In surveying small business owners and franchisees regarding their decision that led to the creation of a business
from scratch or the purchase of a franchise, some common elements keep showing up.
We wanted to see if entrepreneurs that had gone the ‘start from scratch’ route were able to say with confidence, “Yes – I would do it that way again”. Similarly we asked franchisees of various business models if they would do it again – under a franchise format. On the positive list for the start from scratch group were a number of comments that perhaps in hindsight showed a lack of direction or dedication. Many indicated that they liked the way their business had evolved. Many stated that it was quite a long way from the original plan. This was, perhaps surprisingly, sighted as a positive factor. Entrepreneurs indicated that they liked the flexibility that their own model gave them. They could change this process or that procedure ‘on the fly’ to experiment and see what options worked best. Sometimes they admitted that they found options that evolved through ‘trial and error’ and were definitely not a feature of their original business plan.
Being their own boss gave them the flexibility to redesign the process almost on a daily basis. Some did admit that
while it was good to be able to make such changes and see them implemented quickly, it was in many cases a process
that slowed their overall growth. Many admitted that it took almost twice as long as they had originally planned to
get it right and evolve a definitive plan.
Naturally with that elongated start-up period came the attendant pressure on cash flow and lack of profits and real growth. There were mixed responses when asked how they felt their company name was accepted in local business circles. Many agreed, perhaps reluctantly, that a more established ‘brand name’ might have given them greater opportunity in a shorter time frame.
Not surprisingly, the franchisees also seemed to have common elements that they spoke about concerning their
business, notwithstanding that they came from a varied range of services.
Three specific ‘likes’ surfaced many times.
They were training, manuals, and help on call. All spoke of the great asset that training
provided. Virtually all franchisees had no prior business background and experience in the franchise which they subsequently purchased. Training, therefore, was a must and for most created a solid foundation on which they built their business.
Having a written plan, a ‘how to’ model in the form of an Operations Manual, was another area where franchisees were all in one accord. The manuals provided the day-to-day direction and, in many cases, franchisors had required manuals to be studied prior to training. This allowed franchisees coming from unrelated disciplines to study their new business in depth and at their own speed prior to the franchisor adding their training program. The third ‘like’ was the fact that there was always help when needed. Franchisees, admitted that even with extensive training and updates, etc. they still faced situations where it proved beneficial to be able to talk to an expert for help and direction. Having that help readily available was, for some, the number one feature that they now look back on and feel they made a wise decision in the course they took.
Based on the feedback from the entrepreneurs group who stressed their ‘likes’ in the area of flexibility and freedom, it seemed appropriate to ask franchisees about their feedback on these two areas. Did franchisees feel that they had ‘bought’ into a system that was rigid and left no room for creativity or change? The answer was not only a resounding ‘NO’ but they all commented on the fact that it was one of the reasons they went the franchise direction. They specifically wanted a system that had already been tried and tested. They did not see themselves as individuals working a system that still needed to have the kinks removed.
On the topic of freedom in their day-today business operations, none of them indicated that there was any noticeable
pressure within their particular franchise culture that led them to see themselves as anything but independent business owners, free to come and go as they pleased. In the final analysis there is probably no definitive statement that says one model is superior to the next. There will always be those who like to be creative and perhaps even re-invent the wheel, and then there will be others who definitely want a ‘noassembly- required’ model. If you are at the start of the search, take time to review the pros and cons of the various options, review the pros and cons of what you bring to the table as an individual, and then get the pieces to line up.
David Banfield is President of The Interface Financial Group, a position that he has held for over 20 years.
He has been instrumental in starting Interface as a franchise opportunity and building it to its current international
status. Prior to his involvement with Interface, he worked extensively in the banking, credit and factoring financial service areas.
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