Buying into a business franchise is a great way to join your business venture of choice at a fraction of the costs needed if you were to go independent. However, this is not to say that franchises don’t have unique challenges. Depending on the type of franchise you’re getting into, it’s always vital to understand these challenges for adequate preparation. So, you’ve been thinking about becoming a tool distributor? Great decision! Most renowned tool franchises such as Cornwell Quality Tools offer mobile franchise opportunities for their tool distributors, typically offering lesser operational costs than traditional brick-and-mortar franchises. You can check this link for how to become a tool distributor tips with Cornwell. 

Mobile tool franchises are the most popular option for tool distributors for many obvious reasons. Other than lower overall costs (including startup costs), mobile tool franchises are easy to manage due to their flexibility, and franchisees can do with one or even no employees. You’ll also have flexible working hours and stronger relationships with your customers since you’ll be traveling to meet them. Read on to learn some of the basic steps of becoming a tool distributor. 

Step #1: Choose a Reputable Tool Franchise 

The first step is identifying a worthy tool franchise company to partner with. This is a crucial step because your franchisor is your business partner. When choosing a franchisor to partner with, ensure to do your due diligence before deciding. Understand their terms and get to know them and how they relate with people who invest in their business. They should have deep concern and show genuine interest in your endeavor. The good thing is that just like most businesses nowadays, most reputable tool companies have information-rich websites where you can learn alot about them and how they conduct their business. 

Step #2: Arrange your Financing 

If applicable, after successfully applying to be part of the mobile tool franchise, the next crucial step is to get your finances in order. This should be after finding out their cost requirements, including startup fees and whether you’ll need to purchase a truck and inventory. Costs will vary depending on many factors, such as if you’re planning on buying a used or new truck and the specialty tools you choose to distribute. You should also find out if any franchise fees or royalties apply. After knowing all these, you can now decide where your funds will be sourced; whether from your bank, credit from the tool company, or any other financial institution. 

Step #3: Meet the Tool Company and Other Franchisees 

Having a one-on-one meeting with your franchisor is crucial in learning more about their general values, including their mission and vision statement. There are many ways to meet your prospective franchisor. Some common ones include attending their discovery days or contacting them via their official communication lines. Events such as discovery days will enable you to meet and interact with other prospective and ongoing franchisees. 

Step #4: Attend Necessary Training 

To set you up on a smooth path when operating your tool truck business, reputable tool companies organize training for their new franchisees where they learn the ins and outs of running the business. They include many company-specific policies and procedures such as dealing with payments, returns, credit, etc. Find out details about their training like where it will be held and how long to aid adequate preparation.  

Step #5: Map Out your Business Territory and know your competition 

Most tool distributors from one tool brand operate on a territorial basis, and it’s common to find one dealer having sole distribution rights for a specific area. However, this is not to say that having a territory to distribute one tool brand will deter other brands from also pitching tents there. The tool distribution business often features fierce competition between dealers from competing brands, and it’s good to understand the nature of your competition to know how to identify and capitalize on a competitive edge. Some areas may have extreme competition where dealers go to great lengths, like sharply cutting costs to attract customers to their tool brands. 

Step #6: Learn the Art and Skill of Sales 

As a tool distributor, the process of sales and collecting payments will fall solely under your docket. Formulate your terms for extending credit depending on your customers’ behaviors. When extending credit, you should always be wary since most of your products will be in the thousands range, and failure to have a working system for collecting payments can easily bankrupt your venture. You might want to consider avoiding giving credit for high-end tools to avoid challenges with payments.