5 Questions to ask yourself before buying a franchise
Here’s how to know if a franchise business is right for you
For some, owning a business has been a life-long dream. Maybe business ownership was down the road, but the timing never seemed right. For many people young in their careers, climbing the corporate ladder, gaining management experience and building their 401k are the priorities. On the personal side, starting a family, buying a home, raising children are often obstacles to business ownership.
It happens all the time. One day it all changes and the “dream job” is no longer consistent and neither is the pay. Job changes and pay changes become a constant cycle. Business travel and after-hour meetings become the norm not the exception. Spending time with family and friends come off the priority list. And then the wake-up call comes in… and the questions are asked: “Where did the last 20 years go? Who has been in control of my career? What important events did I miss? What happened to that dream of freedom and flexibility, control over my own destiny and being my own boss?” It all got pushed aside because the urgency of life got in the way.
That’s a heavy burden to carry, one full of frustration, sadness and disappointment.
So what’s the solution? How does one change the relentless spin of life? The answer is quite simple, but making the decision to change is not. Follow your dreams!
More than thirty years ago, that was part of my story. I was chasing my corporate plans while letting my entrepreneurial dreams fade away. An event happened in my life that caused me to change my priorities and change my career. I decided to move from being controlled to being in control. Through franchise ownership, I became the boss instead of being bossed around and took charge of my financial future rather than having my financial future controlled by someone else. Was the decision easy? Absolutely not. Was the decision worth it? Absolutely yes! What’s your dream? What’s your passion? Do you want to be the boss or the employee?
When that internal conversation happens, you need to ask yourself if it’s time to follow your dreams.
Being an employee can be easy. You follow the direction of your boss, do your job, and get paid for your work. Seems simple enough until you discover the independent streak in your personality is stronger than you think. You begin to question your boss or your boss’s boss. You’re told to do things you don’t agree with. You discover the promotions, raises and bonuses go to people who, in your opinion, don’t deserve them. You’ve reached your earning potential. Negative changes beyond your control are being made to your benefits and retirement plans. You’re asked to make sacrifices that hurt your family. You need to play politics to stay relevant and survive. You’re required to make compromises you don’t agree with. Your boss is making your life difficult. You see no future in your current position. You start looking for other career options. You keep thinking to yourself, “If I were the boss, I would treat people differently, I would be in control of my financial future, and I would have freedom and flexibility on my terms.” When that internal conversation happens, you need to ask yourself if it’s time to follow your dreams and discover how you can control your own destiny.
There are 5 essential questions you can ask yourself to determine if the time is right for you to change your dream into a reality. Is franchise ownership for you? Read on, and see for yourself.
QUESTION #1: Am I willing to take a risk into franchise ownership?
Risk is related to fear, and fear can be one of the strongest emotions humans feel. It either keeps you from doing great things or motivates you to do great things. Buying a franchise is a risk. Here are some risk factors.
- You could lose your financial investment.
- You could fail.
- The future is uncertain.
- You could make a bad choice.
- It could negatively impact your family.
- The economy could go bad.
- Employees may be difficult to find.
The reality is, there is risk in doing anything. Is it scary to become a business owner? Absolutely; but successful people embrace change and identify the risks. Once they recognize the risk is overshadowed by fear, they can begin to work through it. Everyone has fears, they begin in childhood. We are taught to be careful and cautious. As we age, we discover the strongest fears we had as children were able to be overcome. We dealt with the fear and moved on. Remember riding a bike for the first time? Feel the fear and do it anyway.
QUESTION #2: What’s driving me to own a franchise business?
Discovering your true motivations for wanting to own a business is critical. Ask yourself these questions:
- What’s driving me, pain or gain?
- Do I want to move away from something painful?
- Is my career in transition?
- Am I tired of the constant career uncertainties?
- Am I frustrated with my earning potential?
- Is the excitement of doing something I’ve always dreamed of motivating me?
- Do I want to control my own destiny?
- Do I want to have more freedom and flexibility in my life?
- Do I want greater financial control and security?
If your answers to these questions point you in the direction of making a career change, then business ownership should be a consideration. Having a clear understanding of the “why” will ultimately help define the “what.”
QUESTION #3: Can I afford a franchise?
Buying a franchise can be expensive. A recipe for business failure is not knowing the true start-up costs, ongoing expenses, and profitability. Proper financial due diligence is critical. Understanding the business costs and personal financial requirements during the start-up phase is essential to short-term and long-term success. The good news in franchising is that with the proper guidance, you can learn about and calculate the business’s start-up and ongoing expenses. You will also be able to develop proformas to determine operational break-even and profitability. Gathering this information will also help you evaluate the funds needed to sustain your lifestyle while growing your business.
QUESTION #4: Do I have the right personality for franchise ownership?
Personality plays an important role in franchise ownership. Since the owner sets the tone for the business, their personality will drive the environment and atmosphere. People do business with people they like. Employees work for people they like. An owner that does not like to work with people will have a difficult time attracting strong customer service-oriented people. If, on the other hand, you are a people person, strong motivator, and leader, employees will be happy and customers will be satisfied. Do you have the right personality for franchise ownership? Ask yourself these questions:
- Do I have the ability to lead people?
- Do I enjoy and work well with people?
- Am I willing to learn, take direction and follow a plan?
- Am I a good listener and problem solver?
- Do I have a strong work ethic?
If your answers to these questions are yes, business ownership for you should be a strong consideration.
QUESTION #5: When is the best time to invest in a franchise?
When is the best time for you to become a franchise business owner? Only you can answer that question. Are you early in your career or have you been on the corporate treadmill for years? You may be thinking, “someday when I’ve saved enough money and my most expensive years are behind me, then the timing will be right.” Or you may be one of the many people I meet who say, “now that I’m getting closer to retirement, I should have taken the leap sooner.” As “they” say, “timing is everything.”
Entering into business ownership is a very personal decision. However, there are a few considerations to make. People generally make big changes when a life event occurs. It could be an overwhelming sensation you feel that being your own boss is the only thing that will make you happy in your career. Or it could be a career change event (termination, downsizing, rightsizing) that causes to you pause and consider, “are there other options I should evaluate before I make a decision to get another job?”
Maybe you’re in a position where the job options are not plentiful, pay is not adequate and rejections are discouraging. Some people settle for an employment option because it’s the path that seems the most safe and secure… until that new job is a disappointment or goes away. And the cycle continues, job after job.
When will the timing be right for you? If you’re reading this article, now may be the best time. Chances are good you should give franchise business ownership serious consideration. Seeking the expertise of an experienced franchise consultant will help you make an informed decision. As you consider franchise ownership, the proper guidance will arm you with the information you need to make decisions with confidence and take hold of the life you’ve always wanted.
Credits: Mark Pasma
