Budding Entrepreneur? Why Franchising is the Best Choice for You

Franchising is an excellent choice for the first, second, or even third-time entrepreneur.

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Further, business leaders, namely executives who are passionate and have a heart for business and seeing businesses succeed at their local level, often become successful entrepreneurs in the business services realm of franchising. 

For high-level executives especially, becoming a successful franchisee is usually a painless—and very profitable—step toward entrepreneurship. The reason franchising works so well for high-level executives is that usually, these executives are not ready to retire, but don’t want to reinvent the wheel either. Or perhaps they were laid off or asked to relocate and decided to take a severance package instead.

One of our very own business coaching franchisees decided to do the latter, rather than moving her children from the school they loved to follow her job as a pharmaceutical executive. Ten years later, this former executive-turned-business-owner is not only thriving as a franchisee, but she has been able to create the life and lifestyle, she always wanted.

Leverage experience and knowledge

Many of our 1,000-plus franchisees come from a leadership role in the corporate world, with just the right amount of liquid capital to invest in a business services franchise. Even better news about this type of franchise is that, unlike the fast food industry or other types of franchises, in the business services sector of franchising, there is no required build-out costs. Franchisees can simply leverage their experience and knowledge with a single monetary investment in a tried and proven system.

Startups vs franchises

According to the National Venture Capital Association, an estimated 25 to 30 percent of venture-backed businesses (startups) fail. Some estimates tend to be much higher, with up to a 90 percent failure rate, depending on which statistics you use. According to U.S. Census data, fewer than half of the “startups” established between 1977 stayed in business for more than five years.

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To the contrary, reports from entrepreneur.com and about.com among others show that franchises have success rates averaging 90 percent over approximately 80 different industries.

The idea of business ownership is not only attractive to most people, but it also can feel a little scary to new entrepreneurs wanting to take the leap from the safety net of full time employment to going into their own business. This is why I say that franchising is an excellent way to venture into entrepreneurship. With its tried and proven system, and a continual support team, franchising is a way to go into business for yourself, but not by yourself.

The fact, too, that there are so many different industries to choose from in the world of franchises, at equally diverse price ranges, makes franchising far less risky than trying to build a new business from scratch while still being able to choose something affordable as well as interesting to you, as a business owner.

Being an entrepreneur

The main thing I do caution people about, when investing in a franchise, is to remember, you are not in the business of haircutting (or dog grooming, or cake-baking, etc.) You are in the business of franchising. This is why I really advise people to not choose a franchise in an industry that is near and dear to your heart.

Just because you like animals, doesn’t mean you would be a good owner of a dog-grooming business. And just because you are good at styling hair, doesn’t mean you would make a great owner of a hair salon. As long as you keep in mind that you are in the business of business when investing in a franchise, you are likely to be very successful as an entrepreneur.

It is when people forget to work on the business and try to work in the business that they run into a problem zone. Someone who works on the business is networking, trying to bring in new business, completing reports essential to the franchise. Someone working in the business is doing all of the above, plus cutting the hair, or bathing the dogs, or baking the cakes. They have just gone and bought themselves a job, rather than their freedom.

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Business ownership should do just that…buy you your freedom, which is  exactly why the franchising model is the right model for the budding  entrepreneur.