The Pilot Store: 7 Fatal Mistakes to Avoid

In this period, more and more people are turning to my agency to found their own startup, often with the vision of creating a franchising development plan for that business. And they often have a more or less precise idea that is often based solely on their intuition.

We know that intuition is the basis of a successful entrepreneurial journey, but it’s not enough.

From my experiences, I’ve drawn several lessons on the mistakes franchising startups make starting from the opening of the first pilot store.

In this article, I’ll talk about the seven fatal mistakes to avoid to prevent closing shop and wasting your investments.

Error 1: Execution Matters More Than the Idea

Let’s talk about the risks of instinct again. Pasquale (a fictional name, but a real case) comes to me with the idea of ​​opening a sushi restaurant in Rome. The neighbourhood where he wanted to open it was popular and lacked ethnic restaurants. This circumstance didn’t raise any alarm bells in his head, and do you know why? Because he was so in love with the idea that he didn’t bother with market data, not thinking rationally. The scarcity of an offering in that market is not always an indicator of a good opportunity. What should he have done instead? Market analysis to understand why there were no ethnic restaurants in that neighbourhood, for example.

Error 2: The Brand Name Isn’t Just About Creativity

Take Jeff Bezos, the head of Amazon. Before thinking of Amazon as the name for his online bookstore, he had another naming idea in mind: Cadabra, to emphasize the magic of his project. Yet the word Cadabra was too close to the word “Cadaver,” which means corpse. This introduction serves me to tell you what the second mistake I see many make: giving a name to their brand, with sometimes considerable creative effort, without first developing a marketing strategy. The name and the payoff cannot be left to chance but should be devised in line with the company’s positioning.

Error 3: Before the What, Comes the Where.

Try to imagine: what sense would it make to open a wine shop in a neighbourhood predominantly inhabited by Muslims? I’ve always maintained that the first question you should ask yourself before opening a new business is not what but where. Because it will be precisely the where that suggests the what. This is to tell you that the study of the location is fundamental. So important that in my book “Let’s Franchise,” the one on location becomes one of the most important secrets, which is why it’s in Chapter 1. Evaluating the location is decisive, especially for retail or food businesses.

Error 4: First, Tell Yourself Who You Want to Be, Then Do Everything Accordingly

Do you know what the difference is between a real brand and a myriad of stores that have the same name? In the former case, there’s coherence. The term “coherence” must be firmly fixed in your mind if you want to create a franchise. A mistake that many of my first-time clients make is to treat communication as a secondary aspect of their business, without a competent figure coordinating all the work. Creating an identity (brand, layout, social media messages, etc.) requires a specialist in content and a graphic expert. However, these activities come after an analysis of the market and brand positioning.

Error 5: If You Don’t Know Yourself Well, It’s Hard to Improve.

Imagine having an idea in the food sector, opening a handmade ice cream shop. You launch your first store, but by the second one, you’re struggling to scale. Do you know why? Most likely, the working methods you’ve chosen to make your ice cream aren’t easily replicable; they require your mastery and skill, but you’re only one person and can’t be in multiple places at the same time. With this example, I introduce another mistake: the lack of a standardization process and formalization of your activities. Without a standard set from the start, achieving replicability will be difficult. The ability to monitor and improve comes from a complete understanding of operational processes.

Error 6: Numbers Always Make the Difference.

I return to the idea of instinct, with which I opened this piece: it’s fundamental to have it, but it shouldn’t be a way to replace effort or, better yet, the humility you must show. Data is a great ally in this regard. They help you, for example, to downsize your ambitions when they’re disproportionate and to come back down to earth. A mistake I often see franchising startups make is not working on a detailed economic feasibility study, based on sector observation and solely on empirical or statistical data. Note: first comes the idea, but right after come the numbers.

Error 7: Prevention Is Always Better Than Cure.

Sometimes I ask a question to the startups that present me with their project, partly to understand if their enthusiasm is the result of careful study. I ask them, “What is the weakness of your idea?” And often they can’t answer me. Do you know why? They haven’t done a proper SWOT analysis. An acronym for strengths, weaknesses, opportunities, and threats, it’s a critical framework that I always recommend to have all the tools to define an effective launch strategy for your franchising project. Because only by revealing weaknesses can you be able to face and overcome them. And in this regard, the perspective of an expert can help you identify that limit you would never have thought of.