How to Choose a Good Electrical Franchise

Posted in: Platinum Business Inspiration

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When you are exploring the possibilities of getting your own business, a franchise is one of the safer bets around. If you provide electrical services, the same principle applies in that, although it might be tempting to start your own business in your own name, choosing a franchise could be a much safer option.

The challenges of running a business

You have no doubt heard horror stories of businesses going bad within the first 18 months of starting. This is an unfortunate truth, and many entrepreneurs with stars in their eyes have started what they thought would be the beginning of their dream only to find that the practicalities of running a business are more complex and unpredictable than they ever imagined.

Starting a business is a bit like panning for gold, it seems so easy at the start and it feels like it will only be a matter of time before you strike it rich. But as the days drag by and the bills begin to mount you are faced with a bitter task of deciding whether or not it is economically viable to continue, or whether to close the doors.

Why consider franchising?

There are so many variables when it comes to starting a business that even the best laid plans can come unstuck due to unforeseen circumstances. A safer alternative might be to consider a franchise which, because of the proven business systems and ready-made market, already has a successful track record that you can more comfortably rely upon.

Finding the best franchise

So how do you go about choosing the best franchise? Here are a few pointers to get you started.

1. Established track record and market recognition

Try to find a franchise with a good track record and a name that people are familiar with. Market recognition is one of the hallmarks of success and a franchise name that has been well established in the market before you purchase a franchise means that you can hit the ground running and capitalise on the pre-existing track record.

2. Start-up costs

Buying into a franchise will involve start-up costs like a one-off franchise fee, and this could vary from $10,000 to $1 million and above depending on your chosen franchise, location, and industry. In addition, you might need to purchase equipment, vehicles, and other extras not included in the franchise fee. These other costs could include lease, training, inventory, insurance, permits, accounting, and other expenses. When reviewing your franchise options, compare start-up costs and make sure you have enough capital to cover start-up costs and ongoing costs.

3. Established operations and systems

Some franchises are built around a unique concepts, whilst others simply use great marketing tools to compete in very competitive markets. As an electrician, you can enjoy a great peace of mind if you choose a franchise that is not only well-known in the marketplace, but also has the backup of well-established, successful systems.

4. New vs existing franchise

You could buy into a franchise as a new franchise from the franchisor or by purchasing a franchise operation from an existing franchisee who wants to sell out. So when should you consider buying an existing franchise? Usually it’s when timing is an issue. It can take anywhere from two months to 12 months to set up and get started with a new franchise. 

If you’re keen to launch right away, consider an existing franchise. This means you might be able to skip things like scouting for a location, hiring personnel, and building up a customer base. Keep in mind an existing franchise can be much more costly to buy, so weigh up the pros and cons and do due diligence before you commit.

5. Sufficient geographical area

Many franchises are divided by geographical areas so it’s important to ensure you are buying a large enough area to produce a satisfactory income. Be aware that most of the competitive and more lucrative geographical areas are quickly snapped up and you may be left with potentially less profitable locations. Nevertheless, it is a good idea to hire a business analyst to assist you in determining whether or not the franchise can be successful in other areas.

6. Ease of operation

Ease of operation is a hallmark of a successful business so make sure your franchise offers you established, easy to operate systems that mean you won’t be distracted with too much paperwork and can get down to the nitty-gritty of supplying the service, and making the money.

7. Low overheads

Low overheads are imperative for any start-up business, and the same rules apply to new franchises. Make sure you don’t overload yourself with ongoing expenses in the early stages of your business and make sure you can scale your marketing according to turnover.

8. Ongoing costs and expenses

In addition to overheads, your ongoing costs and expenses as a franchisee could include royalty fees and advertising and marketing fees to cover the franchisors costs in helping you market your business and other expenses. Your other ongoing expenses could include operational expenses like salaries, wages, utilities, and lease fees. Royalty fees and advertising fees could be set as a percentage of your gross sales by the franchisor.

9. Support from franchisor

Finally, consider the support you’ll be getting from the franchisor. The best franchises offer a strong support system for their franchisees and the franchisors are committed to helping you succeed and thrive. Remember, you’re buying into a business and they should provide generous support at every stage from setting up and software tools to operations and strategy.

Platinum Electricians has a long track record of success in providing electrician franchisees with a strong foundation for success and a great platform to jump from. Click through to find out more about becoming a franchise owner with Platinum Electricians.