While the media shares the sad news of businesses closing, many are adapting and even thriving in the economic shift of COVID-19. What do a lot of these various businesses have in common? They’re franchises, and with over 30 million layoffs in the US, people are looking for new sources of income. Among the career changes, e-commerce start-ups, and learning new skills and certifications through online education programs, people are investing in franchises.
Starting a small business can be a scary, stressful financial risk, which often takes a few years to generate annual net profit depending on the industry. But with franchising, you’re mitigating that risk, and there couldn’t be a more unique opportunity-rich time to open one with those advantages. Now that we’ve been in the pandemic for several months, we can begin to look at the data and observe which industries and companies are adapting and even thriving. To start, it’s worth looking into which businesses have been deemed “essential.”
Being essential is outlined by city and state government, and is a huge advantage allowing a business to remain open. But for those deemed non-essential, have shifted to an online marketplace have also found leverage over competitors. In the second quarter of 2020, consumers spent $200.72 billion online with U.S. retailers, up 44.4 percent compared to $138.96 billion from the second quarter of 2019. E-commerce will continue to boom as consumers stay home or at least stay out of commercial spaces, and companies begin to digitize and optimize their business for a seamless online buying experience.
The playing field is no longer flat. As businesses have to temporarily close, and others shut down for good, this has created a consumer shift as they look for other businesses who can meet their needs. As the amount of competitors decreases, and forces an increase in consumers exploring new retailers, there is potential growth for businesses who survive.
Finding the right franchisor is the next important task. The franchisor has done the hard part in establishing a proven business model, while successfully adapting during the coronavirus, you just need to manage and execute it. Find a business you buy into, their brand vision, mission, values, model and ultimately their product. If you don’t, you’re only impeding your own success running a franchise. Finally, the stress the pandemic has caused on other industries such as banking and commercial space means you have more bargaining power on lending and leasing, which again, mitigates your risk.