How to Analyze a Good Franchise Opportunity in Singapore

What is a franchise business?

Before you settle on a franchise, you have to do some self-reflection to know what your passion is and the main reason why you would like to get into entrepreneurship. Why follow passion and not find the franchise opportunity that has the biggest ROI? Well, because it would be counterproductive if people are great and love doing something and follow just the money; in the end the business wouldn't run as well as if it was a loved business. People should think of franchising as starting a new business where skills will come in handy, and passion will be the wheel that keeps the franchisor going when the business is going through tough situations. 

How to know if people have what it takes to become a Franchisee? The “perfect” franchisee is a person which knows that having a franchise is not as easy as it sounds even if there is passion and determination. 

Nowadays it is very common for people to decide to become a franchisee and think that because everything is “set up” it will be easy-money. But let’s be clear, it is true that many things are already “settled”, such as the business plan and the marketing, which is a huge step BUT the franchisee needs to run the business and make the thing work. People may have amazing stores and incredible business plans, but if the franchise does not have clients and does not achieve the goals...it becomes useless. 

Business in Singapore

Nowadays, a lot of us dream to escape our 9-5 hour job and start our own venture. However, certain issues are preventing many from getting started, such as lack of capacity, startup fund, networking, the presence of high risk, etc. Singapore has been regarded as the best place for doing business for 10 consecutive years by the World Bank’s Ease of Doing Business Report.

Setting up a business in Singapore gives huge earning potential, tax exemptions, world-class infrastructure, modern amenities, liberal government policies and free trade barriers. This sovereign city-state in Southeast Asia is mainly known for its multicultural arts and cuisine, but it doesn’t end there, Singapore is a global financial hub that ranks on top of the world’s easiest places to do business by the World Bank. It has a stable government and a systematic financial system,  consequently, several company headquarters can be found.

"You know the Singaporean. He is a hard-working, industrious, rugged individual. Or we would not have made the grade." - Lee Kuan Yew - Singapore's Founding Father

People always say to be clear when making a decision, to see numbers and make an analysis… well...

• The personal and corporate tax rates in Singapore are very business-friendly. Corporate tax is capped at 17%, with new firms getting considerable tax breaks in their first 3 years – as low as 0% up to an income of 100,000 SGD.
  
  

• Personal tax rate varies from 0% to a maximum of 20%. No taxes are imposed on capital gains from the sale of a business. Similarly, no tax is levied on dividends paid to the shareholders.

Singapore has one of the simplest and most bureaucracy-free business regulatory frameworks the world over. Incorporating a company here is so easy and straightforward in fact that it could be done within a day in most cases.

How to evaluate a franchise opportunity in Singapore?

Buying a franchise

When buying a franchise, people automatically enter in a system that has already been stablished and proven to be a success. Many think that if in order to be their own boss, buying a franchise opportunity in Singapore is the easiest way because all the paperwork, numbers, administration, legal and boring excel things are done, all we have to do is follow instructions and keep the fire going. Easy peasy!

Below you will find some benefits most franchises will provide:

1. Brand Positioning / Name recognition

   There is no need to invest on establishing a brand name and position. Well established franchisors may offer national / regional or even international name recognition. 

2. Lower Failure Rate

   As for the point established above, when buying a franchise people buy an established business that has been successful. The trial and error has been made, there is no need to find a new way, people just need to walk on the same road. Actually, statistics show that franchises have a much better chance of success than independent business (which have 70%-80% of failure). Although it is important to state in this point that stating that even though a business is doing well, innovating is extremely important for the franchise opportunity to survive. 

3. Ongoing guidance

   There is an assistant during and after the process. If there is any need, question or requirement, there will always be a person there to help!

4. Management assistance 

   A franchisor provides the franchisee with management assistance which include: accounting procedures, personnel management, facility management, among other tools.

5. No experience required

   This point goes hand with hand with the point stated above. Part of management assistance is that if an individual has no experience (or is not familiar with) in some areas, the franchisor will help the franchisee overcome this lack of experience. 

6. Marketing Assistance

   One of the several marketing advantages the franchisor offers is that he/she can prepare and pay for the development of professional advertising campaigns. In addition, the franchisor can provide advice about how to develop effective marketing programs for a local area. 

7. Training programs

   Most of the companies give training for people can learn the way things are done, as it is necessary for every shop to have the same essence.

8. No experience required

   It is not necessary to have business experience to run a franchise. 

9. Easier to secure finance

   The costs are way lower when buying a franchise than starting from scratch

10. Proven Operation System

    An attractive feature is that they have a proven system of operation. This system has been developed and refined by the franchisor. A franchisor with many franchisees will typically have a highly refined system based on the entire experience of all these operations.

Franchising is seen by many as a simple way to go into business for the first time. But keep in mind that franchising is no guarantee of success, and the same principles of good management such as decision making, time management, (among others) still  apply.

What us the hottest franchise opportunity in Singapore?

In the last year one of the most successful franchise in this kind of services in Singapore is  Mr Jeff Laundry Franchise Company.

Mr Jeff  is a three year-old technological company that solves people's day to day problems such as doing laundry. It does this by implementing constant progress and improvement in all of its processes due to its commitment to continuously innovate. It is one of the companies with most success in the laundry sector having a new and innovative business model.