Franchising & You

by Simon Lord

last updated 23/01/2014

Simon Lord is Editor of Franchise New Zealand and has worked in franchising in New Zealand and the UK for over 30 years. Thanks to Dawn Engelbrecht for her contribution and to Ross Blake, Michael Bright, Paul Donovan, Brian Mooney and Martin Smith for the spirited discussion which led to this article.

is your job TOO SMALL for you?

by Simon Lord

last updated 23/01/2014

Simon Lord is Editor of Franchise New Zealand and has worked in franchising in New Zealand and the UK for over 30 years. Thanks to Dawn Engelbrecht for her contribution and to Ross Blake, Michael Bright, Paul Donovan, Brian Mooney and Martin Smith for the spirited discussion which led to this article.
January 2014 - If you're considering a new start in the new year, buying a franchise can change your life. Be prepared, though - according to some of New Zealand's most experienced franchisors and advisors, you'll first need to change your mind-set. We also look at an innovative mentoring programme offered by one franchisor.

Is your job too small for you?A franchisee we talked to once was pretty blunt about the reasons for leaving their job and buying their own business. ‘There was zero appreciation, zero job satisfaction and I’d endured a spate of sh*tty bosses, so I bought a franchise and changed my life. Send me some copies of the magazine when it comes out so I can give them to the people in question!’

Everyone has periods of frustration in their jobs – it’s only natural when half of your waking hours are spent working for others, five days a week. After all, everyone likes to feel that they have some control over their actions and that they are making a difference. It’s a feeling that the New Zealand Police cleverly tapped into with their ‘Get some better work stories’ campaign, and it’s one that also results in many people dreaming of giving the boss the push and becoming self-employed.

For many New Zealanders, owning your own business is not just a dream – it’s a very real option. According to international surveys, New Zealand is one of the best places in the world to start a business. That doesn’t mean every new business succeeds, of course, which is one of the reasons why franchising is so popular. Franchisees get the training, systems, help and support they need to give them the best possible chance of success.

But being fed up with being a wage slave doesn’t mean you should hand in your notice and leap into buying the first franchise that catches your eye: you have to choose carefully and do a lot of research before deciding to plough your savings, your career and your life into a new venture. However, if you get it right then buying a franchise can change your life in many ways. Here are some of them.

Ten Ways To Change Your Life

1. You make your own decisions. Rather than someone telling you what to do in any situation, you are able to use your own judgement. That’s liberating, but it can be scary, too. Get it right and you could make a customer for life. Get it wrong, and the cost comes out of your own pocket.

2. Your income isn’t limited by your salary or the number of hours you work – it’s only limited by how well you run your business, attract your customers and satisfy their needs. Even if you start off in a one-person business, most franchises offer you the ability to grow much larger – either by employing others, opening additional outlets or taking on a master franchise.

3. Your future isn’t limited by your past. Want to run a café, open a pet hotel or run a sign business, but don’t have the experience? In most cases, that doesn’t matter when you buy a franchise because the franchisor will teach you how to run the business – and run it well. If you have the ability, all you need is the desire to succeed, the willingness to listen and learn, and the determination to overcome problems.

4. There’s no career ladder. When you work for someone else, you can’t expect to make big jumps up the ladder – you have to prove yourself on every rung before you’re given more responsibility and more rewards. With your own business, you choose when to expand – and the franchisor team will be there to help you decide when and how.

5. There’s no pyramid of responsibility, either – you don’t have to wait for a position to become vacant at the next level up, or compete with your colleagues to get the top job. Nor do you have to wait for decisions from above before you can get on with things. Your business becomes what you make it.

6. No more office politics. Working with other people, each with their own agendas, can lead to friction – especially if they have their own ambitions. Working for yourself avoids all that. If you are ambitious, it’s up to you to build your own business, your own team and your own profits.

7. More personal satisfaction. When you own your own business, every day will have its challenges, its triumphs and disasters. If a customer thanks you for great service, or a piece of vital equipment breaks down and you have to manage without it to get the job done, it’s you that’s made the difference – and you’ll care desperately about getting a good result.

8. More personal freedom. You won’t know what hard work is till you’ve run your own business, and you’ll work more hours than you dreamed possible, especially at first. But when you’re self-employed, you’ll also find you have a very flexible boss and that if you really want to be at that school prize-giving or rugby match, you can make it happen.

9. You’ll still be part of a team. When you work for someone else, you’ll probably have colleagues to share stories, experiences and frustrations with. When you work for yourself, all that can disappear and you can find yourself alone. But if you buy a franchise, there will be other franchisees around to talk to, meet and learn from, as well as a franchisor team to help you overcome problems.

