Franchasie or Small business ideas??

Sarah1970

Hi All

I have been offered to take voluntary redundancy from my place of work. Due to the current climate and recession I am in two minds whether to take it or not!!

I will come out with around £35K, and am toying with the idea of investing in a franchise or small business and wondered if anyone has any ideas of profitable franchise's. I am not looking to become an overnight millionairre (although that would be nice LOL!) I am just looking to earn just over my current wage (roughly £32K).

If I loved my job I would stay, but to be honest I don't!!!

Any ideas as there are so many con artists out there, this is the only money that I will EVER have in my life and don't want to flush it down the loo!!

Thanks
Sarah

paulwf

Hi Sarah,

A very good starting point is this video:

http://franchisesuccess.tv/video/become-a-successful-franchisee

You have to register with the site to watch all of it I think but that only takes a minute. Admittedly the video is a bit cheesy (in the corporate training video style) and a bit long and repetitive but I did pick up lots of useful info.

Look at some of the others vids on that site and also check out the BFA at http://www.thebfa.org/ and http://www.whichfranchise.com/ . There are also a couple of franchise magazines readily available in WH Smiths and franchise exhibitions crop up fairly regularly.

If you want to be self employed then you really want to do something you are passionate about, that should be your first stage in choosing a business. Remember if you are self employed what will happen if you are ill or want to have a baby or just take a holiday etc? The luxuries of sick pay and holiday pay don't exist if you are self employed, but you do get to do something you love and have a lot more flexibility.

Franchises tend to have high start up costs as there is an up front fee and lots of legal fees. However failure rate is far lower and returns can be good. £35K sounds like a lot but as I've found out if you're looking to set up a retail business that is actually small change. There's lots of franchises with low start up costs so you have plenty of other options, but if you want to make around £32K you might need to raise some finance or have a really good speciality.

I could ramble on for ages about this as I've just spent the last few months putting my business plan together for a proposed franchise, but instead here's a couple of tips:

- Take things slow, give yourself several months to choose the ideal business then several more months to work on the business plan. If possible take any job going in the short term so you don't eat into your seed money, you need something to live on for the next 6 months.

- Be realistic with capital required. If your initial costs are £35K you'll need over £40K at first to cover the VAT as well which is only reclaimed later. You'll also need some working capital and something to live on in the first few months.

- Download the free E-book by Geoff Burch at http://www.geoffburch.com/goitalone/index.php . It is VERY quirky, rather than telling you what to do or what not to do it might spark some thoughts in your brain and help you to mull things over.

chickmug

I have spent years involved in the sales of small businesses and touched on many who have talked of very bad experiences with franchises. So my advice would be tread very very carefully as I can't recall any expect one guy who bought one of the national fast food franchsies, and invested £500,000, who met with huge success.

MDUK

there is an interesting section on UK business forums about franchises, lots of stories about blowing redundancy money on franchises - nuts and crisps seem to come up a lot! (TBH i think the phrase "a fool and his money are easily parted" is the reality here though) i have 2 franchises with the same company - not going to make me a millionaire but is providing a good income, wouldn't suit everyone as you really need to have some knowledge abouth this industry before hand, but the main things that atrracted me were, the initial franchise fee was not ridiculous nor were the ongoing costs, support was OK (not brilliant, OK, even with a franchise it is your business and will only succeed if you put the effort in) and i rang several franchises at random before committing and feedback was fairly positive.

Don't rush in, speak to other franchisees (ring at random, dont' take the ones they feed you in isolation) and do lots of research about the market you are considering