You’ve made the decision that you want to become an estate agent, and you’ve also decided that rather than work for an existing agent, you want to go it alone and be your own boss.
That’s already a pretty bold move and a brave decision. Going it alone is never easy, but we will assume for now that you’ve got a little bit of interest and knowledge in the property market and so have chosen estate agency as your goal.
But there’s another decision to make.
Do you go it entirely alone, or do you buy into an established franchise?
What is a franchise?
For many, the world of the franchise is still new. Fewer still know about estate agency franchises and how they work. But let’s start with the franchise model as a whole, first.
A franchise is a business model set up by a company that is usually looking to expand. The business is a set of procedures, systems, products and services that have been proven to work, and the franchisor then decides to licence this to others.
A franchisee can buy into this system and business and use the brand, the procedures and everything else that has already been shown to work. In effect, it’s a copy of the business, and if you like it, you can use it yourself.
Franchises are everywhere; you’ve probably even used them without knowing. A quick search on Google will deliver an entire list of franchises, and there are many great franchise examples that show just how well they work.
Filled up at a Shell garage? Bought a Domino’s pizza? Bought a second hand phone from CEX?
Some of the most recognisable brands on the High Street are franchises, and for good reason.
Of course, before deciding, we need to look at a few of the franchise pros and cons.
The benefit of the brand
Take a look in your local town centre for example. If a burger shop were to open up in the High Street, chances are they would have to work hard to build up their customer base.
Through advertising, brand and probably a lot of social media, they would work hard to get established.
They’d also have to make sure all the burgers were right, that the menu was fit for purpose, that they had the correct drinks, the tills worked, and the staff were all fully trained. They need to know what to stock, when and how weather affects their sales.
All of that costs money, experience, and skills.
If a McDonald’s set up next door, you can bet people would be streaming in on the day of opening, and they wouldn’t have problems with tills, staff training or menus because they’re all decided for them.
McDonald’s knows what works and they can train staff in other branches before they get to a new one.
The management gets thorough training about all aspects of running the business from marketing to sales to training and knowing what to order and when.
It’s essentially a process that has been worked on for decades, has been proven to work and can simply be replicated.
But, there’s even more to it than that.
A franchise business model also has a lot going for it when it comes to business intelligence.
If a business (in any market) were to set up in a town on their own, then they only have their own experiences to base their decisions on.
An expanding franchise now has more people out there doing the work and sending back information all the time, which can then be fed into the business as a whole.
In some ways, being a franchisee is the best of both worlds.
You get the satisfaction of being your own boss, with the very real benefit of having people around you to help and support your business.
Getting there quicker
There are many statistics available that give small business owners, or those considering starting a business, the shudders.
For example, something like 8 out of 10 businesses will fail in their first three years.
Even worse, it can take years for a business to get out of the constant grind phase and into a situation where it is running so that the owner can begin to take a rest.
Don’t believe the hype – running a business is difficult, and you need to be in it for the long haul.
You really won’t know how your business is going to fare in the current marketplace, and you certainly don’t know if you can make a go of it.
For the first few years, there will be a lot of trial and error as you attempt to get your business off the ground, tempt customers to part with their cash and maybe even take on staff.
Some things will work, some things won’t. Unfortunately, you bear the brunt of all the bad things while always hoping to reap the benefits of the good.
Franchising is different.
In most cases (and you have to do due diligence, like any business), the wrinkles have been ironed out already.
The map is already laid out for you.
Getting from A to B is now a matter of following a set of already well tested procedures and systems.
Something went wrong? Call up the team to help, and it’s likely someone else has already been through the same issue you’re facing.
All in all, the path to success is a much easier, and importantly, quicker one.
But isn’t there a cost?
Yes, there always will be, but you must consider the cost of doing it all yourself.
For example, if you want to advertise your business, then you’ll probably need to spend money for a few months trying out different aspects of advertising to get the return you need.
All of that money testing isn’t wasted by any means, but if it could have been spent on something that others have done, and succeeded with, then it would have given a return much quicker.
When setting up a business many owners are tempted to take the cheapest route possible, and entrepreneur blogs and articles are full of success stories of people who have done just that, but they’re the exception.
Very few businesses start from nothing, many have a substantial investment, and in real terms, it will probably cost a lot more to do it yourself rather than buy into a franchise.
Does this work for estate agents too?
In the same way that a new McDonald’s can benefit from having all of that business information on tap, an estate agent franchise can, too.
You get support, documentation, training and help when you need it.
But most of all, you get a franchise team that wants you to succeed.