While it may seem counter-intuitive, starting your own business can actually be your low-risk career move. That’s because continuing as an employee is a risky proposition in today’s economy.
The data shows that the longer you remain an employee, the higher your risk of being laid off or downsized, while the longer you remain a business owner, the lower your risk of finding yourself without a job.
While it’s true that the first year of business ownership can be riskier than the first year of new employment, just like building equity in a new house, you create a future with a business of your own.
One of the reasons starting a business from scratch carries risks is that you have to operationalize your vision. You need to figure out the cost of your expenditures — for everything from marketing, setting up an office, hiring employees, etc — to get your business off the ground. Then, the big question is how much revenue will you earn to cover those expenditures? And do you have the capital to keep it running while you figure it all out?
Obviously, revenue-building is a gradual process as you establish a customer base. Unless you’ve done it before, you have to guess your likely costs and eventual revenue.
A great way to minimize your risk and remove the guesswork is to invest in a franchise — where everything has been done many times before. A good franchise already has a proven operating system that can nearly guarantee success — so long as you’re committed to follow that system.
Sure, being a business owner requires entrepreneurial thinking, but so does being an employee these days. Employment experts now estimate employees will need to reinvent themselves every three years. The difference is business owners get to keep all of their profits.
So when you factor in the reduced risk of buying into a great franchise system and the increased risk of continuing as an employee, it certainly seems worthwhile to start looking into whether you might be able to find the perfect franchise to match your interests and your skills and take control of your career destiny.
The Perks Of A Good Franchise Include:
A system of support and training.
Not only will you have lots of phone and in-person meetings before you ever sign any contracts, you will also have training for yourself and your employees on everything from how to set up your store or office to ongoing support to answer questions as they arise.
A network of fellow franchisees.
As part of your research, you should interview lots of franchisees to see how they’re doing, whether the franchisor has lived up to its promises and whether they would make the same purchase again. Are their profits what they expected? This group can offer invaluable insight into the ongoing issues they face in the very same business you will enter.
Knowledge of how much it will cost.
All franchise companies are required by law to file a Franchise Disclosure Document (FDD), which lists everything from the initial and ongoing costs, plus details on operations. Some franchisors will even list earnings claims.
A full accounting of potential financial pitfalls.
You can also learn in the FDD if the franchisor has any financial irregularities in his past, from litigation to a history of bankruptcy filings. Other questions you can get answered include: What types of restrictions might exist for selling the franchise? How are territories allotted? After all, you don’t want the same business locating across the street from you.
While you can learn a great deal from your own research, we also strongly recommend you consult a franchise attorney and accountant to help with some of the fine print.
A good franchise coach, who has already vetted many of the franchises, can also offer invaluable advice as you go through your selection process. So, when you open your business, you can feel confident that you’ve got all the answers you need to succeed.
About the author
Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-5489.
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