There are many benefits to owning your own business. You may have been thinking about starting a business for years while working for someone else. Or, you may have previously owned businesses and enjoyed the rewards that come from running a successful enterprise. If you are a first-timer, you will want to ensure you have taken these steps before making the final plunge.
If you are considering starting your own business, you have probably done your due diligence. Chances are you have talked with other business owners, friends, and family for information and support for your business idea. Enthusiasm can be very high when starting your own business. You envision yourself having time off to play golf or vacation without asking permission. You feel the pride of ownership and excitement of promoting your business to the community. You look into the future and see a secure retirement, or being able to pass your business down to your children. You anticipate the satisfaction of leaving a legacy. Okay, now back to reality.
While the benefits of starting your own business can be great, so can the risks. If you are acquiring an existing business, it goes without saying that you need to have their financials examined and evaluated by a professional accountant or CPA. Other considerations are location, past performance, reputation, and viability for future growth. There are professional business consultants who can assist with this process. If you have your own idea for starting a business, be extra cautious. There are many considerations that could potentially make or break your new venture. Start by consulting an attorney, tax professional, and business consultant for professional guidance in each area affecting your ability to succeed.
One attractive alternative for starting your own business without acquiring a business from someone who may, or may not, have a proven formula for success, is franchising. Franchising is designed to be profitable because the franchisor has proven their idea is viable and others are replicating the system and becoming profitable. One cautionary note, franchising is not the same thing as having a job. Purchasing a franchise system implies that you are, in essence, starting your own business and does not guarantee that you will receive regular compensation for your efforts. Franchising is a long-term investment opportunity, not a vehicle by which you receive a paycheck on a regular basis. If the idea of starting a business in franchising intrigues you, take these three issues into consideration:
* The first question to ask yourself is whether the franchise product or service is a good fit for your personality and skill set. Buying a franchise that is not suited to your personality is a recipe for disaster. Your enthusiasm will be low, you will never feel comfortable selling the product or service, and you are likely to always feel that you have to struggle to succeed. You must feel comfortable and enthusiastic before signing on the dotted line.
* The second consideration is how capable you are of starting a business and running it successfully. While the franchisor may provide training and support, it is ultimately up to you to keep it growing. Thoroughly investigate what knowledge and skills are required for the franchise system. If you are excited about the franchise model, but lack skills and knowledge, will you be able to acquire enough training to offset lack of experience and prior knowledge? Can you create a support system through employees and consultants to compensate for your areas of weakness?
* Your third, and possibly most important, consideration is the franchisor. One of the primary reasons for franchises failing is due to franchisors not committed to internal growth and success of their franchisees. Initial and ongoing training and support are critical to the success of the business operator. Whether learning new technologies that affect your operation, or understanding new product roll-outs, the franchisee must be not only in the loop, but ahead of the game. Competition is fierce and it is imperative to use any and all tools available to help ensure your success. Choose a franchisor that is willing to devote as much effort to helping you succeed as they are in building the franchise system and recruiting new franchisees.
Starting your own business requires a huge commitment of time, effort and willingness to pay the price for success. When you look at any successful business, you will find a dedicated business owner who has made sacrifices for that success. If you are an instant gratification person, starting a business is probably not the best decision. Before starting any business, you need to understand five critical things: how much time will be required per day and per week; what special or ongoing training will be needed; how many, and what type, employees you will need; what your return on investment will be and how long it will take before you see a profit; and, how much personal involvement you need to have in the business in terms of back-end administrative work, frontline customer relationship building, and employee supervision.
Keep those dreams of golf, vacations, pride of ownership, and your name of a building in front of you, but be willing to take the risk, work harder than you ever have, and expect setbacks and fluctuations on your road to getting there.
