So, how does market research help becoming a franchise business owner?
A franchise business is a business in the first place. Just because someone else is providing you with the products and the setup doesn't mean you have less works to do. Any successful business venture requires a lot of hard work including product research, market survey, area survey, risk calculation and so on. Any business involves taking some risky decisions, but your goal as a new entrepreneur trying to set up a successful franchise business should be to minimize the risks. Remember, the winners do not chase profits; they make sure they minimize the risks and cut the losses. Calculated risks are always good, but taking them are easier said than done. In order to take calculated risks and wise business decisions, you need to need the product, market and business area in and out. So, how to carry out an ideal market research for a successful franchise business owner?
Knowing your product is essential for a successful franchisee
Carrying out an extensive, quantitative research is the first step of any business. Once you have a tentative product or product category in mind (for example, foods and beverages, or fashion garments, or whatever else), start researching it. Spend some time to know your product in and out. Ask yourself questions like:
- Why did I choose this product category over others?
- Why did I choose this particular brand?
- What kind of target audience will I have? Or, what kind of customers will buy this product?
- Is it a seasonal business? Are there special seasons when the sales are likely to go up or down?
- Sales highs are great. How do I plan for low sales periods?
- What are other entrepreneurs' experiences with this product?
- Does it have a great business record so far? (Note: Bigger companies are like large cap equity investments. They're less volatile, but yield lesser returns. Small and medium business ventures have years to grow, and ways to go; in a stable market they usually outperform larger brands.)
Do market & area research for franchise businesses?
Typical questions that a potential franchise business owner would like to ask himself or herself are:
- A routine question: Are there similar or competitor brands in the vicinity?
- Are you getting exclusive territorial rights?
- What kind of visitors and consumers frequent your locality?
- Are there related products being sold in the neighborhood, that could probably attract more business? For example, if there is a bookshop nearby and you run a cafeteria, there is a good chance of someone coming to buy a book, and then stopping a little at your place to take a look at the new purchase.
Market research tips and techniques for franchise businesses
I find the qualitative analysis and interview method very handy. Asking people out about your product in extensive, intimate interviews can be a real handy market research tool for franchise businesses. You can consider offering the subjects some gift hampers or something like that in return of their time and kind cooperation, besides a heartfelt thanks. Let us now demonstrate our franchise business market survey technique with an example.
Sample market survey for franchise business owners
Suppose, you have planned to go for a fashion brand franchise, and the target group is young adults. You can arrange interviews for several group of young adults of various backgrounds (rich, middle-class, employed, working part-time, unemployed, pursuing higher educations, living on their own, living with parents, single, in a relationship, spender, frugal, male, female...this list can be endless). Questions to ask in such a market research for franchise business can be:
- Some words, expressions, ideas, pictures to describe the product.
- Why do they buy the product?
- When do they buy the product?
- Is it a necessity or a leisure activity?
- Asking to visualize and personify the product.
- Frequency of window shopping, and actual sales.
- How do they compare the product or the brand with peer brands?
- Suggestions for betterments, if any.
What are your franchise business market research tips?
Can you contribute to the list or enrich us with some great insights? We would love to hear from you. Leave a comment below and let us know about your unique market survey methods for successful franchise businesses.