Opened franchise business in bad market? Need Advice

Discussion in 'Growing and Managing a Business' started by ravman, Apr 24, 2015.

  1. ravman

    ravman
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    Hello All,

    3 months ago I quit my job to open and focus on a Real Estate based franchise business. I have one year of operating and personal expenses saved up in order to get the business going. I originally thought that there was only one main competitor in my market and that his business was thriving (it still is). Also this business focuses on rental properties and there are several military installations and state funded energy programs now expanding in the area driving up the need for housing. I thought this combination would be what I needed to grow the business. My only concern was the territory I purchased has a population of 300k people spread out over a 100 mile radius. Most people who buy into this franchise buy territories with a population of 2 to 6 million.

    However now being 3 months in we are struggling desperately. I have come to find that trying to be an outsider in an already established small market is much more difficult than just being another fish in a large pond. I also came to find out that I am competing with most of the Real Estate firms in town which is different in my market compared to some of the other markets.

    After 3 months I only have 3 clients, all of the other franchisees who I started with at the same time are up to between 10 and 20 clients already. They are getting 3 to 4 times the lead volume that I am with very little effort. I am actually the only one who has attempted to network (2 to 3 misc meetings a week) and put significant time/money into the website and other marketing methods.

    At this rate we are not going to be able the survive the first year. I am attempting to think outside the box in order to try and create a referral based business. However this is difficult and takes time. Time that I don't have. I am thinking of contacting my franchisor and asking if I can relocate and start anew in a better market before I run out of money. I know 3 months is not enough time to get established (my website is finally starting to rank organically on the first page, I have made a lot of connections but nothing coming in yet) but I fear I made a fatal mistake from the beginning by picking the wrong market. I should have not quit my day job until I had started to get the business going. Any Advice?
     
  2. Kevin Peter

    Kevin Peter
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    Why don't you give the business a couple of more months? Is it a slack season now for real estate in the region you opted for? Any negative hiderance on the franchise brand?
     
  3. atlantisrocks

    atlantisrocks
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    Breaking into a market that has been successfully mined by another business is difficult.

    You mentioned that others are getting 3 to 4 times the lead volume you are receiving. Considering that your area contains 300k people while others have areas with 2 to 6 million, you are probably doing quite well.

    Have you identified the things that your successful competitor is doing that you may not be doing? Obviously there are some differences.

    What suggestions does you franchise group have for you? Are you in contact with other franchise owners to seek help? Sometimes talking with someone else who has been through the pains of start-up is enlightening.
     
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  4. Damien Lee

    Damien Lee
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    Sorry to hear about your experience. Just keep in mind that 3 months in any type of business is an incredibly short time to determine eventual success. Very likely, you're experiencing teething problems which many first-time business owners tend to go through. You may be hard working but have yet to internalize that you're an entrepreneur. I can tell, because you're already panicking and impatient in such an early stage. It's also wrong to compare your results to others who may very well be more experienced than you are at this point in time.

    You can't run away from competition. Even if you move into an area with less competitors, sooner or later you can expect rival businesses to start popping up. I suggest that you do talk to the franchise head in your area to help you with your problem. If you find them uncooperative, then it's best to sell the business and move into something less risky.
     
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  5. pwarbi

    pwarbi
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    As others have said, 3 months is a short space if time to judge the success of a business on, and you say you've got enough money to last a year, then I'd re-evaluate after 6 months and then again after 9, and see then what options you've got.
     

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