At Monkey Bizness, we talk with people almost daily about their dreams and aspirations and if Monkey Bizness fits into them. As the president of a company that sells franchises, as you would imagine, I am a big believer in the power a franchise can offer to people. However, it’s not for everyone. Below is a list of 4 reasons you should maybe avoid starting a franchise.
- You Need Immediate Cash Flow
This might not be solely a reason to avoid starting a franchise, rather this is a reason to avoid starting a business altogether. I was talking with someone last week who was in a market Monkey Bizness really wants to be in. He mentioned to me that where they are in their life right now, his family needs both his and his wife’s income to survive. If that is the case, I told him he should think twice about starting a business. All those statistics you have read regarding how long it takes to pull income out of a new business are true. Depending on the business, it will take 1 to 5 years. However, all is not lost…..there is a solution for those that need an income but also want to be a business owner. You can look to buy an existing business. While the capital investment may be higher, you can often have an immediate income stream.
- Your Stating a Business in a Field You Already Work In
There are a lot of reasons to start a franchise rather than a business on your own. One big reason is the level of knowledge and expertise a franchisor brings to the field they are operating in. However, if you already work in the field you want to start a business in, then I would think twice about franchising. Let me give you an example…I am a Certified Public Accountant. I worked in this field for 10 years and thought long and hard about starting own small practice. There are some great franchises out there that specifically target CPAs. Some bring some legitimate value, such as proven sales techniques and client development practices. However, for me, I did not need that as I had worked in this field for many years and was confident in my ability to start a small firm on my own.
- You Lack Passion for the Business
A lot of people want to start their own business. Because of the level of support and structure a franchise provides, we talk with a lot of people who think it “might be cool to start a Monkey Bizness”. They also freely admit they are looking at a quick service restaurant, a salon, and an e-cig store as well. These are 4 things that have almost nothing in common. At Monkey Bizness, we believe you need to have a passion for working with your community and families. If you don’t have that passion, we believe that you will lack focus. When you start to lack focus, your energy and enthusiasm for the business will decline. From time to time that is OK, but over the long-term, your passion is what brings you back to your business. We are big believers that you must have a passion for whatever business you are in if you want to be successful over a long period of time.
- You Have Major Issues with the Franchise Agreement
As a franchisee, you will need to agree to a franchise agreement. Most of these agreements have a laundry list of things you need to agree to in order to operate your franchise. And what happens if you don’t like it and want to be your own independent business? That is covered in there as well (hint, its probably not good). Franchisors do this for a reason. The franchisee fee is often not profitable and it takes considerable resources for a franchisor to help launch a new franchisee. They also must protect the brand and their products so that other franchisees can be successful. You will need to live with the agreement you signed for the life of your business. A lot of franchisors like Monkey Bizness take practical approaches to solve issues with franchisees. Never the less, both the franchisor and franchisee have signed an agreement which ultimately will prevail if any serious issues should come up. If you aren’t comfortable with that agreement, don’t sign it.