When’s the right time to be an entrepreneur? I can appreciate the concern that it may be harder to to start a business and succeed during challenging economic times.
Spoiler-Alert: It’s hard to start a business any time – entrepreneurship is not for the faint-of-heart. And economic conditions are rarely “red-hot” for universal growth. The prospect of a recession confuses even “the experts”.
That said, many franchises thrive in a slowing economy due to their more essential nature. So the hard question I’m asked most frequently is… what should I be looking for in a franchise to help reduce risks of failure and boost my prospects for success?.
1. Proven Business Model:
Successful franchises come with a tried-and-tested business model, providing a level of stability and a higher likelihood of success vs an independent business. And you must “validate” that the model is in-fact proven – you do this by interacting with existing franchisees.
2. Brand Resilience:
Established franchises tend to have greater resilience during tough economic times due to existing brand recognition, experience/history and a play-book (resources you can execute/tap when conditions warrant. People lean toward brands with reputations, professional approaches, caring/thoughtful leaders that make their value crystal clear in uncertain economic climates.
3. Supportive Infrastructure:
Franchisors offer comprehensive support, including training, marketing assistance, and operational guidance. This support can be crucial for franchisees navigating everyday challenges, as well as during downturns.
4. Cost Efficiency:
Franchise systems tend to offer cost-effective approaches (plans, preferred pricing, higher quality, greater overall value) to starting, growing and scaling a business, even during a recession. Franchisees can benefit from economies of scale, experience and peers with whom the brand shares it resources.
5. Opportunity for Innovation:
Recessions can spur innovation as businesses seek to adapt, differentiate and find new solutions to address new needs, overcome obstacles. Franchise systems often support (even collaborate with) franchisees to develop creative strategies to navigate market, economic challenges.
Is The Timing Ever Right?
Look, there’s no perfect time to open a business. You might be getting married, buying a house, starting a family, or dealing with a significant life-event. Life happens, and there will always be reasons not to do something. The antidote is “action” – the first step is to explore — taking a thoughtful, rigorous approach to finding, investigating, evaluating your options.
In a down or challenged market, being part of a system is an advantageous place to be. As franchising in a recession can actually be an opportunity to become positioned to take advantage of the upcycle. Choosing the right franchise is critical. Naturally, our advice is to work with an industry expert with the approach, resources and experience that will prepare you to make the best possible decision and maximize your prospects for success. Hmmm… who might that be?