10. You’ll be building an asset. If you do a good job when you’re working for someone else, you might get praise, maybe a small bonus or even promotion one day. But if you do a good job in your own business, you’ll not only increase your income immediately – you’ll also increase the value of the business itself. If you’ve chosen well, the franchise brand should be worth more, too. When the time comes to sell, move on or retire, your asset will be worth more and you’ll have made a tax-free capital gain.

Don’t Expect It To Be Easy

While all the above is totally true, moving from employment to self-employment isn’t exactly a walk in the park – there are too many things to think about. And there are risks, too: as one lawyer put it to me recently, ‘I hate seeing adverts saying “Be your own boss.” Owning a business means responsibility as well as freedom, so if “sacking the boss” is your main motivation, don’t do it. When you’re employed, if you’re made redundant, you lose your job. If your business fails, you can lose your job, be made bankrupt and lose your house! You have to balance the risks and rewards, and if you choose the right business and take the right advice, buying a franchise can help you do that.’

Here are some of the areas that new business owners have to think about which they might never have considered as employees:

Taking legal advice. You might have consulted a lawyer when buying or selling a house, but that’s a pretty straightforward affair compared to setting up a company and buying a business. It’s also one of the few areas where buying a franchise is more complicated than buying an independent business; you’ll have an ongoing relationship with the franchisor so you’ll need an experienced franchise lawyer to check over the franchise agreement before you sign it. Fortunately, they’re not hard to find (see the Westpac Directory of Franchising).

Talking to an accountant. If you’ve been a manager in a large company, you might have dealt with the ‘bean counters’ but otherwise you may never have consulted an accountant. When you buy a business, though, you want one on your side to help you analyse whether it’s a fair deal or not, help you set up the systems to manage it and advise you on everything from cashflow to tax. Accountants can help you achieve your dreams and avoid your nightmares (see the Westpac Directory of Franchising).

Borrowing money. If you thought getting a mortgage was nerve-wracking, wait till you want to buy a business. Banks will want to know all the details, see business plans and projections, be sure you have the necessary skills and then want some form of security on the money they lend you – often your house. But this is where choosing a franchise can be a huge advantage: the franchisors will have helped all their franchisees through this process before; the main banks all have specialist franchise teams who understand how to assist newcomers and the franchise itself may have preferential arrangements with a particular bank that makes it easier – and cheaper – to obtain the necessary finance.

Dealing with the IRD. When you’re employed, you don’t have to think about tax much – it’s just a depressing figure on your pay-slip. But as a business owner (and especially if you employ staff yourself) you’ll have to be on top of company tax, income tax, GST, PAYE, Fringe Benefit Tax, excise duties and a host of other issues. As well as working for yourself, you’ll think you’re working for the Government. But again, others have been through all this before and, if you set things up properly with the advice of your franchisor and accountant, you’ll not only be able to stay on top of the books – you’ll also gather valuable information which can be compared with other franchisees (‘benchmarked’) to see how your business is progressing and where you can make improvements.

Complying with the law. As a business owner, your business practices and product standards must comply with relevant legislation. Here’s a brief list supplied by Ross Blake of Marketing Spark – and it’s by no means exhaustive:

  • Fair Trading Act
  • Consumer Guarantees Act
  • Packaging & Labelling Regulations
  • Consumer Information Standards
  • Product Safety Standards
  • Resource Management Standards

If you employ staff, Ross points out that you’ll also have to consider:

  • Employment Relations Act
  • Minimum wage rates
  • Minimum holiday allowance
  • Health & Safety in Employment Act
  • Hazardous Substances & New Organisms Act

Then there are hygiene standards, local authority by-laws and a whole host of other regulations to consider. A good franchise will already have systems set up that will ensure you comply with all these requirements – as long as you follow them. And if the law changes, your franchisor should let you know. That’s a huge weight off your mind, isn’t it?

Doing it all yourself. When you’re self-employed, if you don’t do something then nobody else will. That applies to everything from making sales to replacing the toilet rolls. If you’ve been used to a job where someone else was responsible for dealing with suppliers, placing the advertising, hiring staff, maintaining equipment or washing the tea towels, that can come as a shock. Fortunately, as a franchisee you’ll be shown what to do, how and when to enable your business to run smoothly.

Dealing with customers. This might sound like a silly one, but how often do you really deal with customers (the people who pay your wages) in your current job? One friend told me recently that in his corporate job managing over a thousand people he never even talked to a customer, but when he became a franchisee in a car detailing business, customer contact was a constant part of the job – and the only way of growing his business. No wonder most franchisors specify people skills as the most important attribute of all.

