You hear about franchising every day. Chances are, you spend money in franchised businesses every day as well. Just how big is the franchising way of doing business in 2016 America? In terms of sheer numbers—jobs, revenues, dollars in the economy, people employed—it’s massive.
By Pete Gilfillan, best-selling author of HIRE YOURSELF: Control Your Own Destiny through Franchise Ownership.
Job searches can be frustrating and deflating for the unemployed or for anyone seeking new career opportunities.
I’m always amazed at the tremendous ingenuity franchisors show in coming up with new ways to implement the franchise model and make it profitable. For example, look at the Massage Envy concept. This franchisor took a traditional small business and created a win/win model that provides value to everyone involved. Customers get discounted massage services by having memberships; franchisees get a reliably steady stream of income from membership dues. The concept created a whole new segment in franchising—one I think we’ll be seeing more of in the future.
The leap from investigating a franchise to buying one requires a reality check from any potential investor. There are three main components that will determine if you are financially solvent and solid enough to buy into the franchise you choose: your net worth, your liquid capital, and your credit history.
Putting together a solid business plan before you file any applications or sit down with a finance company, a loan officer—even with a family member—will help you make a clear, compelling case for funding. Your business plan should include each of these basic components:
As the owner of a startup business, you’re going to start out spending working capital—money you’ve set aside to live on and run your business with until it becomes profitable. In time, you can expect to reach a point where your business breaks even, when you’ll have more cash coming in than going out. When that happens, the business becomes self-sustaining.
Most franchise companies require a minimum level of liquid capital. They know that businesses often fail because they are undercapitalized, and they want to be sure franchisees are set up for success.
Thomas Edison once wrote, “If we all did the things we are capable of, we would astound ourselves.” The skills and strengths you bring to business can help determine if entrepreneurship is right for you. We all have talents and abilities that stand out. Having a firm handle on yours will help you make smart choices as you look at investments. Consider the following questions to help assess your own skills and strengths:
Walt Disney, one of the most successful entrepreneurs in American history, once said, “All our dreams can come true, if we have the courage to pursue them.” For many of us, entrepreneurship is our among our greatest dreams. Working for ourselves. Achieving on our own terms. Building something valuable and great. We aspire to do more and be more than cog in someone else’s corporate machine.