The Merits of Doing Thorough Research Before Purchasing a New Business or Franchise
In the US legal system, there’s a process known as due diligence. It’s used to describe the process in which someone takes to research something they are buying or selling. It’s the information they find out, as well as specific steps they take to find that same information. However, due diligence isn’t something that should be limited to the law or how you come in contact with it; it’s also a good step to keep in mind for all aspects of business.
Before opening your store, before hiring an employee, before signing on with a lease, etc. You should do your research and find out as much as possible. This not only gives you a well-rounded view of your venture, it prepares you for anything that might come your way.
A business is a big investment, and an important one. Would you buy a house without having it inspected? Or a car without seeing what type of background it has? So why would you buy a business without learning all about its past? It’s another important life investment, and learning as much as possible will allow you to be the informed buyer. (Which will also prepare you better for negotiations or potential sticky situations.)
You’ll need to look into a franchising brand’s history, thoroughly look at contracts, and more. This ensures that you are approaching your brand with as much information as possible. It takes away the element of surprise (in business, even a good surprise can be a bad one – simply because you didn’t know it was coming) and leaves you ready for every next step. Because you’ll know exactly what that will be … and what to do about it.
By being an informed business owner, you will become more professional and more knowledgeable about your venture. You’ll know who to call or what paperwork to reference at all times, and in the event of any type of disagreement, you’ll know exactly who to contact and what about.
Knowing more, and showing what you know or how you learned it, will add an invaluable layer of professionalism. Your franchising brand (or potential franchising brand) will see your initiative and your ability to learn about your investment. It’s a step that will bode well for your efforts. Future customers, employees, and more, will recognize these same aspects, and know you’re serious; you aren’t just there for something to do. And in the process, you’ll gain their trust and additional business.
Earning a reputation as “the guy/gal who knows what they’re doing” is priceless; the more who hear this as your not-so-official title, the more who will come and see what you’re all about.
Another way to look at it, is that research allows you to fully understand what you’re purchasing. Think about it in smaller terms: the better you know your weed eater, the easier it is to use. You can do more with less effort. The same is true of your business. The more you know, the easier it will be to accomplish tasks, to know which tasks to take on, and to get them done as efficiently as possible You won’t be learning the hard way because you’ve already learned what to do.
Finally, knowing what you’re getting yourself into will allow you better peace of mind. You’ll sleep better at night knowing there will be no sudden changes, and that you’re fully informed about your purchase.