Change Your Mindset

So, as we’ve seen, if you feel your job has become too small for you and you want to change your life and take control, franchising has a lot to offer. You can make the move into owning your own business with the support and guidance of the franchisor behind you, and you’ll be provided with systems to help you handle most of the practical obstacles along the way. You won’t have to create products or services to sell, won’t have to work out where to source them or how to price them, and you won’t have to start advertising from scratch – you’ll have the benefit of an established brand name that will bring customers to your door.

But the success of your business will still depend very much on your own efforts. I recently asked a small panel of franchisors and advisors what they thought was the biggest single obstacle which faced people moving from employment to self-employment for the first time. They all agreed that the greatest challenge of all was the need to change your mindset from ‘doing a job’ to ‘managing your own business.’

‘There’s more to it than just getting used to the idea that you won’t be getting a regular pay cheque every week,’ said one. ‘You have to accept that if you want your business to grow, it’s up to you to grow it, and if you have a problem, it’s up to you to fix it. With a franchise, at least you have someone to turn to for advice on all these things, but you have to make that mental shift to get the best out of the opportunity.’

Removing The Roadblocks To Success

One person who is well aware of the need to help franchisees change their mindset is Dawn Engelbrecht of the sKids (Safe Kids In Daily Supervision) franchise. ‘It doesn’t make much difference whether they have been senior management or junior staff – the same issues still apply,’ says Dawn. ‘Some people feel they suddenly have to do everything themselves, or focus on the areas in which they feel they have expertise rather than learning all the new roles they need to manage their own business. Self-confidence can be an issue, too. I would say that attitude of mind can be the biggest roadblock to success.’

It was to help remove the roadblocks that Dawn introduced sKids’ franchisee mentoring programme. ‘Like most franchises, sKids provides thorough initial training, which teaches franchisees how to carry out the day-to-day operation and management of their businesses, plus  ongoing support to help them put it all into practice as they get established. Our mentoring programme takes it to the next level to give them the skills to operate as business owners, not just managers.’

The sKids mentoring programme is a six-month course conducted by Dawn herself and run as a series of group sessions with other franchisees. Most participants have completed at least their first year in the franchise, ‘so they’ve experienced the ins-and-outs and the ups-and-downs of running the business,’ Dawn explains. ‘That way, they know what they do and don’t enjoy and what their own personal roadblocks are.

‘Meeting as a group adds huge strength to the process. Everyone has different life experiences and different skill sets but they are all using the same franchise system so they can discuss all aspects of the business and identify weak spots. It’s not about the franchisor telling them what to do, it’s collaborative. People can put their issues out there and discuss how to fix them. A lot of the learning comes from the war stories, people who’ve been through the same thing, although we also have formal sessions and homework at the end of each session. It’s a big commitment, which is why franchisees have to request a place.

‘We’ve run it three times so far and seen it make a big difference to people’s results. One franchisee, for example, struggled to delegate – she felt that, as a business owner, she had to manage everything herself. Until she got beyond that, her business wasn’t going to grow. After doing the programme, she had a different mindset and went on to win her category in the Westpac New Zealand Franchise Awards. Two of our mentor programme graduates have done that now.

‘Everybody needs something different to get over their own personal roadblocks, so everyone gets something different out of it. It’s about helping people create the best business that they can.’

Succeed On Your Own Terms

People are motivated to buy a franchise for all sorts of reasons. Hating the boss, like the franchisee at the start of this article, is one of them, but it’s certainly not a good enough reason to take on all the challenges that business ownership will present.

On the other hand, you may well feel that your job has become too small for you – or that you have grown too big for your job. If you have the desire to succeed on your own terms, the spirit of adventure to start something new, the ambition to create something of your own and the courage to invest your time and money into your own business, buying a franchise could well offer you a real alternative to being a wage slave.

Franchising offers a brand, a product and a proven system that saves you having to create everything yourself. It offers training and support to help ensure you put your energy into activities that bring results. And it offers a network around you to help you make the mental shift into owning a business rather than doing a job.

Franchising also offers an incredible range of opportunities to suit different interests and investment levels. In the following pages, you’ll find profiles of many different opportunities in all sorts of industries, as well as real-life stories of people who have swapped employment for ownership. They’ve all been through the excitement and occasional fear of making the change, and they’ve all demonstrated how, with a good franchise behind them, they have come to grips with owning their own business. Could it be your turn next?

This article was first published in Franchise New Zealand magazine Volume 22 Issue 03, September 2013. Thanks to Dawn Engelbrecht for her contribution and to Ross Blake, Michael Bright, Paul Donovan, Brian Mooney and Martin Smith for the spirited discussion which led to this article.

Simon Lord is Editor of Franchise New Zealand and has worked in franchising in New Zealand and the UK for over 30 years. Thanks to Dawn Engelbrecht for her contribution and to Ross Blake, Michael Bright, Paul Donovan, Brian Mooney and Martin Smith for the spirited discussion which led to this article.

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