As I get the opportunity to visit with owners of franchise and independent businesses across the country I see a range of success and different levels of satisfaction with their chosen endeavor. All of those owners started with the same desire to succeed, provide for their family and have an income they control.
Why the different outcomes then?
Often it comes down to their understanding of themselves and the opportunities in front of them as well as how they build a model for their portfolio growth.
Keep in mind that the franchise development people that you will talk to are looking to sell a unit, territory or multiples of those to skilled people that can make them successful. You won’t likely find them talking about your portfolio and how you might see growing it, that is not their job. Their focus is on unit success, not portfolio success.
The first flaw in most plans is that the candidate is working to replace their corporate role with a business that feels like a job and has one location or limited trade area. For example, when they are looking into restaurant franchises they may be looking at a single location. That makes your daily role more of a restaurant manager, not a CEO, and few of those candidates would submit a resume to be a manager of a local fast food restaurant.
Businesses don’t have to feel like your past jobs.
As a franchise owner you have a few superpowers by virtue of your new ecosystem.
- You can leverage money to grow a larger operation faster
- You can leverage talent but hiring people that have skills you don’t
- You can leverage time by building a team that does the work that makes you money
- You can leverage relationships (like that with a franchisor) to give you advantages
- You can leverage buying power and supply chains to lower costs below your competition
- You can leverage a brand so that customers know what you do and how well you do it
- You can leverage National employee programs to get the best employees
With all these superpowers why would you leave your corporate job to become a single unit restaurant manager? That is not to say restaurants are bad opportunities, just that starting with a vision of one unit may not fit you. I tell most candidates that wish to venture down the path of restaurant ownership that their goal should be a minimum of 5 units.
When searching for opportunities it is critical that candidates dismiss ego and preconceptions so they can open up their field of view to consider opportunities in full and with their long term portfolio growth goals in mind. If your goal will require 7 units of a particular restaurant, then what is the cost in money and time to hit that goal. Is there, then, an opportunity with another franchise company in a different industry that would give you a better use of money and time?
Also keep in mind that as you grow the systems must allow you to move from running the first unit to overseeing multiple units and eventually stepping into a CEO type role. For some owners that transition could take years, for others it happens in months. While you may find working in your business exciting at first, personally managing the daily operations limits your businesses growth as you only have so many hours in a day. You will have to leverage time and resources to grow your business and, eventually, your portfolio.
If I was to give the most basic of portfolio building success parameters, it would be these:
- Focus less on how you like the business yourself as a consumer and focus on demand and stability.Un-sexy is better than high-sizzle.Nobody checks the stock market before calling a plumber or fixing their car and a lot of people have cars, plumbing, etc., etc.
- Territory based is often better than brick and mortar.Brick and mortar has huge expenses before you open, you can’t move it and it takes a long time to open and make money.Territory based businesses have protected customers, not just lines on a map.
- Area Developer, Area Representative and Master franchise opportunities can be very desirable, especially if in a non-retail service business.
- Businesses that can quickly become semi-absentee are preferred over full time roles, gives you the freedom to grow portfolio.
- The business has to fit your model (contact me, I’ll explain how to build your model)
- The franchisor can be emerging or seasoned, but they have to offer great training, support and franchisee satisfaction.Emerging brands have to be run by seasoned franchise pros.
- You have to follow the system, don’t offer suggested changes for the first year, do what they have proven then tell down the road them what you would do.You bought it, use it!
- Market, A LOT!
- Sell, always!We all sell every day, to our spouse, family, community, boss and much more.We just don’t call it selling.The vision of the old school used car salesman is from the past.Sales is now a component of customer service.
- Be involved in your community
- Evangelize your business.
- Have the goal of making every customer happy.The client is not always right, but the client is always the client.
- Enjoy what you do with wild abandon!Nobody can downsize you!
- Spend more time with family, friends and doing the non-work things you love.What better reason to be successful?
Assembling a portfolio is complex, get assistance from someone that knows how to do it well. We work with executives and investment funds and the complexity of their needs can be daunting, but for years we have successfully built home run portfolios and you can too.
What is your success story, let’s go find it!
George Knauf is a highly sought after, trusted advisor to many companies; Public, Independent and Franchised, of all sizes and in many markets. His 20 plus years of experience in both start-up and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution. Contact the Franchising USA Expert George’s Hotline 703-424-2980.