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4 Factors to Consider Before Buying an Essential Business in COVID Times

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4 Factors to Consider Before Buying an Essential Business in COVID Times

The shutdowns and rollbacks of businesses due to the COVID-19 pandemic continue to play havoc with the U.S. economy. But the least-affected businesses during the crisis, for the most part, have been those deemed “essential” by state and local governments, allowing those companies to remain fully operational or close to it.

Meanwhile, with the idea that essential businesses can be recession-proof and even boom during a public crisis, buying one is becoming a more attractive prospect for some people, says Chris Buitron, president of Mosquito Authority® (

“Our current economic challenges as a nation are showing that owning an essential business can be a solid financial strategy for an individual,” Buitron says. “They are practical purchases. They are not often glamorous businesses, but they make sense largely because they offer services that are currently in demand, and as such they can weather economic downturns.

“Some essential businesses, such as ours, are busier than ever as people are trying to maintain social distance by staying home and not taking many vacations. People consider protection from mosquito bites and the diseases they carry as a high priority for their family’s health and outdoor enjoyment. Like other essential businesses, our franchisees provide measures of security and comfort, allowing people to enjoy being in their yards at a time so many are cooped up inside due to the pandemic.

“And at the same time, all kinds of essential businesses provide ownership opportunities while millions of unemployed people are looking for new opportunities or new career tracks. Perhaps they’re looking to be their own boss and to have more control over their financial future.”

Buitron suggests considering the following when weighing whether to buy an essential business:

Focus on successful types of essential businesses. Among the essential businesses  that have the potential to succeed even during difficult economic times are: delivery services, grocery stores, convenience stores, e-commerce, gas stations, cleaning services, liquor stores, auto repair, lawn care, pest control, mailing/shipping services, and contracting. “The pandemic may be with us for a while,” Buitron says. “People will be home more often, and businesses that can service their needs while home will gain customers.”

Consider franchises as ownership opportunities. While some franchises are struggling during the pandemic, others are in a better position, Buitron says. “For franchises in general, much of the industry will be entering a buyer’s market, and those with the means will find some good opportunities,” he says. “People need jobs, and franchises annually employ 9 million people in the U.S. One benefit of buying a franchise is having an organizational and management team already in place to train you and help guide you. Reach out to other franchise owners to get a sense of the company’s commitment and support.”

Know a bargain vs. a bad investment. A relatively low sale price tempts some people into making a poor buying decision on a business. Buitron says it’s important to pore over the business’ financial numbers that it recorded before the pandemic and do all the research possible – especially of the market where the business is located – to determine if it was on a growth track and what the competition is like. “Two questions you need to ask yourself as a potential buyer of an essential business are: What can you bring new to the business to make it more successful, and why was or wasn’t it profitable?” he says.

Be sure you’re up to owning a business. “There are no guarantees with owning an essential business,” Buitron says. “The pandemic has put a spotlight on their importance, but they take lots of work and organizational skills to run. If you are someone who can’t deal well with uncertainty, buying a business any time, let alone during the most uncertain time in our history, isn’t the right choice. Buying a business and committing to it requires thorough research, a passion for the business, a solid financial foundation and a leap of faith.”

“Owning an essential business brings with it the satisfaction of providing necessary services for people,” Buitron says. “In these times especially, that’s a noble pursuit.”


Chris Buitron is president of Mosquito Authority® (, a nationwide leader in mosquito control with franchises serving communities across the U.S. and Canada. Buitron has an extensive background in franchise industries. He was chief marketing officer for Senior Helpers, vice president of marketing for Direct Energy (home services division), and director of marketing for Sunoco Inc., where he supported the company’s 4,700 franchised and company-owned rental facilities across 23 states (over $15B in annual revenues).


Top Five Challenges Facing Franchise Owners Today

Owning a franchise system is a dream come true for some entrepreneurs. But with different franchising ideas constantly popping in, it can be difficult to establish a brand that’s both sellable and unique.

Even if you’re bold, fearless, and a big risk-taker, it isn’t enough to ensure the success of the business you’re trying to build. However, a start-up franchise business loan will come in handy and will also help you grow your franchise company.

