Laid Off? Downsized? Looking For A Career Change?

Maybe the Employer You’re Looking for is YOU!

By Ford R. Myers
President, Career Potential, LLC

Here at Career Potential, it seems like we hear about businesses merging, plants closing or production facilities moving overseas on a daily basis. These “business transitions” force out valuable employees — the very same people who often wind-up in our office seeking career help. Some of these “ex-employees” — tired of riding the corporate roller coaster — are finding professional and personal success as entrepreneurs.

There are only four paths toward business ownership: (1) Start a business “from scratch;” (2) Buy a franchise; (3) Buy a non-franchise business; (4) Become a consultant. Of these options, the most popular choice by far has been to buy a franchise.

Why Franchising is so Popular

With the increasing instability and uncertainty in Corporate America, and with a stock market that no longer offers the attractive investment opportunities it once did, franchising represents a great way to gain more control of your career and achieve your financial goals.

Business success requires going through a learning curve for the type of business you’re in. With franchising, the franchisor has already gone through that process and is highly motivated to share with you everything that has been learned. Franchises succeed because the franchisor has invested the resources to truly understand the business. There is a proven formula for success ready and waiting to be adopted by the new entrepreneur. How many non-franchise, independent businesses can say that?

And, because a franchise represents a large number of units with established track records, the buyer has access to much more of the data required for sound investment decisions than would be available with a non-franchise start-up.

Being able to study the actual performance of identical business entities is invaluable! And so is the contact you’ll have with other franchisees, who can provide real-world insights into what it takes to succeed in the specific business you’ve selected.

Primary Advantages of a Franchise Business:

  • The marketplace has already “tested” the franchise and found it to be successful.
  • Franchises have a 90%+ success rate, as compared to the extremely high failure rate for non-franchised business start-ups. (See chart, below.)
  • You leverage the franchisor’s established brand name and reputation.
  • Complete training and on-going consulting are available from the franchisor.
  • Managerial, operational, accounting and technology systems are already in place to facilitate your success.
  • The franchisor has collective buying power and passes those discounts to you.
  • Marketing and advertising for the business are supplied by the franchisor.
  • Franchisors insist that you are adequately capitalized, which helps you avoid the most common reason for business failure.
  • On-going research and development is provided by the franchisor.
  • The franchisor provides expertise and guidance in researching and selecting the best location for your new business.
  • With a franchise, the timeframe to reach profitability is shorter than it would be with a non-franchised business.
  • Franchises have a vested interest in your success. If you don’t succeed, the franchisor won’t succeed.

Franchise Facts

  • 44% of the American workforce said they are considering self-employment — a percentage that is almost four times higher than the number of people who are actually self-employed in the U.S. (12%), according to a March 2005 study by the world’s largest career transition firm.
  • A 2004 study by the International Franchise Association stated that franchising is responsible for 760,000 businesses, 18 million jobs, 14% of the private sector employment, and over $500 billion in payroll!
  • From January, 2000 to December, 2004 the performance of the top 50 franchises increased 34.5% compared to a drop of 20.1% in the S&P 500 during the same period.
  • Franchise businesses currently account for 42% of all retail sales in the US.
  • A recent Gallup Poll of almost 1,000 franchisees found that more than 94% considered their businesses to be successful; and 75% said that they would buy their franchise again if they “had it to do over.”
  • The U.S. Department of Commerce states that 90% of franchises are still in operation after 10 years, compared to just 18% for other forms of small business.
  • Franchise businesses employ more than 8.5 million Americans.
  • A 1999 study by The United States Chamber of Commerce found that 86% of franchises opened within the last five years were still under the same ownership and 97% of them were still open for business.
  • A U.S. Department of Commerce study conducted from 1971 to 1997 showed that less than 5% of franchise businesses were closed each year.
  • A U.S. Small Business Administration study conducted between 1978 to 1998 found that 62% of non-franchised businesses closed within the first 6 years of their existence due to failure, bankruptcy, etc.
  • USA Today recently reported that franchised businesses in the U.S. generate almost $1 trillion each year.
  • 1 out of every 12 businesses is a franchised business.
  • More than 300 franchises are sold every week in the U.S., which translates into one franchise business opening every 8 minutes in a typical business week.
  • In 2000, the median gross annual income, before taxes, of franchisees was in the $75,000 to $124,000 range, with over 30% of franchisees earning over $150,000 per year.

Business Success Rates graph

Common Characteristics of Successful Franchise Owners

1. Low tolerance for risk
Many people think that to buy a franchisee, you need to be a gambler. Nothing could be farther from the truth. Successful franchisees — especially those recently downsized from corporate careers — like to avoid risk! Any business start-up involves some risk of failure. But a strong franchise with a proven track record offers the highest likelihood of success (90%+ success rate), compared to all other business models. Successful franchisees do their homework, so they know what they’re getting into.

2. System orientation
People coming from a corporate background are used to working within a formal structure and are familiar with organizational policies and procedures. Successful franchisees also have the ability and desire to follow a proven system. They don’t want to “re-invent the wheel,” or have to figure-out the best way to do something. They want a system of operation that tells them the best way to do everything associated with the business.

3. Strong Work Ethic
Successful franchisees are highly motivated, and are willing to work hard to achieve success in their new business. This characteristic shows in their every action — putting in long hours, handling multiple tasks, taking pride in a job done right. The best franchisees know and accept this fact, and are happy to do what it takes to create success, especially in the first few years while they’re “getting their business off the ground.”

4. Well funded
Investing severance pay in yourself, instead of the unpredictable stock market, is a great way to start a franchise. The franchisee must have enough liquid capital, as well as total net worth, to meet the franchisor’s requirements. A good franchisor will not allow the potential franchisee to enter into the business without proper level of initial investment. The franchisee must also have good credit, which is essential in qualifying for a loan, if necessary.

5. Positive attitude
Franchisors always look closely at the prospective franchisees attitude. Are they asking a lot of questions about failure in the business, or do they focus on how to succeed? Do they genuinely want to learn everything they can about the opportunity? Do they follow-through on their commitments, and are they strongly motivated? Are they resourceful, consistent, self-directed and professional in their approach? Are they “team players” who will work to make not only their own business successful, but will they also contribute to the continuing success of the whole franchise system?

6. Interpersonal skills
Though this characteristic is listed last, it’s probably the most important of all. Successful franchisees always have strong interpersonal skills — developed from years of working with a variety of people in various positions. Franchisees need to enjoy spending time with other people. If they do not enjoy a lot of human interaction, they will tend to become stressed, which can decrease their chances of success over time.

Conclusion

If you’ve been laid-off, or have always yearned to own your own business, or just want to escape the “corporate rat race,” consider the entrepreneurial alternative! Of course, this path is not for everyone. But franchising has never been more popular, and the range of opportunities has never been broader than it is right now. With so many exciting businesses to choose from, there’s a franchise well-suited to almost any person or situation.

Ask yourself if you possess the qualities, desires and goals outlined above. If the answer is “yes,” then franchising could very well be the solution you’ve been looking for! If you’d like to explore this option in your own career, contact Career Potential any time.

About the Author:
Ford R. Myers is an award-winning career coach and President of Career Potential, LLC. He is author of the best-seller, Get The Job You Want, Even When No One’s Hiring. Ford’s firm helps clients take charge of their careers, create the work they love, and earn what they deserve! He has held senior consulting positions at three of the nation’s largest career service firms. Ford’s articles and interviews have appeared in hundreds of magazines, newspapers, television and radio networks. He has also conducted presentations at many companies, associations and universities. Learn more at www.CareerPotential.com or contact Ford directly at 1-800-972-6588.

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