I am here to tell you there is a way to overcome that fear, franchise business ownership.
The franchise business model is a proven formula that you can easily follow. It is a great way to be in business for yourself and not by yourself. That is why there are 773,603 franchise establishments in 2019 and franchising a major driving factor in the US economy.
Not everyone is suited to own their own Franchise. We have spoken to many people who are perfectly happy working for someone else. Here are some Facts and Stats you may find interesting.
Employee- Facts & Stats
Average American works >8.5 hours each day. This means more time spent working than:
Spending time with family and friends
A typical 40-year career which consists of working 50 weeks a year, 8.5 hour work days, will mean working 86,000 hours for the average Americans lifetime.
The average American will spend over $600K in interest throughout their working life.
Only 45% of Americans ARE satisfied with their jobs. This means that the majority (55%) of Americans are unsatisfied with their current job.
16% drop in job-satisfaction in just over 20 years
Unsatisfactory rates spring from disappointment in benefits, job stability, and growth
26% of Employees were dissatisfied with the outlook on potential future promotions (up from 19% in 2008)
Less than 50% of employees were completely satisfied with their job security; with 30% of workers being worried about being laid off in the near future.
Roughly 34% of employees were dissatisfied with the amount of on-the-job stress.
There are currently more workers than jobs. This causes most workers to stay in these less-than-satisfactory conditions.
As an employee, you are capped at contributing $16,500 pre-taxed into retirement fund annually; a business owner can contribute up to $50,000, pre-taxed.
The average account balance in retirement plans according to an Employee Benefit Research Institute (or EBRI) study stated that participants in their 60’s had saved $144,004. Retirees should pull money from their 401k account at a withdrawal rate of 4%/year. When they allowing for an adjustment in inflation, this provides the average 401k holder in their 60’s an annual income of only $5,760, or $480 each month.
The poverty level for 2011 was set at $15,130 (total yearly income) for a family of two or $1,261 a month.
According to the 2010 Census Bureau, 79% of the population is a salary or private wage employee. Of that 79%, only 3.9% were earning more than $200K per year with the average working American sitting in the $50-$75K range.
Business Ownership and Franchise- Facts & Stats
Two-thirds of all American millionaires are business owners.
In a study by Scott Shane, a franchise scholar, the success rate of a franchise (62%) is nearly double that of an independent business (35%) after 4 years of operations.
In 2011, franchise establishments employed nearly 8 million people with 735K units.
“Active” Baby Boomers not quite ready or able to retire are turning to the $1.5 trillion segments of franchise businesses.
As a business owner, you could be making the same amount in your business as in your last employment. However, you can keep more of your earnings with smart & legal tax deductions.
As of 2009, entrepreneurial efforts in the U.S. were at a 14 year high, with 558,000 new businesses being started each month. It’s great for the economy and it’s an excellent opportunity for the business owner. Today, labor is abundant and less expensive, equipment and resources are discounted & real estate and rent is lower.
Based on a study of an entrepreneur followed by the FBA in 2010, the initial investment, such as time, money, commitment, and frustration were all drastically reduced when investing in a franchise versus starting an independent business. The franchise business offers support, provides the opportunity to become passive and also has a considerably shorter learning curve (on average 9 months vs. 2.5 years).
With a franchise, you often have sales assistance available.
Upon purchasing a franchise you are provided an FDD, or Franchise Disclosure Document. This document includes all the background information of the franchise.
How many years it has been in business
Lawsuits and litigation history of the franchise and its executives
Initial and ongoing costs
Outlines what the franchisor offers to a franchisee
A list of current and former franchisees
The franchise financial statement and earnings information when it is available
As a business owner purchasing a franchise you are provided with a complete system. You can be confident in your marketing plan, benchmarks, goals, and support that are required to make your business thrive.
Thousands of franchises are available; some are brand new (under 1 year) and some have decades of industry experience.
There are a plethora of options available with franchise systems. Some franchises allow you to operate out of your home; have or have no employees; have or have no inventory or be a passive owner.
Banks are more likely to loan money to a successful franchise. They are willing to do this for a franchise compared to a start-up business because of a lower risk of repayment default.
The purchase of a franchise is a major decision. You should only make that decision after retaining and consulting with competent legal and business professionals.
Employee Facts and Stats
Information can be found in The United States Department of Labor, The Bureau of Labor Statistics
A fact mathematically taken from the chart found on The United States Department of Labor, The
Bureau of Labor Statistics website above.
