Starting with the end in mind is the second habit put forth by Franklin Covey in his best seller The 7 Habits Of Highly Effective People. As a new, or existing, franchise owner your ultimate task is to determine your true motivation and then achieve it.
A lot of owners get into business with the product they sell in mind. They have an affinity for the product itself or more likely they have good memories wrapped around experiences they have had with the product as a consumer.
That alone is not a good reason to get into business.
What most people are working for is to secure their future, possibly their children’s and grandchildren’s future as well. They want to spend more time with their family, not in an office or travelling on business. The want to be present in their future, not an occasional spectator.
Business is not something you DO as much as it is something you BUILD. Life is something you do. Being a Father or Mother is something you do. Being part of your kids growing up is something you do. Being happy is something you do.
With that in mind, I have a plan for building in a way so you can do more doing the things that matter to you. Let’s figure out how you can build an empire and what you do with it.
Compound Growth Plan:
There are a number of ways to pursue this from a multi-unit growth of a single brand to building out locations representing multiple brands into a portfolio. You can diversify risk by partnering or syndicating deals. You can work at the franchisee, Area Developer or Master Franchisee level.
However, you do it the core concept is the same. Make an initial investment, put in the work to make the first location a success, replace yourself in that operation and take some of your profits and open the next. As you build your empire you will begin to have enough team and resources that your top managers can do the new opens while you step into a more strategic role.
After a few decades in franchising and almost as long as a business owner, I have my own thoughts on how to maximize this plan. I have also seen others build in ways that I wouldn’t, but they were successful too. A well thought out plan is the key to making any approach work.
I am a big fan of the franchisors that have built a family of brands in one style of business. These can be restaurants, fitness, services, etc. You get a lot of benefit in terms of systems, technology, support, training and real estate strategy. One of the key benefits is that with multiple brands to work with you can densely place locations you own by picking from among the brands.
I recently drove past a mall with two different boutique fitness brands, both from the same parent company. In service brands you could even share office space and staff among the multiple brands you own from the same family.
Staying focused on continuously replacing yourself and leveling up as you steadily add operational revenue to your portfolio is key. Some businesses have trends that wax and wane so you will sometimes sell a business out of your portfolio as you add more.
If your goals include building for your children’s or grandchildren’s future, we need to think about how this is going to come together. There are many approaches for wise tax strategy and I will leave the routine stuff for your accountant to brief you on. While I am not a tax advisor there is an approach you will want to get good advice on before you start your first, or next, business and I would be happy to refer you to our resources so that you can learn from the experts.
Their strategy is related to a popular 401K rollover plan that has been used by thousands over the years to fund their franchises. With a couple tweaks to that plan they have set it up so that when you sell your business the proceeds incur no capital gains taxes and drop directly into a tax shelter going forward. Additionally, it seems that this approach makes for a very effective multi-generational wealth transfer tool.
This plan needs to be put in place as you are starting your business. Once you are under way of when you are getting ready to sell, it is too late for this approach.
There is so much detail I could go into on this entire strategy with you, it is something I work with my candidates on over years as I help them build their empires. Hopefully we someday meet and get to talk about how this could be your success story!
George Knauf is a highly sought after, trusted advisor to many of the top franchise ownership groups in the world. With over 25 years of experience in both start-up and mature business franchise operations he is uniquely qualified to advise individuals that have dreamed of Building their own empires. Whether you have an existing portfolio or searching for your first franchise, he can help you to pursue your dreams. Contact the Franchising USA Expert, George’s Hotline: 703-424-2980.