The Advantages of Home-Based Franchise Ownership
Running a business out of your own home is a goal shared by millions of Americans. Itís convenient, saves time and money, allows for inexpensive child-care options, and enables you to operate your business with much lower overhead because you donít need to lease office or retail space. There are currently 38 million home-based businesses in the United States, including 52% of small businesses, many of which are franchises. Industries such as home improvement and landscaping, cleaning and janitorial, marketing services, construction, education and tutoring, senior/home care, management, and financial consulting, have been thriving as home-based businesses. After all, when was the last time you needed to walk into a storefront or an office for a business that offers any of these services?
Before buying a home-based franchise, itís important to perform your due diligence and validation. You need to look at the benefits of running a home-based business and find the best franchise for you. You also need to know about financial considerations and know how to prepare your home for running a franchise. Beyond that, you need to look at the possible challenges you will face. "There are currently 38 million home-based businesses in the United States." Why Are Home-Based Franchises Popular? While you may not be able to create your own schedule entirely according to your personal life, owning a home-based franchise gives you far more flexibility than an average business. For instance, you can allow yourself some time off to run errands, attend personal appointments, transport the kids to and from school, accept deliveries and schedule home repair visits, all while being able to make up the work hours in the evening if necessary. You can still do these things with other non-home-based franchises, but it requires more planning and can be more difficult to coordinate because youíre further from home working a typically set schedule.
Flexibility is one advantage most entrepreneurs see immediately when it comes to opening a home-based franchise, the other is lower start-up costs. Renting office space or a retail unit can be expensive, especially when you factor in ongoing costs such as lighting, heating, internet, and more. Most home-based franchises also have a lower franchise fee and fewer working capital requirements. You may have to do some extra renovations to your home to add office space, increase your internet capabilities or add business insurance, but itís still less expensive than renting a new space.
Start-up costs are typically significantly less expensive for a home-based franchise. Buying a franchise, whether it is home-based or not, comes with its own set of unique benefits that make it an attractive investment. From the training and support provided by the franchisor to the ability to be part of an established brand with built-in customers, franchises have many reasons for being popular. Home-based franchises have all these inherent benefits and some that are unique to the business model as well. Daily trips to and from work can not only be time-consuming, but stressful as well. For many people, the work commute factors heavily on their decision to change their career. While home-based businesses still require travel at some point or other for meetings or to a clientís worksite, itís different than heading into an office every day. The commute time saved alone (on average two hours a day) gives you more time to do the things you enjoy, not to mention your savings on the cost of gas and insurance or transit fares.
You should consult an accountant after opening a home-based franchise because they can help you get the most financial benefit out of your business. Youíll be able to write off a portion of your home utilities, internet, and telephone as a business expense. Youíll also be saving money in areas you didnít consider, such as fuel, parking, and even dry-cleaning bills. Overall, you will realize significant savings.
Home-based franchises also provide for tax advantages and money savings. Many parents find home-based franchises give them more time for their families. From being able to drop their children off at school, to being able to stay home with them when they are ill, home-based business owners find they can do an overall better job parenting. On top of that, they can be around for meals and spend more quality time with their family in the evenings. In the long run, home-based franchises allow for a much better work/life balance.
To determine the right home-based franchise fit for you, make a list detailing your areas of interest, goals, and objectives trying to match them up with industries and business models that you might be interested in. Keep an open mind about it, because you may find there are industries you would never have considered otherwise. Itís also important to stay realistic because some interests/passions may not make a suitable business/career. Embrace your interests. By contacting a FranServe Franchise Consultant who can help guide you through the franchise acquisition process, as well as asking fellow entrepreneurs, you can find home-based franchise opportunities in your market. Do any of these make you curious to know more? Do they match your passions or interests? Keep track of any that could be viable options. Working w/your Franchise Consultants who can guide you through the franchise acquisition process, take a closer look at the franchises youíve found of interest to see if they are a possibility or not. Review the information they provide and determine if there are any financing or other issues that automatically disqualify them as being an option. If you canít afford the franchise, or canít meet any of their requirements, they arenít a match, and you should stop looking into them sooner rather than later.
Look at the opportunities available in your region. Research the opportunities w/the assistance of a Franchise Consultant. The key to any investment is finding the right one for you. After all, whatís good for one person, may not be so for another. The key question is, how do you find the best fit? While the answer isnít always easy, there are some things you can consider as you do your research.
