For every new franchise that falls out of popularity, a new one takes its place, sometimes even built upon the literal ashes of its predecessor. Why do some businesses take off while others sputter? Why do some franchisees flourish while others, despite the training and help they’ve received from their franchisor, fail within a few years? Part of the fault may rest in the hands of the franchisees themselves, some of whom had no idea what they were really getting into when they started the business.
So what does it take to succeed? Research we conducted at PsychTests reveals the important traits, skills, attitude, and habits that every would-be franchisee must have.
Collecting data from 298 prospective and existing franchisees using our Franchisee Aptitude Test, we focused our analysis on 29 successful franchise owners. Our goal: To determine what makes them so special.
According to our study, successful franchise owners have certain habits that set them apart, from the way they manage staff to how they deal with failure. Here are the top ten:
1) 83% adopt a creative approach to problem-solving. Rather than relying on old solutions to problems, they brainstorm new solutions. They also encourage initiative and welcome innovative ideas from their staff. Given that employees are in constant contact with clients, they are often privy to valuable insight that can help improve customer service.
2) 83% are fully committed to working hard. They accept that the first few years after opening a business are the most difficult, and are dedicated to putting in the effort and the hours necessary to get the franchise off the ground.
3) 79% of successful franchise owners make a point to learn new things, whether it’s staying on top of the latest business trends or brushing up their skills as technology continues to advance. They understand the importance of keeping their skills up to date, from hiring practices to marketing strategies.
4) Before taking a risk, 79% will do some research in order to truly understand what they are getting themselves into (e.g. the costs, potential consequences, odds of success, etc.). Every decision they make is carefully analyzed and weighed in terms of its benefit-cost ratio.
5) 76% understand that the franchise world is a social business. Successful owners don’t stay locked up in their offices; they are actively involved in the day-to-day operations of their business and enjoy getting to know their customers. Most importantly, they make sure to put in a little extra time and effort, even if it’s not required, to make sure every client receives the best possible service.
6) 76% understand the importance of keeping their staff motivated. Motivation is inextricably linked with morale, job performance, and job satisfaction, and successful owners make it a point to learn each employee’s individual motivational needs. They also delegate tasks and responsibilities regularly, and even when offering negative feedback, successful franchise managers offer clear ways to help their employees improve.
7) 76% consider it essential to maintain a positive attitude, particularly during difficult times. It helps the rest of the team stay positive, and encourages them to focus on what’s going right and how to get back on track rather than on what’s going wrong. Successful franchise owners also believe in themselves and in their ability to succeed.
8) 73% make it a point to maintain their professionalism at all times. It can be a challenge to stay calm and composed when dealing with difficult customers or unproductive employees, but successful franchise owners know that losing their composure, even if it only happens on the rare occasion, can have serious consequences. They strive to set a good example for others, both in terms of attitude and behavior.
9) 72% practice “transparent management”. They keep employees up to date on franchise goals and clearly state the objectives that each employee should be working towards on a daily basis. They understand that in order for a business to progress, it is essential to set bigger and better goals for the franchise and for the entire team to attain. Setting challenging yet realistic goals gives the team something to word towards and encourages self-improvement.
10) 72% take responsibility for their mistakes. They recognize that experiencing setbacks and obstacles is part of the process, and many of the franchise owners advise that failure in a general sense, especially after a first attempt, is simply a sign that a person needs to work harder, or try a different approach.
The prevailing belief is that opening a franchise is a lot easier than starting a business from scratch. This is true, at least to some degree. This is what draws many would-be business owners to franchising opportunities: The chance to be their own boss within the safety and stability of an already established business model.
What some fail to recognize, however, is that they still need to work hard, put in long hours, hire, fire and train staff, and take care of a host of other responsibilities. The franchisor will do its best to train and prepare new owners, but then it’s up to the new franchisees to take what they’ve learned and put it into practice.
Running a business requires more than capital – you need to have the right training, personality, skills and attitude. What our study has outlined are ten key factors that all potential franchise owners need to be aware of before they hop onto the franchise bandwagon.
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