Assess Your Franchise Skills and Financial Capabilities

Did you know that in 2020, 64% of British people dreamed of starting or taking over a business? In 2023, the UK saw a rise of 19.5% in new businesses. If you also wish to achieve such success, you first need to assess your skills and financial capabilities. It will set you on the right path toward the most suitable and profitable industry and sector for your business.

Assessing Your Entrepreneurial Skills

Before you embark on creating a franchise in the UK, you need to determine your entrepreneurial skills. While we always encourage you to follow your passion, it’s best to understand where you’ll succeed the most. You can perform this evaluation either formally through education and research or informally through self-evaluation.

In this way, you’ll accomplish the following:

1. Clarify your vision for the franchise
2. Understand your motivation for starting the business
3. Grasp the practical implications on your life
4. Determine how you can transfer your current skills to your new venture

Let us guide you through each of these steps to help you in assessing your skills.

Clarifying your Franchise Vision

Your first step on this entrepreneurial journey is to formalise your vision for your franchise. To do so, you need to reflect on some key questions. Which tasks and missions do you wish to accomplish? Do you expect a certain work-life balance? Is there a specific income value you have in mind? Are you searching for some form of social recognition?

There are two goals with this approach. First, you’ll see how well your vision meets reality when you have your initial interview with franchisors. Also, you can reassess your objectives and expectations to prevent disappointment in the future.

When you work on your franchise vision, remember to keep it SMART: Specific, Measurable, Achievable, Relevant, and Time-Bound. This method will help you keep your goals realistic. We’ll explain how you can use this approach in franchising in more detail in another guide.

Understand Why You Want to Start a Franchise

The next important question to unravel is why you want to start a new franchise business. Your motivation goes a long way in driving you toward success. Knowing this answer, you’ll have a better idea of which industry to target and have better discussions with potential franchisors.

Here are some questions to ask as a starter. Are you seeking independence or financial wealth, or both? Do you want to develop an asset you can pass on to your children as your legacy? Perhaps you are looking for a new challenge in your career.

Whatever your reason, understanding your motivation is fundamental to an effective and successful start of your franchise. Here’s why:

1. Not all franchisors deliver a fast return on investment
2. The level of independence differs between brands and sectors
3. You may need to sacrifice a lot of personal time, which can impact your work-life balance
4. Your children may have no interest in the franchise brand or sector you choose

Once you know your motivation and still see a future starting a franchise, the rest of the stages will run smoother.

Practical Implications on Your Life

Starting a franchise is a major step in your life. Indeed, it’s a new challenge that will impact your daily routines in many ways. In this step, you’ll question your franchise vision and see what skills and knowledge you need in the required profession or sector.

For the most part, you’ll need skills in admin, financial and accounting management, marketing, sales, and business management, to name a few. What’s more, you’ll need commitment to the job, empathy, leadership, and the ability to adapt to sudden changes.

Essentially, you’ll take on two roles: one as a business manager and the other as an exerciser of franchise brand tasks, such as catering, personal services, or retail. Be sure you’re ready for the toll it will take on your work-life balance.

Transferring Your Current Skills to the New Business

The final step in this process is to look at the list of skills and knowledge you identified earlier and see which ones match the ones required by the franchise. In this way, you can see which ones you can transfer to the new business.

In essence, you're creating a SWOT analysis. You are identifying Strengths, Weaknesses, Opportunities, and Threats, all of which will help you succeed in your new venture. Not only will you see which skills will help you succeed, but you’ll also find the gaps you need to fill.

Don’t worry if you pull away at this point. Franchising isn’t for everyone. You need resilience and a strong entrepreneurial spirit to cope with what’s coming once you start the ball rolling. What’s more, you need to be able to withstand a significant amount of stress while being proactive and reactive.

You also need to keep in mind the level of independence as a franchisee. While you’ll be freely managing your business, franchisors have strict requirements for their brands. That means you may need to take instruction from them from time to time.

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>> Read also : Do You Have the Profile of a Franchisee

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Steps After Assessing Your Skills

Now that you have assessed your skills against those needed by franchises, what do you do now? Well, you have three options available:

1. Match your profile with appropriate franchises: By aligning your skills with the right sector and brand, you are aligning your expectations with the franchisor’s needs.
2. Address skills gaps: If you see a franchise or brand you like, you can get training on any missing skills the franchisor requires.
3. Target your passion: Remember to search for brands or sectors you enjoy working in, no matter what your identified strengths or weaknesses are. You can also build on these strengths and fill in the gaps.

Some franchisors offer training to new franchisees because of brand-specific skills. See if this is available instead of searching for external training.

Evaluating Your Financial Capabilities

Starting a new franchise takes more than having the skills and filling the gap. In most situations, you also need to have some capital to invest in your new business. With this initial franchise investment, you will have the leverage to take out a business loan.

Here’s a golden rule to learn: Don’t invest all your savings and become poorer to start a business. At least the risks are lower with an established franchise than starting a new venture from scratch on your own.

Here are some options to consider when assessing your financial capabilities:

• Select franchises within an appropriate budget: In other words, make sure you can afford to pay the initial investment without losing your home.
• Look for financial partners: If you find someone willing to help pay the entrance fee, you may have more franchise options available to you.
• Discuss financial payments: If you really love a franchise or brand but the investment fee is not affordable to you, meet with them to see if they will accept a payment plan.

The final option is riskier, but some franchisors have financial services in place for just such occasions.

It’s Time to Find a Suitable Franchise!

Now that you’ve assessed your skills and determined how much you can afford, it’s time to look for a suitable franchise. The next step is looking for the right sector for your business, which we will cover in a different article. Congratulations on taking this vital step toward your new venture!

>> Lire aussi : How to evaluate whether a franchise opportunity is right for you