Many home based franchise opportunities exist, though they vary widely in their quality. Too often, franchisees fail to thrive in their home based businesses, and may even lose a big chunk of their retirement nest egg (and some even lose their life’s savings). The reasons behind the failure of any particular franchised business are varied, but you will almost certainly lose your shirt if you don’t choose a quality franchise and don’t take the business seriously. A home-based franchise is still a business and requires a high level of commitment, time, and energy in order for the franchisee to achieve success.
Your Effort, Your Profit
A common issue with home based franchises is that they can feed on a prospect’s ego – the “I can do that” imagination that doesn’t take into consideration the effort required to build up a thriving business. The success of a home-based franchise is strongly related to the work output of the franchisee. For instance, if you choose to run a janitorial franchise, it will be up to you to pick up the phone and start calling prospects, to network in your community, to pass out business cards, and then to perform the cleanings you book or schedule your employees appropriately. If you don’t pick up the phone and start making calls, or get in your car and head down to a networking luncheon, you’ll never get any clients.
Don’t get trapped in a fuzzy day dream of an easy home-based franchise that will operate itself or be “fun”. I know of one popular interior design franchise that preys upon prospects, usually women, who have always felt like they had a knack for interior decorating. However, having a knack for decorating doesn’t mean you also have a knack for marketing your services effectively, dealing with client complaints, billing, paying your vendors, and bringing in enough income to support yourself.
Some home-based franchises, like the interior design franchise, primarily make their money from selling franchises, not through profits generated by franchisees. The interior design franchise knows that a majority of franchisees will flame out within the first few years, but they still make a pretty penny selling the concept to new, excited franchisees who haven’t done their homework.
If you aren’t serious about your home-based business, you can easily flame out of almost any franchise, including some of the most popular home-based franchises:
- Home based distributors (ex. cosmetics, vitamin supplements, confections, etc…)
- Headhunters (Don’t be fooled by the line “All you need is a phone!”
- Insurance sales
- Tutoring
- Senior care
- Carpet cleaning
- Maid and janitorial services
Your franchisor may provide marketing support, give you a business card template, and help you establish a website, but the majority of the work is up to you. The more time you take off from your business, the harder it will be to establish a strong customer base and make the profits that you seek.
Also, and most importantly, a home-based business is still a big investment, which deserves a lot of consideration before you sign any contracts. Make sure you do your homework when searching for the right franchising opportunity for you. That means reading The AAFD Road Map to Selecting a Franchise