Starting a new business is a huge step in anyone’s life. This is true both for starting an original business and starting a franchise. What’s even more important is the fact that it’s not something that will affect only you. It will require a major financial investment, which often means that you’ll probably have to apply for a loan. Sometimes, this means using your home as collateral or having to face a prolonged period of loan repayment which will force your entire family to lead a more austere life.
On the other hand, you should also be aware of the fact that about 38 percent of these entrepreneurial passion projects are funded by friends and family members. In other words, you may be asking for more than their support and endurance. Instead, you will be approaching them as the investors in your enterprise, equity owners or potential partners.
Even aside from financial reasons, there’s so much emotional baggage that comes from running your own business. You see, while you’re running a business, you’re going to be less available and more stressed out. The people around you might be able to sense this, which means that running a business might affect your social and family life. This is why, your family needs to be on your page, as well as provide you with all the support that you need. Now, one of the best ways to persuade them is to give them a compelling reason why buying a franchise is a good idea. Here are several best arguments that you can use in this kind of situation.
1. You have a business plan
When buying a franchise, you’ll already cross so many items off the list. For instance, you already have the business model, the appropriate venue type and the marketing figured out, however, you still need an executive statement and a traditional business plan. This is especially true if you intend to ask your friends and family for money. In this case, they’re assuming the role of an investor and you need to treat them as such. Keep in mind that your business plan needs to be situation-specific, seeing as how, in this particular situation, it is more of a persuasion tool.
One of the ways to get there is to start with your short- and long-term goals. Setting milestones and deciding on appropriate metrics is one of the most important things to do in this particular situation. The franchise that you’re buying already has its own set of corporate values, however, you need to develop your own mission. This alone might also help get your family on your side by vividly illustrating that you, indeed, know where you’re going. Sure, their involvement and assistance are more than necessary, however, you are still the person at the helm, which means that you need to show them that you truly see the big picture.
2. You know exactly how much money you will need
A lot of people make a mistake of making a crude estimate of how much money they’ll need in order to start their own business. The initial investment is something that’s quite easy to calculate but even here people often go wrong. Other than this, you also need the working capital (your business is not going to be self-sustainable from day one). Aside from this, you also need to take into consideration some home capital in this period. You see, until your business is profitable, your personal income will not be that great. So, you need some money to survive until this point.
By providing your family with such an accurate breakdown, you’ll impress them with your preparedness. Remember, it’s not necessarily the figure that you need which worries them but the notion that you might have overseen something crucial. One more reason why this is such a great idea when it comes to buying a franchise is due to the fact that the initial investment and work capital calculation are already out there for you to consider. In other words, you have a much larger base of information to research than your counterparts starting original businesses.
3. The risk is lower
One of the first arguments that the majority of people opt for when it comes to buying a franchise (when compared to the idea of starting an original business) is the fact that the risk is somewhat lower. The reason for this is due to the fact that you have a head start and there’s not nearly enough unpredictability down the path. As we’ve already mentioned, the business model has proved to be effective so many times over, which means that as long as you understand the needs of your target audience, you should have no problem in making it.
Still, you need to understand that no business is without any risk. Sure, franchises fail less often than original businesses but this doesn’t mean that buying a franchise guarantees success in any way. In other words, this too is something that you have to mention to your family. Remember, you’re trying to persuade them to support you, not manipulate or trick them into doing so. In order to show them that you’re indeed honest and forthcoming with them, you need to give them the ugly side as well. After they hear it all, if they’re in, they’re really in.
4. Develop a proper understanding of the franchise
Being familiar with the franchise in question hardly qualifies you to make it into your bread and butter. In fact, in order to provide your family with the proper assurance that you’ve thought this through, you need to get as familiar with the franchise before you buy it. Start the negotiation process and contact other franchise owners in order to get some insight. Provided that you contact a franchise owner in a different neighborhood or city, you’re in no way their competitor, which means that they have no reason, whatsoever to withhold any vital information from you.
