16 May Steps To Identify Whether the Market is Ripe For Your Franchising Business
If you are planning on owning a franchise, you must have conducted a certain amount of research to identify whether the business will be profitable. However, the other crucial aspect you have to take into consideration is about the feel of the market.
When you throw open the doors of your business for the first time, you want to be sure that there will be a large number of customers eager to patronise it. However, if the market isn’t ripe for your particular franchise, that will mean you get a very tepid response.
This is why it’s vital that you analyse the market that you are about to plunge into, well before you actually purchase the franchise and set up your shop. Here are some of the steps you should follow to identify whether the market is ripe for your franchise:
#1 SWOT Analysis
This is a traditional analysis technique used to measure what your strengths, weaknesses, opportunities & threats are. While this technique has been used for a very long time, this analysis constantly turns up new and useful information for businesses. It is so useful that big and small companies conduct this analysis on an annual basis. It is quite an exercise you should consider as well; it will help you identify whether the market is ripe for your franchise.
You would have to make a detailed list of every one of these areas to get a clearer view of what the current state of the market is. If your strengths outweigh you’re weaknesses and your opportunities are greater than your threats, then you are in a strong enough position to launch a franchise. If you find that all these aspects are evenly balanced, you would probably have to conduct a deeper analysis and investigate what your competition is doing
#2 Check Out Your Competition
If you find that there are just too many businesses listed in your threats column, you would have to take a much closer look at who those businesses are and how they could hamper the growth of your business. In order to carry out this analysis, you would have to conduct a certain amount of investigation into how your competitors work and what their standing in the market is. Some of the things you could do are:
- Check review sites and see what customers have to say about your competitors. If there are too many negative reviews, that business won’t be a threat to your franchise.
- See how engaged and active the community is. If your competitor isn’t doing much to keep their customers engaged, that gives you a better chance of attracting a large number of their customers; and that makes them much less of a threat.
- Google the competition and see if there is any negative news about the company and whether they are fighting poor publicity or are embroiled in lawsuits. If they are, it will be the best time for you to make an entry into the market.
- Check whether they are involved in local groups like the Chamber of Commerce. If they don’t participate actively there, that can give you an open field to forge business relationships with members of those organisations; this will give you an edge over the competition.
The key lies in conducting detailed research on the market you are about to enter. This is one of the most vital steps to take before you invest in a franchise.
If you want to know more about setting up franchise business or want some advice, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.
Thanks for reading,
The Franchise Institute Team
1300 855 435