When someone starts a new franchise business, the answer to the location of their business is always — my competitor’s customers will come from the front.
THAT is ERROR#1- Unrealistic Expectations.
ERROR#2- Undercapitalized:
The first step to being smart about setting up a franchise business is budgeting it. When you start a low investment franchise business, you must think about the monetary overruns of initial six months and should accustom yourself to the basic set up. Many times, startups run so close to the line that they fall short on credit to get by in case of a mishap. Which implies that they open their franchised stores with stress so much so they look at customers in the same way a hungry monkey looks at bananas with greed in his eyes. Their need for covering sales is heightened to the core that they’re blind to curb to the simplest job i.e. customer service.
ERROR#3- hoping world on a platter:
You can’t expect customers to come knocking on your door to buy your product. There are too many places to buy the same products at different prices – adapt and alter.
ERROR#4- Impatience:
This compiles with the second error, once a franchise business is set up they ignore the importance of training the employees let alone getting trained employees. With zero proper direction in sales, untrained staff and inconsistency in product development it may as well get people on the opening day but the only thing covering the rows of the store would be thin absentee air.
People would tweet, blog and yelp about their bad experiences on facebook scaring away potential customers. Remember: bad news spreads faster than fire.
ERROR#5- Location by price:
Even after being advised to do otherwise, startups also end up going to locations other than the ones being advised only to save up money at things like rent or so on the pretext that it may only hamper a little percentage of business. Right? Wrong! There’s a very evident reason why rent is cheaper. Wondered why things decrease in price? Because their demand goes down. You should never want to drop down and be 100 feet from success.
These things are not at all the reasons why a franchise business would frequently drop down but they sure carry a common message: TO LOOK BEFORE YOU LEAP!
In context, it is a very good thing to open a business, and to believe in yourself but one should always be cautious of his/her actions.