Apart from this, you also need to understand the industry that you’re getting involved into. For instance, let’s say that you’re interested in getting involved in the hospitality industry and that you’re looking towards a brand. With some brands, like the abovementioned, the application deposit is completely refundable, which means that you can even start your journey down this path and change your mind somewhere along the way without having to face any kind of financial repercussions. This alone will help you feel a lot safer and it might just be the reassurance that you desperately need.
5. Make a payment plan
The next thing you need to ensure is that everyone is taken care of. Call this your own little contingency plan. You see, you’re hoping for the best but this definitely doesn’t mean that you can ignore the likelihood that things won’t go your way. The last thing you want is to impoverish your family or fail to return the money to the relatives who’ve borrowed you the initial capital. So, make a schedule of how and when you’re going to get everyone their money back. The first payment should probably be scheduled as early as six months after you start running.
Speaking of contingency plans, you also need to have the worst-case scenario and even put all of the “what ifs” down in writing. This way, you’ll give them the necessary reassurance that they needed all along. Even if your investors are close family members it’s usually best for everyone if you were to have a legal document to ensure that things stay in place.
6. Allow them to take an active part
One of the most disturbing notions that your family members will encounter once they start seriously considering your idea is the thought of being left out or left behind. What this means is that you need to allow them to take an active part in your project, thus helping them stay motivated and helping them keep fate in your idea. Sure, you can employ some of your family members but others can perform all sorts of supporting roles. If some of your family members are investors, you need to start treating them as such. This means regularly reporting to them on the progress of your business. This will help mend their concern over your wellbeing, as well as their concern for your business (and their investment), as a whole.
However, keep in mind that nepotism is a slippery slope and that no matter how much you want to involve them, sometimes you need to hire professionals for the job. If a dear family member lacks the qualification for the position, you need to find someone else. Also, don’t try to hire them because you hope that they won’t mind getting underpaid or underappreciated in your employ. This doesn’t just make you a bad employer and a bad person but also creates a hostile work environment and permanently deteriorates personal relations.
7. Tell them about all the support
The advantages of starting a franchise business are more than straightforward. First, you get all the operational support you can get. Second, you don’t have to start building your brand from scratch and finally, you get a lot lower risk of running a business. All you have to do is make your family understand just how big of an advantage this makes for in the business world. You see, one of the biggest concerns that your family will have is the idea that you somehow lack the experience to manage all of this on your own. Fortunately, by buying a franchise you’ll never actually be on your own.
Also, you need to understand that some franchises help you with everything ranging from choosing and preparing the real estate for work, all the way to training your staff. As you may have noticed, both of these issues are pivotal for the future of your enterprise and your entire experience in the business world, as a whole. By helping them see things this way, they’ll be much more comfortable with following your lead.
8. A part of the community
The last argument that you have to offer to your family is the fact that, by owning a franchise, you’ll become a part of the larger community. We’re not just talking about exploiting brand recognition but also about the fact that you get much more leverage on your side. For instance, as a part of a larger community, you’ll have someone to negotiate the prices with the supplier in your stead. Keep in mind that this goes for any kind of purchase, ranging from fitting out your headquarters all the way to acquiring work materials.
Apart from this, should you feel the need to talk to consultants and experts, chances are that the corporate will already have someone who specializes in their own dealings. This way, you can handle this issue in a semi-in-house manner, instead of having to completely outsource the issue. Seeing as how you already have to share your financial record with the corporate, chances are that they’ll have an incredible insight into your dealings. An expert’s opinion can truly be a breaking point for those who doubt your in-depth knowledge in the field.
At the end of the day, you’re the one who knows your family the best, which means that you need to be the one who will pass the judgment on which arguments will work the best on your family. For the pragmatists in your family, you need to speak through numbers and logistical topics. When it comes to those who are a tad easier to scare, you need to find all different sorts of reassurance, even if it means resorting to franchising statistics. All in all, you are definitely not restricted to a single argument. Each of the above-listed reasons is more than convincing and the combination might just give you the best results.