Are You Thinking About Becoming a Franchise Owner for The Money?
by FranchiseKing, Guest Blogger
- Created: January 4, 2011, 3:43 am
- Updated: February 1, 2011, 10:46 am
Obviously, if you're going to invest in a business of your own, you'll want to make some money, right? But, is that all you're focused on? Will only making money do it for you?
Most of the prospective franchise owners that I've consulted with don't even want to make lots of money! Are you surprised?
Now, I'm not saying that these folks don't tell me things like, 'Joel, of course I'd be fine making a lot of money.' or, 'I'm certainly not going to turn down $200,000 a year in profits from my franchise business.' What I am saying, is that making huge amounts of money as a franchisee isn't top of mind for almost everyone I've ever worked with.
But, income potential as a franchise owner* is one of the main reasons that folks do consider franchise ownership.
Lots of people have made lots of money as franchise owners. But, they had to be patient. Their paychecks took a while to get printed. Yours will too.
As a new franchise owner, you're not going to get a paycheck 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 you'd be paying interest on it. A start-up business, franchise or not, typically does't bring in enough revenue at first to allow you to take money out for a regular paycheck. Can you handle that? Or, is it going to be a problem?
If you're like most people 've worked with, you'll be really focused on the 'how much can I make' question during your franchise research. That's completely normal.
But, there's more to franchise, or even non-franchise business ownership, than just the money.
I've met with folks that have been downsized way too many times and want to have more control in their professional lives. Owning your own business allows that.
I've worked with some people that have invested in businesses of their own because they've wanted to involve their family, and leave some type of legacy for their children.
On more than one occasion, I've worked with people who I've always wanted to give back to their local communities, and starting a new business locally, allows that. Local contractors may be used to do the storeâ€™s build-out, some new permanent jobs may be created, and the franchise sales help the tax base.
I say that around 30% of the folks that I've consulted with have wanted to grow a nice-sized business; they've wanted to make some serious money, and were open to things like multi-unit franchise ownership, and purchasing large territories.
Some of them were executive-level candidates who were pretty realistic about the time it takes to get there. They understood company financials, had drawn up business plans in the past, and knew how to do sales forecasting. They were willing to be fairly patient.
Some were what I call dreamers. Their expectations were a tad unrealistic. They were thinking six figures, before they even started learning about franchising.
If you invest in a start-up franchise, you're probably not going to make a six-figure income in the first year. (Note that I said probably. One never knows. I've just never seen it with my own two eyes.)
Any type of start-up business takes time to grow. There are loans to pay off, there's inventory to buy, employees to pay, and a myriad of other expenses one must take on as a small business owner. If it's a franchise business, you'll have to pay royalties to the franchisor, too.
Making money is an important part of business ownership, and I want you to make as much as possible. Just be patient.
*Non-government website link
The Franchise KingÂ®, Joel Libava, is president of Franchise Selection Specialists Inc. Joel provides franchise advisory services to those interested in exploring franchise ownership, by showing them how to select and research franchise opportunities. He is frequently called on by the media for his no-spin insights on the world of franchising. You can follow Joel on his award winning blog-The Franchise King Blog
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