smallbusiness.co.uk: Helping your business think big

In the small business world franchising can appeal to two types of people: those starting out who want to work for themselves by operating a franchise and those who already have established a small business and now wish to expand the concept further. Both should consider franchising as a way to achieve their ambitions.

Talking about the first option Ted Dewar-Healing, co-founder of a new website that gives advice on franchising, extols the virtues of buying a franchise over starting your own business from scratch. He points out that less than half of small businesses survive the first three years of operation, while more than 90% of franchises are still going after the same period.

He spells out the thought process that an individual should go through before deciding to buy a franchise. The first is to be absolutely sure that you no longer want to be employed anymore. Then you can choose between starting your own business from scratch and taking on a tried and tested business format.

Once you have decided to take the franchise route, Dewar-Healing advises taking time to investigate the history of any potential franchise, finding out how long it has been going and how successful the original, core business is.

The main asset that you are buying with a franchise, he says, is the "operations manual," which basically is the "system" for running the business. This is a comprehensive document, covering "anything and everything from when you turn the lights on in the morning to when you turn them off again at night."

Turning to the second option, Dewar-Healing says that for existing small businesses franchising is an "excellent means of expansion." If you believe that the business model you have set up could work again, it may be worth franchising it out.

To do this, he suggests testing that your idea can be "duplicated" (i.e. someone else can make it work without you). The best way to do this is to set up a "pilot." This involves setting up a second branch of your business and letting someone else, generally an existing employee or someone known to you, run it using your business format.

People wanting to know more about buying a franchise or small businesses looking to start one should visit www.franchiseadvice.com for more details and advice. The site also contains a comprehensive directory of franchises available to buy.

The British Franchise Association acts as a watchdog for the industry and has over 200 franchisors as members. More details can be found at www.british-franchise.org.

See also Franchises.

(17/6/02)

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