12 steps to turn your entrepreneurial dream into reality

Posted at 01/24/14 1:05 PM

Editor's note: The Business Mentor is a weekly business column by Armando "Butz" Bartolome, president of GMB Franchise Developers Inc. and chairman of the Association of Filipino Franchisers Inc.

MANILA, Philippines - Filipinos are a veritable goldmine of talents and ideas. They brim with energy, enthusiasm, and guts.

Oftentimes, though, they run into a brick wall when it comes to financing their dream business ventures. What has become the norm for most Pinoys is to watch their dream whither away even before it starts, mainly because of perceived financial constraints.

The heartening news is this is slowly changing. Once overly cautious of striking it out on their own, some Filipinos are now putting up their own enterprises.

With the right steps and with expert guidance, a great dream, if it is feasible enough, may be allowed to soar and to attract the money required.

This may be via the franchising route. Experts advise aspiring franchisees to weigh prospective returns against potential risks and seek information and insights from all fronts, in the process of deciding to hitch with a rising start or established industry player. The franchiser' track record plays a major part.

Finding your way in the franchise maze

You may find the prospect of choosing a franchise business to be a bit of a maze when you, consider the numerous opportunities open to you. There are, however, certain key steps to navigating your way to successful business ownership:

1. Settle with your spouse the issue of choosing which type of business, especially if you will be sharing and running the business with him/her.

For instance, if you prefer a food business, explain to the factors and reasons why you prefer it. At the same time, be open to their opinion because family support is often vital to the success of a fledgling business.

2. Determine funds available for your franchise investment. List down the other resources where you can get additional funding.

One source is the Small Business Corp. (formerly known as SBGFC), which offers funding for potential franchisees. By selecting a franchiser who is accredited by the SBGFC, prospective franchisees have a much better shot at getting funding. There is also BPI (Bank of Philippine Islands) which recently launched a program called “Ka-Negosyo Franchising Loan”. Loans start at P500,000 and with payment mode of either Lite Mode which is interest only for first 6 months, principal + interest payments start on the 7th month onwards or straight amortization. The Association of Filipino Franchisers Inc. (AFFI) and GO NEGOSYO are in full support of the program. Readers may contact 0917-852NEGO (6346) or 0922-869NEGO (6346).

3. Evaluate yourself. Not all franchises may be suitable to your personality. A food franchise, for instance, will require attention to detail and constant inventory control.

4. Time is another concern. How much time are you willing to devote to the business? Some franchisers require hands-on management. This means that the franchisee will be required to be in the branch for most its operating hours or at least three to four hours a day.

5. Start to make a short list of franchises you and your spouse particularly like. Visit the branches; check out the products and services offered. Are the branches consistent with its products and services? How about the locations? What factors make branches a success or failure? Do you see yourself managing such a business? Will you be happy doing so?

6. Now that you have narrowed down your selection, go and make an appointment with the owner. Find out if they are. in franchising. Get information regarding investment and what it includes.

7. If the business has been franchising, check out if you can meet and talk with the franchisee. They are good indicators as to how the franchise has worked.

8. Find out from the franchiser the location requirements. This will guide you in looking for a site. Location is a critical determinant for the success of an outlet.

9. Prepare a feasibility study if the location will suit the kind of market that the particular franchise is best suited to. Be sure to detail what businesses are nearby, the type of traffic (foot and automobile) that passes by that spot, rent arrangements, future development plans for the area, etc.

10. Study carefully the franchise agreement. Have your spouse read it, and exchange views. Then get a legal counsel of your own to help you on the contents of the agreement. Make an appointment with the franchiser and clarify issues listed in the Franchise Agreement. My latest book “Is Franchising For You?”, highlights specific areas to look at when reading the agreement. Never sign if you do not have a clear understanding what you are entering into. Most franchisers allow at least several days for the candidate to absorb the contents. In the United States, it is called as a “cooling period”.

11. Do you like working with the franchiser? Franchising is built on harmonious relations between you and the franchiser. Get to know the type of personality and working habits of the franchiser. There should be a level of compatibility between you and the franchiser.

12. Avoid making a hasty decision in getting a franchise. Study and weigh all options, before plunging into a business you may regret later on. If you choose well, you might even consider expanding into a multi- franchise holder. Patience is indeed a virtue!

For questions and more information, you may contact Armando "Butz" Bartolome by email: [email protected] His website is www.gmb.com.ph