These factors need to come together at the same time for business ownership to make sense
Timing is a simple word, but it’s paramount to the success of a business. When it comes to buying a franchise, there are several “timing” factors that need to fall into place to make it work. Here, we look at those factors, but first, let’s explore the meaning of timing.
When I Googled the word timing, I found some definitions as well as examples in the Oxford Languages Dictionary:
- The choice, judgment, or control of when something should be done.
“One of the secrets of golf is good timing.”
- A particular point or period of time when something happens. Plural noun: timings
“The introduction of new signal timings.”
- The times when the valves open and close (in an internal combustion engine), and the time of the ignition spark, in relation to the movement of the piston in the cylinder.
Looking at these definitions, one can see that timing can be critical to success and/or proper function. If one’s judgment is off, poor choices are made and there are resulting consequences. In order for an engine to function properly and efficiently, a lot of different mechanical operations need to happen in the proper sequence at the proper time. But how important is timing when buying a franchise?
Having been in the business world for several decades, I have seen and learned how critical timing is in business. Just thinking about the computer, one can see how critical timing has been. In the mid-’60s to early ’70s, computers were very large housed in large rooms with raised floors to put all the heavy cables under, and the air-conditioned rooms they were in were kept very cool as the computers ran so hot.
Only large companies could afford these computers as the price tags were usually 7 figures. Soon desk-sized computers that didn’t need special environments came into use and the prices dropped to where small businesses could afford to make the investment. Then the desktop computers came into being and software to run them was invented. The timing of the practical use of desktop computers and software like Microsoft came together to create a whole new industry. The timing of these along with Apple moved us into a new world where virtually everyone can afford to own a computer or at least have access to one.
Timing and the success of a business
I could give numerous other examples of how timing is critical, but suffice it to say it is. And this brings me to the point of this article. Having been in the franchise industry for 14 years and part of that time being a business broker, I have seen how there are several timing factors that come into play when buying a franchise. What I am going to discuss are those factors that the potential business owner has control over. There are many timing factors that a person has no control over that impact timing and the success of a business, but that usually cannot be planned ahead of time. We all saw what the pandemic and ensuing shutdowns did to businesses worldwide as an example of non-controllable timing.
Timing when buying a franchise
- Ready or not, here I come: This one is not quite that casual, but it is the first factor. A person decides when he or she is ready to get serious about becoming a business owner. When a franchise consultant meets someone who is seriously considering business ownership, learning “why now?” is always something we want to know. It is not unusual when asked “why now?” to get an answer something along the lines of, “I’ve been thinking about business ownership for years” or, “I’ve always wanted to own my own business.” That doesn’t say anything about “why now?” It may be that the person has lost their job, or have gotten tired of making money for someone else, or have a new boss, etc. The point is that there is usually something that has happened now or the very recent past to create the timing of, “Now is the time.” Without that, there is not enough motivation to sustain what can be an arduous journey into business ownership.
- There’s a monster hiding under the bed: Virtually everyone who starts to look at business ownership is going to have to face the fear that goes along with the risk of business ownership. Simply put, there are no guarantees it’s going to work. If it doesn’t, you could be out tens of thousands—if not hundreds of thousands—of dollars. Risk tolerance is certainly a factor one has to consider when dealing with fear. Some people do not have the needed risk tolerance and that’s OK. Not everyone is meant to be or should be a business owner. However, to keep that monster under the bed in check, or at least to get a handle on it, gathering good solid information is essential. Talking to the franchisor, reviewing the Franchise Disclosure Document, doing a thorough job of gathering information from franchisees, putting together a proforma, getting a legal review of the franchise documents by a franchise attorney, having your accountant look at the numbers, etc. All these things help make the fear manageable. So the timing of being in a place of having the necessary risk tolerance is another piece in this timing puzzle.
- Do I need money to become a business owner?: The answer seems obvious, but it surprises me at the number of people who believe they can get 100% bank financing to buy the business and that the bank will also provide the needed operating capital or there are grants to finance the start-up/purchase. The timing here is having the necessary funds available to put a down payment on the business. Also having the net worth and credit score, financial history, etc. to qualify for the necessary funding is essential. So financially, the timing needs to be right.
- I’m a grown-up so I don’t need anybody’s permission: This is absolutely the wrong attitude if you are married or in a serious long-term relationship. Business ownership is probably one of the top four or five decisions you will make in your lifetime. It has a significant impact on those around you, especially your spouse if you’re married. The financial impact of the investment and then the impact of going without an income while the business is moving past break-even are all considerations. The timing must be right for those whose lives will be impacted by this decision.
As you can see, there are a number of factors that need to come together for business ownership to make any sense. For each individual, there are probably other timing issues that need to be considered. The point is that business ownership can be — and often is — a great option for many people. It must be entered into with your eyes wide opened with multiple factors in play to make it viable.
Good luck and good timing!