It doesnít matter how much you like a franchise opportunity, if you donít have the necessary skills to run it, you wonít be able to succeed. While you may be able to learn the skills that are required, you need to be honest with yourself and re-evaluate if you donít think you can really do, or arenít interested in, the work/business. Working with your consultant, honestly evaluate your skills. You need to make sure the franchise offers what is most important to you, otherwise, you may end up unhappy with your decision. For example, is the schedule as flexible as you need it to be? Does it require any travel, and if so, are you OK with it? Do you require staff, and if so, is your home office able to handle it (or can employees be managed remotely/virtually)? Do you have enough storage space for supplies and inventory, or do you need to rent storage space? Would customers or clients ever need to visit your office? You also need to take into consideration whether you want to expand in the future, because if you do, you may outgrow your home office @ some point.
Once youíve narrowed your options to two or three choices, you will likely have many questions. While the Franchise Disclosure Document (FDD) will be able to answer a lot of them, the franchisor, or their franchisees (through validation calls) will still need to answer many of them. Questions about the amount and type of training you will receive termination rules and renewal options are most common. Itís important to ask questions, and itís important to get as much information as possible before moving forward so you can make an informed decision. Home-based franchises arenít for everyone, but if it seems like a good fit for you, make sure to find the right one before moving forward. By taking the time to get to know yourself and the franchise you are considering, you will be moving in the right direction and have a better chance at achieving the success youíre looking for. Get to know the business. Ask questions.
While home-based franchises typically have lower franchise fees, they do still have them. The fee will be noted in the FDD and will need to be paid early in the process. You should also be sure you are aware of and comfortable with the franchisorís estimates on the initial/opening costs. The estimates are based on their own experiences and the experiences of their franchisees. Itís important however to keep in mind that they are just estimates, and the numbers could be different from your own experience. Most franchises have ongoing fees as well, with the most common being an ongoing royalty fee. This fee is usually in the form of a percentage of the monthly sales but could appear in different ways. Other fees can include charges for technical support, audit fees, extra training costs, and advertising.
While itís true that home-based franchises have lower start-up costs than traditional businesses, they still have costs you will need to be aware of. While you wonít have to worry about renting or leasing office space, you will still have to equip your office with necessities. You may need to buy an office computer and printer, a new desk, get a business phone and/or line, increase your internet speed, pay for licenses, permits, and even office insurance. You might also have to renovate your office to make sure it has everything you need. This will vary depending on the type of franchise you are opening, but the least you can expect to purchase paper, pens, and other office supplies, as well as other fees, including shipping and postage. For the business itself, if you are selling physical products, you will more than likely need a certain amount of stock on hand. If you are providing a service, you may need specialized equipment to do the job properly. Itís important to keep track of what supply expenses you will have from the very start. Home-based franchises depend on advertising. From printing flyers and posters to buying ad space in print publications or on the radio and TV, to budgeting digital paid search advertising, your advertising budget will need to take into consideration the fact that you donít have a physical location marketing your business for free. This will depend on whether you have employees or not, but if you do you will need to budget for their salaries, taxes, insurance, uniforms, and more. The franchisor will typically assist and support you with all aspects of starting your franchise, including in-depth training.
Congratulations, youíve done it! Youíve gotten the financing arranged, created your business plan, signed your franchise agreement, and are ready to get everything in motion and start working from home. One thing you need to ensure you have paid enough attention to is getting your home office set up. This is key, because in the long run the happier you are with your home office, the greater your productivity will be. The office itself is potentially one of the most important aspects of the home-based franchise. For things to run smoothly and to create a distinction between home and work, you will need a dedicated space in your home where you can work without interruptions. This can be anything from an extra bedroom to a basement or an actual office, the key however is being able to get privacy when you need it. Itís important to let the people you live w/know what the expectations are when you are in and around the office so that you can be as productive as possible. In some cases, you may even need to do some renovations to make the space custom to your requirements. Another thing that will help keep work and home life separate is having a separate computer. It needs to be reliable, and able to meet the demands of your business. You should also have enough bandwidth from your high-speed internet to allow you to work without having to worry if someone else in your household is playing games or using a media streaming service. It goes without saying that your business will need a phone line of its own.