As with other growing businesses, the franchising industry faces its own unique set of challenges. At one point, some companies may experience rapid growth only to end up hitting a wall when it comes to expanding their brand. Sometimes, the challenges in the franchise business can be foreseen, but they can also catch entrepreneurs by surprise.

Here are 5 of the challenges facing franchisors today:

1. Lack of Working Capital

One of the many reasons why businesses fail is because of insufficient working capital. Although the road to success for a franchise business might seem easy, it’s not going to work if you don’t have proper financing. The first few years in running a franchise are usually the hardest. Aside from the fact that you’re still learning the ropes, you also have to deal with expensive start-up costs.

If you’re starting a franchise business, you’ll more than likely have to employ the help of some professionals. Franchise consultants, lawyers, branding experts, and other important people need to be on board to ensure the success of your franchise business. So, be sure that you have adequate financing that will cover fees.

In the franchising industry, it’s always important to remember never to underestimate the costs. Franchisors should generate enough revenue to support infrastructures, marketing campaigns, business operations, as well as other important finances.

Since it could take years for the franchise business to generate enough cash to support the business structure, entrepreneurs should have enough capital to self-fund the business until it reaches that point. Oftentimes, they will take out a franchising business loan to manage the costs.

2. Untrusting Franchisees

Because of the increasing negative opinions regarding franchises, a lot of potential franchisees are having doubts about following this route for their own brand. As a result, they end up questioning the motives and strategies of a franchising company. This can easily become a distraction and a major obstacle in the growth of a franchise company. Because of that, their performance becomes limited and it can undermine the process of a growing company.

As a franchisor, you can prevent this from happening. For one, don’t leave your franchisees wondering. Provide the necessary information that is needed, eliminate any misunderstandings, and be sure to quickly address all questions as honestly as you can.

Also be transparent with your processes, as well as the ways on how you reached where you are today. Be sure to include your franchisees in every business decision, so your motives and actions will not be viewed as self-serving.

3. Finding the Right Franchisees

It’s a no brainer that the success of a franchise business largely depends on the quality of their franchisees. To become a franchisee, interested entrepreneurs have to go through a number of processes, with due diligence being a must. However, there are also times when the franchisors become desperate, especially when cash flow is tight.

When this happens, they accept a franchisee and skip the recruitment process. In times such as these, franchisors must remember that quality is always better than quantity.

When starting a franchise business, franchisors must build a reputable network. They should always build and maintain a strong relationship with their franchisees. Remember that the word of an existing franchises is important in finding recruits for your business. So, the happier they are, the better it will be for the growth of your company.

4. Hiring the Right Team

In starting any business, the entrepreneur must be able to identify the company’s strengths and weaknesses. Once this is known, they will then know what type of people they should hire in order to bridge the gap and eliminate weak points.

Your employees are the greatest asset in your business. As a growing company, the odds are high that you’ll need to interact with your staff from different departments. Ideally, you should be sure that you’re all working towards the same goal. As such, you need to instill the company’s culture in your employees and take steps that ensure they embrace it, as well.

5. Adjusting to Becoming a Franchising Company Owner

Although it may sound simple to some, becoming a franchisor is the biggest challenge of running a franchising company. An entrepreneur might be used to overseeing the day to day operations of a business, however, when one decides to franchise their business, a whole new set of concerns arises.

A franchising entrepreneur should possess the qualities of a good leader. They should also be able to motivate and inspire their employees and franchisees, so they too, can adapt to the role given to them.

Aside from that, the franchisor should learn how to hold back in the management of their business operations. By hiring the right management team, the franchisor is able to free up time which they can use to focus more on business’ growth and expansion. They have to make concerted efforts to not to make any crucial franchising mistakes in order to avoid a business failing.

Need Start-up Franchising Business Loans for Your Growing Franchising Company?

Running a franchising company is a challenging undertaking. That’s why you need a strong support system as well as the right funding in place that can help your business survive. At some point, you’ll eventually need additional financing support in order to keep your business afloat. So, be sure to secure the right start-up franchising business loans for your growing business.


Ramona Smith is a staff writer for SMB Compass. She loves to enjoy spending time with her family. She loves to going out and explore new moments whenever they came to light. Ramona discovers satisfaction in investigating new subjects that help to extend her points of view. You can frequently locate her covered in a decent book or out searching for an experience.