Happy New Year! One of the top questions I was asked in 2017 is should I go the startup route or purchase a franchise, so I thought I’d start out 2018 addressing that. The first step is to determine if you would make a good entrepreneur, and then consider if franchising is the right path to becoming a business owner. Sixty-five percent of Americans want to be their own boss. Let’s face it, a lot of us think we’re smarter than our bosses, so being our own boss is a natural desire. An entrepreneur is defined as:
- “One who pursues opportunity beyond the resources currently controlled”
- “A person who sees an opportunity and creates an organization to pursue it”
- “A dreamer who attempts to turn an idea into a profitable reality”
- “Anyone who assumes the risk and responsibility for starting and managing a business”
- “Anyone who takes the risk of starting a business for the purpose of making a profit”
Once you determine if this describes you, it’s important to understand the advantages and disadvantages of being an entrepreneur. Here are a few:
|Advantages of Entrepreneurship||Disadvantages of Entrepreneurship|
|Freedom and independence||Risk|
|Control over major aspects of your life||Responsibility and pressure|
|An outlet for creativity||Fear of failure|
|Excitement||Obstacles and frustration|
|Satisfaction and sense of achievement||Loneliness|
|Status and recognition||More work|
|Job security—can’t be fired or laid off||Less time to spend with family/friends|
|Unlimited income potential||Less financial security|
|Growth of initial investment||Income fluctuation|
If you determine that an entrepreneur describes you, and that you’re comforable with the advantages and disadvantages, then you can begin to explore what may be the best path for you to become a business owner. Franchising isn’t for everyone. If you have an original idea that you’ve been working on and are determined to bring that idea or product to a new marketplace, a startup is your best option. However, for people who aren’t looking to bring an original idea to market, but are excited about the idea of running a business, franchising should be a top consideration. Here are questions to ask yourself to determine if you would make a good franchise entrepreneur, or, frantrepreneur:
- Can you follow someone else’s rules, even when you think you may have a better way?
- Are you prepared to accept coaching and advice on how to run your business from a franchisor’s field and headquarter’s staff?
- If the franchisor turns down your great idea for changing the system, can you live with that?
- Can you trust that a franchisor is working for the benefit of the entire system—even when their decisions do not necessarily go your way?
- Are you willing to share financial information and prepare required reports regularly?
- Are you willing, able, and eager to learn new skills?
- Can you set aside old habits and beliefs to follow a franchise system?
Keep in mind, while franchise systems vary and some are more fluid than others, they are all still systems that are working together to create, maintain, and grow business. They are not going to allow an owner to make a mistake that could be detrimental to the business or brand—which is something most owners are happy about. You are part of a team—in business for yourself, but not by yourself.