I left corporate America at the end of 2007. In the dozen years since I’ve worked for myself. Oh sure, I have always considered the clients for whom I consulted to be my bosses, but at the end of the day, I was on my own.
If any of you have been, or are, in a similar circumstance, you know that it’s both a liberating and terrifying feeling. There is the freedom to spend a beautiful day at the beach or on a golf course instead of working. After all, you’re the boss. Along with that freedom, at least for me, there was always guilt that I had taken the day to play or run errands rather than grinding it out as I had done for the 30+ prior years of my business life. I guess the Protestant work ethic applies even to Jews…
While I’m still working for myself, the last year I’ve not been BY myself. As a franchise consultant, I’m a part of a much broader network of several hundred other coaches. We share information, I have access to ongoing education about franchises and how to do my job more effectively, there is someone doing collections for me, and the network actually even finds leads for me if I want. I’m in business for myself but not by myself, as is the case with any franchise.
Candidates (people considering investing in a franchise) sometimes ask why they should go with a franchise instead of using their capital to start up their own business. The statistics answer that question for me. 90% of new businesses fail in anywhere from the first five years to as little as the first four months. 90% of franchises are still in business after five years. There is a reason for that, which is that you’re investing in a proven concept. The mistakes have been made, the operation has been refined, marketing plans have been tweaked, and all of that is being handed to you as part of your investment along with training that can last from a few days to weeks, with ongoing mentoring and education for much longer. Pretty spiffy, and a route I wish I had taken a dozen years ago instead of trying to figure it all out on my own.
So what can go wrong with a franchise? I think the two biggest sources of problems are when franchisees don’t follow the model or when they are undercapitalized. In the first case, ignoring the model is basically throwing away what you paid for and diminishing your success rate quite a bit. In the second case, ANY business will fail if it’s undercapitalized no matter how well-run it is. Counting on immediate cash flow to support the operation (or your ability to eat!) is short-sighted. That’s why franchising makes even more sense since there is a track record of what capital is needed to get the business up and running for the first few months. It’s actually so clear that the franchises put those costs in their Franchise Disclosure Document (item 7) and those are numbers I have and discuss with folks as they are looking at investing.
Being in business for yourself is great. It’s even better when you’re not by yourself. I can show you how to make that happen for you. Just click here and let’s get started.
Consult Keith 