REDUCING THE STRESS OF BUSINESS OWNERSHIP
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18 June 2019 – A new survey shows that running your own business can be stressful and frustrating. How does being part of a franchise help?
Long hours, overwork, lack of training, changing technology, money worries … Owning your own business isn’t all time off and fishing trips.
A new survey of small business owners has shown that nearly half are working between six and seven days a week, while three-quarters admit struggling with one or more areas of business management. Among that group, the biggest sources of concern were:
- Finance and accounting (39%)
- IT/technology (31%)
- Digital marketing (30%).
One in five (20%) also cited struggles with debt collection and managing overdue invoices.
The consequences of struggling with an aspect of business management varied from having to put in extra hours to learn new skills (43%) to lost opportunities to grow the business (38%) or lost customers and revenue (28%).
The research, commissioned by small business lending specialist, Prospa New Zealand, and carried out by YouGov Galaxy, was based on a survey of small business owners who work 30 or more hours a week in their business and have fewer than 20 employees.
While Prospa didn’t determine whether any of the 255 owners included were franchisees, many of the areas of concern identified are those where being part of a franchise should offer significant advantages.
According to the 2017 Franchising New Zealand survey, conducted by Massey Business School and Griffith University, new franchisees receive a median of 13.5 days initial training to equip them with the necessary skills and knowledge to run their business, with a median of 20 hours per annum of ongoing training to keep them up-to-date. This is in addition to regular field visits from franchisor staff, monthly meetings, annual conferences and regular contact via phone, email and other systems which all help teach new skills and monitor progress.
This also applies in IT, technology and digital marketing – three specific areas where the fast-changing nature of the environment requires small business owners to be constantly upskilling themselves, or to employ specialists who may have little understanding of how the owner’s business actually operates. 28% of respondents reported having had to spend money on expert help – something franchisees generally take for granted. As part of a franchise, they benefit from group input and the combined strength that enables them to adopt the right solutions for each area without having to conduct the research themselves. After all, that’s the franchisor’s role.
The cover story in the Winter 2019 issue of Franchise New Zealand magazine looks at many aspects of how the buying power of franchises can impact upon the margins, profitability and competitiveness of franchisees. Buying power gives you an advantage over independents and enables you to compete with the corporates while still owning your own business.
It also impacts upon the largest single source of concern in the Prospa research: finance and accounting. Banks love franchises, because franchises collect data so the bankers have hard figures to look at when making their funding decisions. They can offer advantageous terms, better transactional packages and even lend against the value of the business itself in some cases – something that’s very difficult for independent start-ups to achieve. As for accounting, franchises increasingly have standardised accounting set-ups available, while deals with online accounting providers not only make managing the business easier, but also allow the franchise support team to provide oversight and analysis to help franchisees avoid problems.
Although running your own business will always involve hard work and will never be entirely stress-free, all these factors should help to ensure that, providing they have chosen well, franchisees are better supported than independent business owners.
The importance of the support provided within a franchise also extends beyond the practical. Prospa’s research highlighted the emotional and personal impact that long hours and business worries can have on small business owners.
It found, ‘An overwhelming majority (88%) of small business owners who have struggled with aspects of business management reported experiencing negative emotions as a result – most commonly frustration (44%), stress (40%) and feeling overwhelmed or burnt out (38%).’
Meanwhile, 81% of respondents said they’ve had to make sacrifices in other areas of life in order to focus on their business. The areas most impacted were:
- Personal time (58%)
- Hobbies (57%)
- Exercise (48%)
- Family time (38%)
- Relationships with a significant other (33%)
- Sleep (30%)
This will come as no surprise to anyone who has worked with small business owners, but it’s another area where being part of a franchise can offer important advantages. As Estelle Logan comments in one of our online articles, ‘Being a business owner is stressful – it requires discipline, knowledge, training, assistance and advice. That stress doesn’t just fall on you – it can also affect your partner, children, family and home life.
'As a franchisee, you are not alone. You have a support team available at the touch of a phone, other franchisees to share experiences with, and someone to turn to for advice when things get tough. Best of all, you won’t be left on your own to struggle.’
There is an old cliché about franchising that says, ‘Franchising is being in business for yourself, but not by yourself.’ It might be a cliché but it’s true – and Prospa’s survey only goes to show how important it is.
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