Jump to Main Content
USA flagAn Official Website of the United States Government
Industry Word

Blogs.Industry Word

Register

What Problem Are You Trying To Solve By Buying A Franchise?

Comment Count:
3

Comments welcome on this page. See Rules of Conduct.

What Problem Are You Trying To Solve By Buying A Franchise?

By FranchiseKing, Guest Blogger
Published: July 26, 2010

Is that a fair question? Will that question give you a reason to slow things down a bit, if yo;re already in the throes of franchise exploration? Good!

Are you currently experiencing one of the following problems?

Out of work/ca-t find a job

Miserable in your current job

Not making enough money

Working too many hours (for someone else)

If yo-re having career-related problems like the ones I just named, maybe i's time to look into franchise or even non-franchise ownership ideas. But, are you willing to sacrifice a lot of the things that you usually get as an employee? Things like;

A regular paycheck

Health insurance

Paid vacations

A routine

Matching retirement plans

Most of you are probably thinking that it would be well worth giving those things up for some serenity and peace of mind. After all, yo're in serious career-related pain, right?

Is it possible that yo'd be trading one kind of pain, for another kind? I certainly do't want you to think that 'm being negative here. But, there are some drawbacks to business ownership.

Le's talk about your paycheck. Yo're not going to get one (for a while.) Of course, you could apply for a large enough loan that would allow you to take a small salary for a while, but yo'd be paying interest on it. A start-up business, franchise or not, typically doesn't bring in enough revenue at first to allow you to take money out for a regular paycheck. Can you handle that?

Another thing that you won't typically find in a start-up franchise is a health insurance plan. (I have heard of some franchisors that have a health insurance plan/pool set up with existing franchisees, but it's a rarity.) If your spouse or significant other happens to have a job with health insurance, treat her/him like royalty. This is something you'd want to keep, for as long as possible. It's a major expense for small business owners.

Other things that you're used to getting as an employee, like retirement plans with matching funds contributed to your account by your employer, will be going away. You can always set up a plan for your business, but, it's different. (It's still good though!)

Would you like a paid vacation when you become your own boss? Fantastic. Write yourself a check, and go on vacation. (You may be a tad nervous when you finally do get to take a vacation, because someone else will be running the show.) You'll need to have some flexibility, too. There are certain times that you just won't be able to go, especially if your business has some seasonality to it. Erase the term two week paid vacation from your everyday vocabulary. You're the boss now.

Transitioning from employee to employer can be a tough transition. It's not for everybody. For some, it could be a super-positive, life-changing event. For others, it may bring a new set of problems that are much more intense that being out of work, or being stuck in a lousy employment situation.

The last statement was not meant to scare you, but to make sure that you look at both sides of the business ownership equation.

If you decide to start a search for that perfect business, please make sure that you know what it is that you're hoping to find. Are you hoping for 'the answer to all your problems?' Or, are you just really burned out with the corporate culture? Could you be running away from that?

Investing in a business of your own really could turn out to be a fantastic experience for you. You may be able to experience lots of freedom and control in your professional life. You could end up building a substantial business.

You are the one that has to decide if investing in a business of your own can solve your problems. Take your time, and do your homework. You'll get your answers.

Additional Resources:


6 Tips for Finding a Business Idea and Turning it into an Entrepreneurial Reality

Do You Have That Special Personality Needed To Be A Franchise Owner?

Researching That Franchise

Joel 1a.jpg

(The Franchise King ®, Joel Libava, is president of Franchise Selection Specialists Inc. Joel helps those interested in exploring franchise ownership all over the country find great opportunities that are a great match for them. He is frequently called on by the media for his no-spin insights on the world of franchising. Joel is also deeply entrenched in social media. His latest project is an educational one, Franchise Online University.com)

About the Author:

Joel Libava

Guest Blogger

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and is a franchise ownership advisor. He shows people how to carefully choose and properly research franchises.   

Comments:

In addition to having a professional resume, examining business opportunities is a wise choice to do. A franchise is a good choice for opening a business because you have some built in brand name recognition and an operations structure in place. This can be a good choice for some while others like the dynamics of a new business that they create on their own. It is definitely important to consider the pros and cons of each franchise opportunity and weigh it against the investment of time, energy, commitment, and potential profitability.
Thanks for stopping by the Business.Gov Community area. I appreciate your comment. It's true; sometimes, folks don't get all the information. There are certainly a lot more resources available now, (because of the internet) for would-be franchise owners to get the facts-or at least learn how to get them. I've produced a couple of them myself, that I'm quite proud of. As for starting a business by yourself...that is also risky. It depends. Franchise and non-franchise businesses both have advantages and disadvantages. For some, it's still better than a dead-end job. As I said, it just depends The Franchise King® Joel Libava
Before buying a franchise ask the following question: Are you buying a business or a job? Lot of franchisees have bought a job and they are stuck because they can not afford lose their life saving they invested in buying the franchise. Even though there are laws and regulations about franchising, a prospective buyer does not get all the information about the business. Most of the information provided is rosy and with an intent to sell the franchise. Once sold, it is too late. If you have enough money and time, start your own business and be your own boss. That way you will not have to pay royalty and sometimes unnecessary marketing/advertising fees. If you really want to run a business why buy franchise? Franchisors make lot of money by selling franchises. Franchisees have to work real hard to make ends meet. Call, visit, and personally talk with current franchise owners, at least 10 to 15. Ask them hard questions and  try to get the honest answers. Some franchisees are afraid to tell the real truth because they are scared.  If you do not have time to talk with 10 to 15 current franchisees do not even bother about buying a franchise.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!