Small Franchises

Guide To Owning And Operating A Small Franchise Business

For emerging entrepreneurs leaning toward buying a franchise opportunity, size can make a big difference in how your operations runs. Many people think that they have to buy the biggest franchise their budgets will allow in order to be successful, however small franchises offer advantages that do not translate to the scaled up version of the business model.

Small Franchises Are Less Complicated

Red tape, chain of command, corporate hierarchy – call it what you will – small franchises have a much simpler organizational structure, which means less time and energy is required to keep things running smoothly. For small franchises dealing in goods, it means less money needs to be budgeted for staff, supplies, equipment, and logistics. The smallest franchises can be run out of a home office, and the overhead is minimal, which allows franchise owners to maximize profits.

Small Franchises Offer More Flexibility

Without the aforementioned layers within the corporate structure, small franchises have the flexibility to try out new ideas and methods for making sales, attracting customers, and exploring more efficient operation methods. Larger franchises focus more on uniformity and have more rigid rules, and while that level of consistency is the hallmark of large franchises, small franchises have more leeway in creative thinking.

Small Franchises Are Easier To Obtain

Large franchises can range will into the tens or hundreds of million of dollars simply for the initial buy-in. This does not account for equipment, the possibility of ground-up construction, and other expenses before the franchise launches. Small franchises offer business opportunities that can range from a few hundred to a few thousand dollars.

Small Franchises Can Have A Higher Profit Ratio

People see large franchises and immediately think they will get many times the initial investment in return. By and large this is true, if you are simply looking at dollar amounts. The larger the franchise, the larger the cost of sustainability. The more people and things needed to run a franchise, the lower the net income. Smaller franchises, on the other hand, may not have the super huge revenue numbers, but the amount of revenue generated compared to the overhead cost usually comes out to a much higher ROI ratio.

Small Franchises Are Usually Newer

That is, small franchises may not have been in existence for all that long. While there is the risk of smaller franchises not having their methods down to an exact science, there are advantages to getting in on the ground floor, because there is greater potential to influence things at higher levels.

The Personal Connections

The larger the organization, the less opportunity there is to connect with employees on a personal and professional level. The same can be said about customers. If you look at a large corporate organization, the odds of them remembering their customers is very slim. With small franchises, there is a greater opportunity to learn about your clientele and tailor things to what they like, and build that special business-to-customer relationship that translates to long-term patronage.

Customers Like Having An Alternatives

While large franchises may have the momentum of name brand recognition, customers are always looking for an alternative to the competition, and are more willing to give new companies a chance, rather than shoveling money to the larger franchises – at least at first. It is always up to the smaller franchise to deliver above and beyond to carve out a space in any market that is dominated by larger franchises.

Adaptability

Small franchises are, in spite of financial power – more adaptable to market changes than larger organizations. Smaller franchises can configure themselves to appeal more to their local customer base, while larger organizations pride themselves – and rightfully so – in providing the same goods and services everywhere they exist.

Small Franchises Are Less Streamlined

This may sound like a point against small franchises until you consider the psychology of small franchise owners. Most people buy into small franchises because they want to break away from the corporate mentality and no longer want to be a drone in a large beehive. If they buy into larger franchises, they might find themselves in an organization that is exactly the same as the situation they wanted to get away from in the first place.

Small Franchises Have Higher Retention

It may not come as a surprise that many large franchises have a high turnover rate. This is not a mark against large franchises, it is simply a common characteristic of any large organization. In a large business, with lots of positions, people get promoted, retire, and transition to other careers very frequently, and the same goes for franchises. With small franchises, the people tho buy into the system are usually hungry to establish themselves, and take pride in owning a franchise that is part of a growing organization.

The Best Small Franchises

Small franchises exist in almost every industry. The trick is doing the research to find up and coming franchises with (to date) successful track records. Small franchises usually have very specific focuses within a market which makes it stand apart from similar businesses, while not directly competing with the bigger brands. For instance, no new small franchises offering burgers are going to go head to head with any of the larger corporate chains. That would not be a good business decision, to put things mildly. However, when a small franchise offering gourmet burritos took the stage, it was able to carve out a good chunk of the fast food market for itself and grow its brand very quickly, while not coming in direct competition with any of the popular burger franchises.

Qualities Of The Best Small Franchises

When researching small franchise opportunities, ask yourself some critical questions. Would I be proud recommending these products and services to friends and family? Is my franchise connecting with the community? Is what I’m going having a positive impact on the economy? Is my small franchise safe from a drop in the economy? Will my franchise offer me satisfaction and allow me to become truly financially independent, so I can live the life I want? By going through this checklist, you will be able to narrow down the available small franchises and find the one that is right for you.

Forward-looking Market Trends

One of the biggest keys to picking small franchises is to try and create a forecast from emerging market trends. It was not too long ago when coffee was nothing more than something we picked up at convenience stores and added cream and sugar to taste. No one really gave thought to a small franchise becoming synonymous with everything from coffee to lattes, as well as becoming a social hub that generates many hundreds of millions of dollars in revenue. Similar things are happening all the time, and it is just a matter of seeing how markets are shifting and what consumers are “discovering” to stay ahead of the curve and decide which franchise is going to offer long-term revenue to give you the freedom and satisfaction you want from owning a business.

Support Systems

Almost every franchise offers some form of support network. In large franchises with many people, that may mean never speaking to the same person twice when you need answers or help with problems. Small franchises, by contrast, should be able to offer one-on-one support so you can build a rapport with people. This way, they can tailor solutions to help you through your specific situation, rather than holding fast to the corporate line and offering streamlined solutions.

Getting To Know People In The Company’s Infrastructure

As stated earlier, dealing with people at higher levels in larger franchises does not mean you will always be dealing with those people. There are so many people that it is as impossible to keep track of their names as it is for them to remember every single franchise owner and the employees under them. With small franchises, you can easily learn the names of the people in the company chain, and what their function is, so you can go directly to those people instead of getting bounces around before you see results or find someone who can answer your questions. Smaller franchise businesses also have a clear delineation of functions so you can easily understand how the company operates from the top on down.

Small Business Opportunity Similar To A Franchise

If you are looking to launch a small business with nearly unlimited earning potential, the Commercial Capital Training Group (CCTG) has what you are looking for. CCTG offers the training and tools necessary to launch your own business in the world of commercial finance – bringing lenders and business owners together to work out financial agreements and earning a considerable income in the process.

CCTG offers all of the benefits of a small franchise, by giving you all of the tools, marketing, and branding you need, combined with the flexibility and leeway to be creative about bringing parties together in agreement to make a deal. We also offer one-on-one support around the clock, and you will learn who everyone is in our company and what they do before you graduate, and our doors are always open for your questions, and to help you overcome any challenges you might face.

What sets us apart from franchises is that the business you launch is completely yours, as is the revenue you generate. We give you the ability to work as much or as little as you want, from the comfort of your home, with nearly unlimited income potential.

If you would like to learn more, or if you are fed up with working for other people and want to achieve true financial independence, contact the Commercial Capital Training Group Today.

Further Reading