I don’t know if you should buy a franchise. But, I do know franchising.
Do You Have The Energy To Own And Operate A Franchise?
First off, you need to know that running a franchise business is hard work.
Are you up to the task? Are your finances in good enough shape? Find out here.
What about your energy-level? Have you thought about that? I hope so.
Is your family on board? Are you thinking of becoming the owner of a small business because you can’t find a good job?
In short, you have a lot of things to think about. Obviously, the decision to own what you do is a biggie.
If you’ve been out of work for more than a few months, the idea of investing in a franchise business could be starting to sound attractive.
I’d wager that you would kind of like the idea of not ever working for someone else, again. (Especially since it was a “someone” who let you go!) But, is it a realistic thought in your current situation?
Should You Own A Franchise Business?
Here are a couple of scenarios in which franchise business ownership may make sense;
1. You’re a former high-level executive with a pretty substantial net worth. ($1 million+) and you were recently downsized.
2. You were in middle management, made $150,000+ annually, and have what it takes to run a business. You have a net worth of around $500k, with a working spouse.
3. You were in a six-figure sales position, and lost your job, You love B2B sales….you’re a real tiger. Your net worth is around $350k, but your spouse works, and you have very little debt.
4. You’re currently working in a high-paying middle management or executive position, and have a net worth of $750k+. You want to be proactive, and get into a business of your own now, so that you can have something that’s up and running when and if you do lose your job.
If one of the scenarios above describe your situation, you’re a good candidate for business ownership. Notice that I didn’t say “franchise” ownership. That’s because you may not be cut out for franchising. It’s like no other business. There are lots of rules to follow-rules you MUST follow.
If one of the scenarios above doesn’t describe your current situation, don’t give up. See if you can figure out a way to come up with more money. Maybe partnering with someone else is the way to go. You could also look into starting a low-cost, part-time business. Could your spouse/partner go back to work full-time, while you start a business? Have you asked Uncle Mort, yet?
A Few Pros And Cons Of Franchise Ownership
Around 7 years ago, I was contacted by the SBA. The person who contacted me asked me if I’d be interested in writing a monthly article for the small business blog they just launched. I said yes, and I’ve been writing franchise articles for the U.S. Small Business Administration’s Website ever since.
What follows is an excerpt from an article I wrote that showcases a few of the pros and cons of franchise ownership.
1. You can set your own schedule
Imagine how it would feel for you to be able to come and go as you please…to set a schedule based on your needs instead of your employer’s needs.
2. You don’t have anyone to report to
If you own an independent business, the buck stops with you. You make all the decisions having to do with your business. Believe me, it’s quite empowering.
If you end up becoming the owner of a franchise business, the buck still stops with you, but there is a difference. You don’t get to make strategic decisions about your business. In other words, you can’t just add new products and/or services in order to increase revenue. Those things can only be done from franchise headquarters.
3. You have lots of control
As the boss, you have the ability to control your day-to-day work life.
In addition to setting your own schedule, you have the final say so on who you hire, and what benefits (if any) you provide.
You can also control the growth of your business. Maybe you’re at a time in your life where you don’t want or need to pursue record-breaking sales numbers. Guess what? When you’re the boss, you don’t have to.
On the flip side owning a business, does have its drawbacks:
1. Income fluctuations
When you own a business, your income is dependent on the revenue you bring in. And it may not be consistent-especially at first.
Think about it; when you’re an employee, you expect and receive a paycheck on a consistent basis. It’s up to your employer to figure out the revenue part. It’s really not your problem. Not so when you’re the boss. You’re the one in charge of making enough money to pay your employees, pay your operating expenses, and pay yourself!
You, as a business owner, are liable for bad things that can sometimes happen in a business. For example, if you own a restaurant that serves alcohol and one of your employees serves alcohol to an underage customer who drives away from your restaurant and hurts someone in an auto accident, you can be held liable. Scary, huh?
That’s only one example. Can you think of any others? You need to.
Tip: make sure you hire a business attorney who will explain your liability as the owner of a business before you become an owner.
3. Long hours
It’s one thing to “understand” you’ll be required to put in long hours when you own a business, it’s quite another to actually work 12-14 hour shifts. Feet get sore.
It’s Your Business!
Granted it will probably be easier to do knowing that the hours you’re putting in are for your own business, as opposed to someone else’s business. But still, long hours are long hours. You may want to talk to current business owners to see what kinds of hours they’re putting in.
When you own a business, tired or not, you have to be the one who steps up when longer hours are needed to keep your business up and running. You need to weigh all of the pros and cons before you take the plunge into business ownership.
To summarize, you’re the only one that can decide if the time is right for you to become the owner of a franchise business.
Learn about franchise ownership by signing up for my free course right now.