When Buying a Franchise Makes Sense

Posted in: Platinum Business Inspiration

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Whether you are an electrician or a humble home handyman you may occasionally think about starting your own business. Every tradesperson who met with some success, and who loves the work they do, often dream of branching out by themselves as a self-employed contractor.

Going at it alone: the high risk of failure

But with a caution from their bank manager ringing in their ears such thoughts soon turn to a mood of caution as it dawns upon them that failure could be as likely, or more likely than, success. Unfortunately a significant majority of small businesses fail within the first 18 months of operation and that is why banks are reluctant to advance funds to any new start-up business.

Franchising as the solution

It is not all doom and gloom however because there are several well-established business models on the market in the form of franchises that make starting your own business more of a reality than a dream.

That is not to say that a franchise is a certain path to business success, but there are certain advantages that a franchise can give you that might make your decision a lot easier. Let’s take a look at some of the advantages that a franchise can offer.

Lower failure rate

Lower failure rate. And established business is always a safer bet than a start-up enterprise. Franchises are built around well practiced systems of management that have stood the test of time and are demonstrably better than any new business plan a start-up enterprise owner may develop. Some well-established franchises have relationships with banks which makes funding a new business easier, provided you have some money to invest yourself.

Turnkey business model

One of the most difficult tasks with any new business is having to start from scratch. A franchise can offer access to equipment, suppliers and training to let you hit the ground running so that your cash flow is not necessarily as constrained as it might be were you to start from scratch by yourself.

Greater buying power

An established franchise will have relationships with important suppliers which means you may be able to obtain goods at a discount, and the franchisor could help you negotiate better terms for equipment, commercial leases, and other essentials. This allows you to maximise your profit margin and can give you a head start.

Marketing and ongoing support

Marketing and ongoing support. In order for any business to grow you need continuous marketing and training to make sure you stay ahead of your competitors. Most franchises are able to supply this at a fraction of the cost you may have to expend by doing it yourself. 

The franchisor takes care of things like print and internet advertising and develops short-term and long-term marketing plans to enhance brand awareness and generate business. These could include coupons, special discounts, and promotions. You might get free marketing collateral you can distribute yourself. Not having to do marketing yourself frees up time for you to focus on your core business activity: electrical services.

Established market presence

If you choose the right franchise, you’ll buying into a business with strong brand recognition among its target market. Establishing a strong market presence is something that businesses can take years to build up. Many franchises are already well known in the community and this can add an air of credibility to your service irrespective of your individual experience. Having a quote accepted on this basis means that you are already a few steps ahead of your competitors.

Strong brand identity

As an electrician, marketing won’t be your core business activity even though it’s critical for building your business, reaching your target market, and strengthening customer relationships. If you buy into a successful, defined brand, your business has a clear image and personality for marketing your services and fordifferentiating yourself from competitors.

A strong brand identity could make your company look bigger and more professional, it could build trust and loyalty, and can communicate stability and reliability.

Operational support

When you become a franchisee, you’ll be able to draw on the operational support of your franchisor, instead of having to start from scratch and making time on trial and error. This operational support can cover thing like templates, procedures, and documents as well as tools like job management software, operations manuals, and vehicle tracking systems. Whether it’s employment agreements for new hires or cashflow tracking, your day-to-day operations can be set up right from the start. You can launch with minimal disruption with the tried-and-tested operational tools and processes from a franchise.

Additionally, your franchisor will probably also be happy to provide you with strategic support like business coaching and troubleshooting.

Proven success

By buying into a successful franchise, you’re leveraging a proven business model. The best franchises have a proven track record and the franchisor will usually be happy to give you numerous case studies of their successful franchisees. You can check their financial documents to review business performance. This proven track record gives you extra confidence you’re signing up for the right branding and marketing approach, processes, systems, vendor networks, and other elements that make up a franchise.

If these points make sense to you then perhaps it is time to speak to a franchise specialist who can point you in the right direction and help you assess the various franchise opportunities that are on the market. Electricians and other tradesmen can choose from a plethora of franchise opportunities so it is important to get expert advice during the assessment phase.

Platinum Electricians has a proven track record in helping franchisees on the fast track to growth and profit. Click through to find out more about how to start a franchise with Platinum Electricians now, with a proven business model used by our successful franchisees.