Recently, I had the opportunity to sit down with a former Army Ranger who had served time in Afghanistan and certainly had put in his time serving our country. He had been planning his new business to provide professional body-guard/security services for the past year and a half. It was hard not to feel for him, he had clearly done so much for our country and now was sort of wallowing in his own thoughts on what to do next. In working with franchise investors and potential business owners who are researching and trying to understand whether to get into business, this scenario seems to play out quite often. The fear, anxiety and thought of getting into business tends to plant people’s feet in concrete and they can’t bring themselves to take the leap. This is a problem not only for people individually as it is my belief that small business ownership is the best, most effective way for people to take control of their future and truly realize their potential as a working professional. The second issue for the overall picture is that less and less people are starting businesses as the rate of entrepreneurship across the country has been declining for some time which does not bode well for our overall economic health.
So where are we going wrong and what can we do about it? Well, if we start with the former Ranger example, a lot of the issue starts with education and support for people considering starting a business. The SBA offers some great programs through SCORE and there is a lot of great information on the web available to anyone willing to spend the time to read them. The key to getting people confident enough to start a business is helping people develop a solid plan. Knowing the risks, planning for how to overcome them and understanding the roadmap to get to profitability helps people make the decision to become a business owner. Second, one of the bigger issues has been funding, although lending has become easier since the crash, it still can be difficult to get a loan to start a business. By having a great plan and understanding what money is available up front, a potential entrepreneur can save themselves heart-ache and wasted energy looking into businesses they can’t afford. From my perspective with Franchise Marketing Systems, franchising can always be a viable option for a new entrepreneur who hasn’t started a business. The roadmap, business plan and entire system should be provided to the franchisee immediately upon signing the franchise agreement. The good franchises help take a lot of the legwork and uncertainty out of the new business launch.
The reality is that starting a business should make someone nervous. The statistics for success vs. failure are not very enduring showing success rates for new businesses as low as 4% after the first five years in business. From my work in franchising and working in small business, most of these failures come down to lack of funding, poor planning or poor execution. All of these could be addressed if the potential business owner spent the time and even money planning for how they would execute their small business venture. Whether it is a franchise or a pure small business, check the funding requirements, understand the consumer market, make sure there is a plan for how the business will get to profitability and that there is enough cash in the bank to get to that breakeven. The great thing about business is that when you break it all down, it’s pretty simple, you need to bring in more dollars than you spend to make a business work. Almost 70% of small businesses in the U.S. are operated from home, so the initial investment to start a new business is a lot more attainable for most and the lifestyle aspect of business ownership is extremely compelling. I for one can attest to the excitement and value of starting a new business, I started Franchise Marketing Systems in 2009 and looking back, it was one of the best decisions personally I’ve ever made. There is a business for everyone, you just need to find the right fit and then build a great plan you can execute.