Thinking About Opening Your Own Business?

January 23 - 2009

Thinking About Opening Your Own Business?
Tips for Starting a Franchise in a Recession

As the U.S. and global economies worsen, individuals may feel hesitant to start their own business due to financial fears, such as a possible loss of personal investments. However, opening a franchise with an already established brand, in a thriving industry, can be successful no matter what state the economy is in.

While many Americans are cutting back on “want” items, the “need” items remain necessary.  In underserved markets with booming populations, opening an established franchise that provides the community with necessary services and/or products that can help you create a profitable business, no matter what is going on at Wall Street. 

“During a recession, the common misperception for people looking to open a franchise is to wait until the market bounces back, and therefore miss available buying opportunities,” said Greg Helwig, chief development officer with Kiddie Academy, a leading child care franchisor. “Instead of looking at the economy as a reason whether or not to open a franchise, individuals should research industries and local markets to determine whether or not a franchise will thrive, as each industry is affected differently by a weak economy.”

For individuals interested in opening a business, Helwig offers the following tips:

Dos:
• Work with a good partner who will help facilitate access to financing. With the current credit crunch, finding a credible partner that can help with lending can make opening a business easier.
• Conduct thorough market research on your desired business industry. This will help identify local competitors, calculate the need for the industry in the local market and determine other successful businesses.  A good partner will have resources to support your research, as well as experience knowing what factors to consider.
• Align yourself with a credible brand. Benefits include smaller marketing expenses and an already established consumer base. Look for companies that have a proven business model, but also provide plenty of growth opportunities.  
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Don’ts:
• Don’t open a franchise in an industry that has volatile profit margins.  Instead open a business where the ROI remains consistent regardless of economic conditions.
• Don’t open a business that is susceptible to recession, such as high-end retail and mid-priced luxury products and services.  Markets like this tend to fluctuate.
• Don’t rush into anything. Research several franchise establishments to hear what they can offer to you.  Picking the right franchisor can make all the difference in the support you receive and the success that you achieve.
• Avoid companies/ industries with limited growth potential. Instead look for companies who have ambitious growth strategies and can present growth opportunity to their franchisees.  

For more information about opening a franchise in a tough economy or to speak with Greg Helwig, please call 410.515.0788.  For more information about Kiddie Academy, visit www.kiddieacademy.com.

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