Nearly anyone who has ever felt stifled by the corporate world has dreamt of leaving their jobs behind to “become their own boss.” Undeniably, entrepreneurship offers several compelling advantages, such as the freedom to control how and when you work, a virtually unlimited potential for success, and the pride of building your own business. However, the leap into entrepreneurship should not be taken hastily—becoming a successful business owner requires diligent planning, research, and self-assessment.
Are you thinking about starting or buying a business and becoming your own boss? Here are five crucial factors to consider:
- Your personal attributes. Aspiring entrepreneurs must make several important decisions, such as which business model is right for them, how the business will be funded, and which roles they will fulfill in the business. As you consider these options, take the time to critically and honestly examine your personality, dreams and aspirations, strengths and weaknesses, tolerance for risk, and other characteristics. For example, if you do not like managing people and do not want hands-on involvement in the day-to-day operations of the business, then a semi-absentee ownership arrangement may be right for you. If you tend to be risk-averse, buying a franchise with an established brand and proven record of success is probably a better option than starting a brand-new business.
- Your goals for the business. Being your own boss requires you to stay on top of both the short-term and long-term goals for your business. Therefore, before you invest any money in your new venture, it is prudent to invest some time in articulating clear goals that you want to achieve as a business owner. In addition, think of strategies and actionable steps that you may be able to take in order to achieve those goals. Formulating a business plan that includes these goals, strategies, and actionable steps will help you become more focused and confident—improving the likelihood that your business will succeed from the start.
- The demand for the product or service you will be offering. For any type of business in any industry, success depends on the strength of customer demand. Therefore, an essential step in becoming a business owner is to analyze factors like trends in your industry, the competition, and the past successes and failures of other businesses in the industry. If you are planning to buy a franchise, you will be able to glean some of this information by carefully examining the Franchise Disclosure Document (FDD) and seeking the honest opinions of current franchisees in the companies you are considering.
- Your financial situation. For most business owners, profitability is a constant concern. One of the first steps on the path to profitability is getting your finances in order prior to starting or buying a business. Have a thorough understanding of your assets and monthly expenses, ensuring that you have enough money saved to sustain you as you establish your business. Keep in mind that being your own boss may entail unforeseen expenses and months without income as your business builds a customer base. However, once you pass the breakeven point, you will be able to enjoy one of the main benefits of entrepreneurship: keeping far more of the profit margins than you ever would as an employee.
If you are buying a business, it is also crucial to have a comprehensive understanding of the business’s financial situation. Strongly consider working with an expert, such as a franchise consultant or a business broker, to attain accurate information about cash flow, expenses, and overall profitability for any business you are thinking of buying. If you are purchasing a franchise, be sure to ask current franchisees in the company about start-up costs they incurred, how long it took them to become profitable, and whether they have encountered any unexpected fees and expenses. You may also be able to glean valuable financial information about the franchise concept by reviewing Item 19 in the FDD, which provides financial performance representations. While companies are not required to complete this item, doing so may help to boost their credibility.
- Your support network. On your journey to becoming a successful business owner, surrounding yourself with the right people will help you navigate challenges and provide you with the encouragement needed to pursue your goals. Strive to create a network that includes mentors to guide you, vendors with whom you may want to work, potential investors, other business owners in your industry, and positive people who support your dreams and will keep you motivated when you encounter obstacles. You may be able to find these contacts by joining your local chamber of commerce and other networking groups.
Being your own boss can offer you significant freedom, financial success, and numerous other benefits. However, owning a business always presents a certain degree of risk, so taking the leap into entrepreneurship requires careful consideration of various factors. Franchising offers an ideal balance of flexibility and support while reducing entrepreneurial risk, since franchisees benefit from an established brand, proven business model, and training and assistance from the parent company. With thousands of franchises available across a variety of industries, an opportunity exists for nearly any set of goals, needs, or interests.
Wondering whether franchise ownership is the right path to becoming your own boss? Call Franchise Logic today at 303.805.5078 or contact us to schedule a free, 15-minute consultation and learn more about the opportunities available to you!