While making money should be at the very top of your list of goals when starting a business or franchise, it should not be the only thing you consider.     You certainly want to thoroughly research all of your options before selecting a particular business or franchise to purchase.   As part of this research, it is wise to spend some time doing some self-analysis and also take an objective look at types of businesses you are considering and the market factors influencing each.

Self-Analysis

Here are some great questions to ask yourself and your family members —

  • What do I like to do?   What are my hobbies, interests, what makes me happy?
  • What do I know how to do?  What are my experiences, both professionally and personally?
  • What am I good at?   What are my strengths and special skills?
  • Are there particular industries that I am drawn to (i.e. auto, healthcare)?  Why?
  • Am I ready to accept the responsibilities that come with being a business owner?
  • Have I spent some time talking to business owners to understand what it takes to run a business?
  • Are my family and friends supportive of my decision?

By taking the time to think about and answer these questions, it will help you understand two things.  First, am I cut out to run my own business?   Secondly, if the answer to that question is “Yes”, then it will help you figure out what type of business might be best suited for you.

Market Research

Any successful business must do one of the following things — satisfy a need OR solve a problem OR respond to a trend.  Before buying a business or franchise, think carefully about whether there is a market for the product or service your business will offer.   Here are some good questions to ask –

  • How many competitors are in your market area?
  • What are the strengths and weaknesses of your competition?
  • Is the market area large enough to support this number?
  • How can you differentiate your business from the competition?
  • What will make your product or service unique from the competition?
  • How does your location stack up versus the competition? Particularly important for food or retail business.
  • How many potential customers are in your area?
  • Will your product or service be in demand?  Does it satisfy a particular need?  Does it solve a particular problem?  Does it respond to a particular market trend?

Doing solid market research takes time, energy, and patience.   Don’t short-cut this step!   If done correctly, it will clearly provide you some very useful information which will lead you down the most appropriate path.    Also, don’t let your heart overshadow the facts and figures, don’t let the decision be all about emotion — just because you’ve always dreamed of opening up “your own cute little ice cream and cupcake shop”, does not mean that it is the RIGHT business for you to invest in.      Only thorough research will allow you to sort this out.

 

Remember the old saying — “measure twice and cut once” — when buying a business, it is wise to “measure four times and cut once!”  We wish you all the best and look for future blog posts on other smart tips to help guide you through the decision process of buying a business or franchise.

 

  • Author: Matt Maxwell
  • Date: Jun 27, 2012
  • Category: Buying a Franchise or Business
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