you’ve identified similar businesses, you’ll want to be certain they’re doing well. As far as you’re concerned, there may as well be no relevant businesses if the ones that are there are failing. Head online to visit company review sites like Yelp, and take a look at their websites to see if they have a high volume of positive customer testimonials. If they’re a ‘brick and mortar’ business with a physical premises, you could even pop in.
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2. Your competitors’ products or services are missing something
Think about the products or services your franchise business will offer. Do they live up to your competitors’? If you feel you can go one step further than they have, you’ll probably be able to attract more customers once you set up shop. Ask yourself, When I compare the products or services I’ll offer to those of my competitors…
- are they of higher quality?
- are they cheaper?
- are they more convenient to access?
- are they more attractive?
- is there more variety?
Ultimately, you should be solving a problem for your customers. And if you’re solving it in the best, most convenient or most cost-effective way, you’re likely to do well.
3. Customers are interested in your product or service
If you can offer your customers a superior service to other local businesses, you’re on the path to success. But you should try to work out whether there is demand for the specific franchise business you’re about to launch. How can you do this?
Well, the internet should be your first stop. Join relevant social media groups and get involved in the discussions. There’s no harm in asking others’ opinions to gauge just how highly potential customers would rate your business. You could also distribute surveys at local events or hold a focus group to get direct, face-to-face feedback from those in the community.
4. People are searching for your product or service
This is a clear sign your franchise business will be in demand when it’s up and running. If you haven’t yet decided which franchise you’d like to join, think about which types of businesses your local area is lacking. Ask friends and family about the sorts of businesses they’d like to see in the community. You could even go back over products or services you’ve searched for in the past.
If you’ve got your heart set on a specific franchise, do a quick Google search to find out whether it offers a valuable product. If you type in a couple of keywords and your location, Google should suggest options based on popular searches for your area.
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5. There’s a certain demographic
Depending on the type of franchise business you intend to run, you may be targeting a specific demographic. For example, a home care company will rely on elderly clients, while a dog-sitting business might look for professionals who need someone to look after their pet during the day. Meanwhile, a trendy clothing retailer should be based in an area with lots of young, fashion-conscious consumers.
There’s little point setting up a trendy clothes store in a retirement village or a dog-sitting business near a university campus. So, work out whether your local area has the demographic you need, particularly if you’re launching a ‘brick and mortar’ company without the option to travel to clients.
6. It’s got the right infrastructure to support business
Some businesses can survive being based in the middle of nowhere. For instance, working from your home in the rural English countryside is fine if you’re offering online services like private tutoring, for example. But you’ll need to make sure you’ve got everything you need at your fingertips if you can’t operate solely from the comfort of your sofa.
Think about whether there are enough residents in the vicinity and whether there’s a bank, post office and transport hub nearby. You should also consider which other businesses your customers are likely to visit, and whether they operate nearby.
Become a franchisee
We’ve got a whole catalogue of resources for those ready to take the next step on their franchising journey. Starting a business can be a nerve-wracking and confusing process, and most entrepreneurs have plenty of questions about how to ensure their success.
Take a look at our Become A Franchisee articles for more helpful tips and advice on launching a thriving franchise business.
Alice Tuffery, Point Franchise ©