Joel LibavaIn Part 3 of this franchise series, I said that “control” was a really popular reason for people to want to consider buying a franchise. I stated that “you certainly don’t have much control when you’re working for someone else.” How true. Investing in a franchise business opportunity changes that.
If you missed Part 3, please read it now, and stop back.
Now, I’d like to discuss yet another popular reason for buying a franchise. This time, we’re going to talk about money. Lots of money…
Are would-be franchise owners hoping to make lots of money?
Yes and no.
According to my calculations, (I’m not a math King) most of the folks that I’ve advised for the past 10 years have told me that they’d, “like to replace their income.” (At least.)
I’ve found that a very small percentage expect to make huge amounts of money.
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Interestingly enough, most of the folks that I’ve worked with don’t even want to make lots of money! Are you surprised?
Now, I’m not saying that these folks don’t tell me things like, “Joel, of course I’d be fine making a lot of money.” or, “I’m certainly not going to turn down $200,000 a year in profits from my franchise business.” What I am saying, is that making huge amounts of money as a franchisee isn’t top of mind for almost everyone I’ve ever worked with.
Because I’ve been helping prospective franchise owners for so long now, the reasons for this are pretty easy for me to figure out; they’re moving away from the mostly dead “climb the corporate ladder with us, and you’ll be handsomely rewarded” promise of long ago. That’s because the following sentence has been added to that promise; “But, we don’t really care how good you are anymore, because when our bottom line gets cut, you do too-we downsize everybody we have too.”
In other words, as most of us know only too well, there’s really no such thing as loyalty anymore, from your boss, your bosses boss, and so forth.
Have you ever been downsized? Check out this downsized worker.
Are you telling me to forget making money?
Not at all. What I am saying is that in my experience, making lots of money in a franchise business hasn’t been a huge priority for a large percentage of the folks that I’ve worked with.
I never said that these folks don’t want to make money. It’s just that other things seem to be more important. Things like what I mentioned in Part 1 of this series. In Part 2. And yes, in Part 3.
????????
Let me pose this question to you; does geography matter when it comes to the importance of making money?
For example, do folks from let’s say, San Diego, or Palm Springs, California, put more emphasis on wanting to make a ton of money as a franchise/small business owner, than say someone from the Midwest, with those supposed “Midwest Values”
I mean, one does have to make more money to live comfortably in California than they do in Dubuque, Iowa, right?
I don’t mean to upset any of my West Coast friends. I’m just sayin.
So, Franchise King®, How much can I make?
Is a Green Franchise For You?
Here’s an answer you’ll love; it depends.
- Are you going to be a one-person type of franchise owner? Like a business coach? (Oh no!) If you’re really good at sales, and you happen to join a 1st class franchise company that offers “coaching” franchises, you could easily make your $75k-$100k investment back in your 1st year.
- If you become the franchisee of a multi-unit retail or food franchise, figure a couple of years (at least) to start seeing some profit. The investment is high. You’ll have more overhead, and a bigger loan balance. You could make some big money, eventually. And it’s nice to drive around looking at your * multiple stores!
- If you are the rare bird that would like to really build an empire of sorts, (a Master Franchisee) after a few years you could make some serious money. I do mean serious money. Master franchise holders sell franchises and service them, too. In addition, they provide the accounts for the franchisees under them to service. One more thing; they also do some financing for the franchises that they sell. So, there’s multiple streams of income.
- You could buy * a service franchise. Service franchises are pretty awesome; you usually don’t have a lot of inventory, your employee and vehicle costs are based on how much business you’re bringing in, and your location is usually pretty cheap to lease. You could do really well.
Then again…
You could fail, miserably. I might as well put it out there. Not everyone that I’ve helped get into a franchise has made it. There are lots of reasons that great people fail in their businesses. It hurts me, personally when they do.
Sometimes, doing everything right, (like proper franchise research) just doesn’t cut it. Market conditions change. Economies go down. People get sick. Neighborhoods change. Technology happens.
It’s risky to buy a start-up franchise. You won’t hear that from most of the other franchise industry folks out there. I don’t understand why. Ok. I do. They’re afraid that if they say even one little thing that’s perceived as something negative about franchising, from a prospective franchise buyer, than they’re not helping the franchise industry, and in some cases, they’re not helping their own pockets.
I’m not going to get into a discussion about that, right now. (But, I will, eventually.)
It’s risky to keep a job, too. How many of you thought that you’d had it made, and that you’d be working for the same company for 25 years? How many of you still are?
In summation, if you’re thinking about buying a franchise so you can make some money, you can! It’s just that there are so many different types of franchises, for so many different types of people.
If you can somehow learn how to select the right franchise, and you’re able to do all the necessary fact-gathering that’s required, you’ll be able to not only find out how much you should be able to make, but you’ll have a pretty decent chance at hitting your income goals.
If you Customize your search for a franchise,
You can usually avoid losing money with proper franchise research.
And then you’ll be ready to open for business.
Here’s Part 5 of “Popular Reasons For Buying a Franchise.”
Do you know someone who needs to read this? Pass it on.
Would you like some help figuring this all out? Contact me by clicking here.
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