Sources are cited within the graphic from Credit Loan
This information can be found in the fifth paragraph on http://www.irs.gov/pub/irs-pdf/p560.pdf
Information about Retirement Savings and 401k’s http://www.mint.com/blog/planning/cheer-up-yourenot-as-far-behind-on-retirement-savings-as-you-think/
The figures are the 2012 HHS poverty guidelines as of January 26, 2012. (Source: http://aspe.hhs.gov/poverty/12poverty.shtml)Monthly percentage data calculated by FHCE and rounded to the nearest dollar.
A Franchise Brokers Association Independent Study
Business and Franchise Facts and Stats
Information can be found in The Entrepreneur Café, LLC website
As a franchise broker, we often ask this question and we hear answers such as “There is a lot of competition in this market” or “I don’t know if people are interested in these services” and most commonly “I don’t know if I can make enough money to live on.”
When the smoke clears, it is not about the product or services that are being sold or even the money – it is about fear. The fear of failure. We tell our clients that if you don’t have a little fear, we would be worried. But too much fear can cause decision paralysis. Fear can be a good thing and it has it place – in moderation. Don’t let fear keep you from your dreams.
There are ways to overcome your fear of failure and be able to forge ahead. First, face your fears in order to change your attitude. Secondly, make a plan for success.
Facing your Fear of Failure
When it comes to business, the biggest fear is that you will lose all your money and possessions. Another fear is shame, which can elicit feelings like anger, frustration and regret. Failure does not make you a bad person nor does it physically change you. The fear of losing all your possessions/money is not very likely. You are able to structure your business in a way to limit liability and protect yourself. You will need to know how much money you are comfortable losing in the worst-case scenario. Nothing is ever guaranteed.
There are two things you can do: face the fear and focus on aspects you can control.
Face the fear. Accept that failure makes you afraid and ashamed. Find advisors you can trust and bring these feeling to the surface with them. This will help prevent your unconscious from sabotaging your efforts and it will get assurance from them that can bolster your self-worth and minimize the threat of disappointing them.
Focus on the aspects that you can control. For example, worrying about whether people will want your product or service. A franchise can minimize this fear because they have already forged a process that has proven successful to others.
Make a Plan for Success
You already know how to fail by doing nothing. You need to learn how to succeed.
Do your research – While you cannot possibly have every piece of information, collecting the most important data will help you make a smarter decision and help alleviate the fear of failing. A franchise has already completed a lot of this information and has used it to makes its franchisees successful. As a broker, we will help you in gathering all the data and information to help you make a smart decision.
Create a Plan -Writing a business plan is not easy but it is worth the time and effort. The business plan can act as a roadmap to success. Many franchises have already created business plan templates you can use, you will just need to customize it to your market.
Make a Plan B – Making a Plan B is NOT setting you up for failure. It shows that you are a smart business owner. Starting a business is taking a measured risk and by planning accordingly, you can build your confidence in your decisions. Your Plan B does not have to be an alternative course that you take if you fail. It can be a tool to help you consider alternative paths.
Get Support – When to starting a business alone you can get stuck in your own self-doubt. You will need a support system to help you on your journey. This is the beauty of a franchise, you are in business for yourself but not by yourself. You are buying into an already existing and successful support system.
My point is that fear is not a bad thing. It can help you be more successful. It can take outside your comfort zone to learn something valuable. Owning a franchise can be one of the most rewarding experiences of your life and we would not want you to miss out just because of a fear of failure.
Our role is to help you through this process and to help you face those fears. As franchise owners for 16 years, we have faced those fears. We had our doubts. But in the end, it was the best decision we ever made.
At the time it seemed to be a waste of time. We understood the concept – non-medical in home care for seniors. We knew it was going to involve managing a lot of people. We knew they had a system in place and other franchisees were successful even though it was a new franchise. We jumped in our car and decided to take a road trip out to Dayton, Ohio to visit Comfort Keepers. Why not combine seeing America and have a little fun on the way (I fell in love with the city of Pittsburgh, it is really a neat city).
We drive up to the office building excited. We were not sure of what to expect and what type of dog and pony show we were about to see. Clustered together with some other couples we were herded into the conference / training room and the founders began to talk about how their company started and the need the fulfilled in their community. We began to relate their experiences with our own family members and saw how we can make a difference in the lives of others. SOLD.
Were we being too hasty? We had only visited 1 franchise and there was one more like it we knew about. Why not look at the competitor? What was their corporate culture like? We seemed to fit in with Comfort Keepers. Calls were made to some of the franchisees, we asked my Dad, who is a CPA to look at their Profit and Loss and Balance Sheet for us and to give us questions to ask about the soundness of their company.
We still had jobs. We were beginning to hate what we were doing and how we were being treated. The thoughts of taking control of our lives was dominating our conversations. The fear of doing something new would always bring us back to the fact that we still had jobs. One by one our colleagues began to disappear. Mike and I realized the clock was ticking faster and it was time to say yes.