Downturns in the economy can be seen as good times to invest in a franchise for a couple reasons:
1 – There will be less competition for resources
2 – A positive or negative economy will bring up new customer needs. And customer needs are at the core of any business
Timing can result in a number of benefits for the start-up entrepreneur: lower borrowing rates for start-up capital, cheaper equipment costs as businesses sell off surplus inventory or lower lease rates as landlords scramble to fill empty spaces. Not all of these necessarily come to fruition at the same time, but you will see one or more opportunities.
Even in good times, 20% of new businesses, franchises and independents, fail to get past their first year, according to federal statistics. Tough economic headwinds present even greater challenges.
There will be industries that are winners, and inherently others that are going to be losers in both tough times and good times. We have seen this through the last two years of the COVID pandemic. Determining what customers need now is crucial to your decision to invest in a franchise and your success as an entrepreneur.
Our biggest concern for anyone who decides to invest in a franchise is that we don’t want to see them set up for failure.
Five Questions Before You Invest in a Franchise:
- Have I identified a need that customers have as a result of the current crisis?
- Can I serve this need in a way that is substantially better than the current alternatives?
- Am I qualified to solve this customer problem?
- If I don’t have the experience, can I hire others or find a co-founder to help me?
- Do I have access to funding that can tide me over until my business is profitable?
Ask yourself, does this franchise opportunity address a current or impending need.
Contact Us To Explore Further