Making the decision to become a business owner can lead to many conflicting emotions with the excitement of pursuing your entrepreneurial dreams, but also the unknown in starting a new chapter of your life. During this time, it’s important to manage this mix of emotions so you can make the best decisions for your future – and your family.
Before seriously considering any specific business opportunity, the very first step is to decide if becoming a business owner is right for you. To help you make this decision, check out my previous post here. It includes a discussion of three core values that successful business owners share.
Once you decide that you want to become a business owner, the next important step is committing yourself to that decision. Over the years, I’ve seen people go back and forth, getting caught up in the analysis of minor details of a particular business before finally committing to the decision of whether or not they are going to take action. This “hand wringing” over minor details of the business may mean you’ve lost focus on your long term goals, and you may not even realize that you are procrastinating on making a decision. It’s a natural part of the process, and you should expect a bit of an emotional roller coaster as part of the decision. But you can manage this part of the roller coaster by staying focused on your long term goals, and by making a firm commitment to yourself up front to bring your research to a conclusion one way or the other.
What can impede this decision is when people try to find the “perfect time” to open a business. While it is crucial to pick a timeframe that makes sense, there’s always a way to find an excuse to postpone. If you’re about to go through a major life change, like having your first child, you may need to reevaluate if this time makes sense to start a business. But it’s important to be honest with yourself and see if you are making excuses that are viable or whether you’re using them as a way to justify your lack of action.
If you don’t make achieving your goals and dreams a priority, then who will? This is your dream, your passion, so if you don’t make this a priority, it will not happen.
So why do we try to get in the way of our own dreams?
When making a major career change, like opening a franchise, there can always be a fear of the unknown, or a fear of failure. Whether it’s the fear of failing yourself, your business partner, or your staff, it’s only human to have these feelings. While no one goes into a new venture assuming they are going to fail, there are no guarantees in business, so you have to give yourself permission to make mistakes along the way and realize that there will be some bumps in the road here and there.
To help set yourself up for success, there are three questions that I challenge prospective franchisees to ask when evaluating a business:
Will you be good at it? Take a look your current skill set compared with the day to day activities that are required in your role with this business. While you don’t have to be an expert in the industry, you need to embrace and understand the basic activities required to run this business.
Is it a business that you will enjoy? Is this a business that will make you jump out of bed and be excited to go to work on most days? Do you have passion for what you’ll be doing? People have different motivations for doing what they do, but as the saying goes – life is too short to do something you don’t enjoy!
Will this business be able to provide enough income to allow you to have the lifestyle that you desire? There is no shortage of franchise marketing materials out there touting the great “American Dream” of owning your own business. But it’s important to cut through the clutter and look closely at the investment costs, the potential returns on investment, and the commitment of time and effort that it will take to bring your business to profitability and beyond. As I mentioned before and in my previous post, there are no guarantees when starting a new business, and you must have a long term perspective with realistic expectations. There are lots of great businesses out there, but at the end of the day if it doesn’t provide the lifestyle that you desire (after the startup phase) for you and your family, it’s likely to be a bumpy ride.
Everything I’ve discussed so far is reflective and inwardly focused on you. What can help in managing these emotions is arming yourself with hard facts and doing your homework on the franchisor. I often encourage potential franchisees to ask these questions when evaluating a particular franchisor:
Does this franchise system work? Even if you meet all of the criteria above, if the system as a whole doesn’t have a solid foundation and a proven system, it will make it very hard for you to personally find success. When researching a franchise, it is crucial to examine the Franchise Disclosure Document (FDD). Researching things like Item 20, which will tell how many units have closed in the last three years, and seeing where the system is today will help you understand if you are buying into a brand that will help elevate you to success.
What are the true upfront financial costs for this business? All franchises are required to disclose costs in Item 7 of the FDD. After learning this number, it’s also important to consider how the costs may differ based on the market your business is in. For example, if you are opening an office in Tucson versus New York City, the real estate costs are going to be much different in these two cities. It’s important to apply the FDD to your local market, and to validate what the FDD says with the current franchisees of the system.
Can other franchisees validate the business model? It is very important to call other franchisees in the system and ask them about their own experiences. This will not only provide you with validation on whether or not the startup costs are accurate, but these franchisees can provide testimonials on the success they’ve found and how quickly they reached that success. It’s important to understand how long they have been open for, and learn about the success they are having today, as well as what is a realistic timeline for you to reach a sufficient income to support your lifestyle. These individuals are your allies, since they’ve once been in the shoes you stand in today.
Most “purchases” in life are made based on emotions – how you “feel” about something motivates you to either buy it, or not. That will likely be the case with your business purchase as well, which makes sense because you have to be passionate about whatever business you choose. Remember, if you’ve done your homework your emotions were likely at least partially formed by the factual research you did about the business. So, go ahead, be emotional, and prepare yourself for that roller coaster ride as you navigate through your discernment process. At the end, when your gut mixes those emotions and facts together, you’ll make the right decision!