by Simon Lord
last updated 10/01/2021
New year? New start!
by Simon Lord
last updated 10/01/2021
Ready for a change? Is it time to get into a business of your own? Is a franchise a good option? What do you need to do first?
The start of a new year is always a good time to examine your life and decide what direction you want to go in next. The pandemic and the resulting disruptions over the past year have caused many people to question what’s really important to them, and how are they going to make their life better? That’s why people make New Year’s resolutions – but while going to the gym every day or giving up pies might only last a month or so, buying a business is a long-term decision that will change your life.
Judi and Earl McWhirter, achieved a level of success they never expected when they bought a franchise and started their new business at an age when many might be considering retirement. The 2017 Supreme Franchisees of the Year proved that there’s no right time to start – only the right time for you. And the 2019 Award winners, Sarith Thong and Helen Lin, also showed that buying a franchise can take you to greater heights than you could achieve on your own. They had owned lunch bars before joining The Coffee Club, and now have two much bigger businesses – and a whole lot of help and support.
So if you’re frustrated with your current job, looking to improve your net worth or feel that there might be more to life, buying a franchise can provide excitement, adventure, opportunity and financial security. It can give you less time on the road, more time with your loved ones, more flexibility over where and when you work, more control over your life. It will probably also give you greater challenges than you’ve ever faced before and involve a lot of hard work. If you’re prepared for that, now could be a good time to consider making a new future.
Why is now a good time?
Apart from being the start of a new year, there are several reasons to consider a business of your own right now:
- While Covid19 has disrupted many industries, it has also opened up all sorts of new opportunities. Some industries have suffered but are preparing to bounce back; others have thrived.
- Financing costs are at record low levels. If you need to borrow money to get started, it’s more affordable than ever. Interest rates are expected to stay low for some time, allowing you to get your new business established.
- Rising property values around the country have increased the equity that many people have in their houses. That makes it easier to raise the necessary finance or, if you want to move out of a city, may mean you can release some capital to help fund the business and reduce borrowings. The fact that property prices have been rising so fast could also make a business a more attractive investment - in many cases, you can buy your own busines for much less than the cost of a house!
- There are currently more opportunities than franchise buyers, especially with immigration slowing down. Immigrants are more likely to look for established businesses than start new ones. It means franchisees prepared to start from scratch can have their pick of the best opportunities and the best locations – and a market of ready buyers when the time comes for them to move on.
- New geographical areas are opening up for business all the time. That’s especially true in Auckland and Christchurch, but there are opportunities in many regional centres, too. These offer lower costs and, in many cases, less competition while allowing you to live in some of the more beautiful parts of the country. Find out other advantages here.
- Changes in many industries have seen new sectors and new types of franchises emerge. This means you have to choose carefully – the rapid rise of online shopping has changed the dynamics of many businesses – but get it right and it can be very rewarding. Companies like Pack & Send, InXpress and Aramex/Fastway Couriers are growing on the back of online deliveries, while digital technology is changing the way restaurants operate, houses are designed and marketed, and training is delivered.
All these factors could work in your favour if you are ready to consider buying and running your own business.
What skills do you need?
If you’re considering buying a franchise, be aware that although it’s important to be passionate about what you do, you don’t necessarily have to have direct experience of the business – in fact, some franchisors may prefer that you don’t arrive with a career-full of preconceived ideas. A good franchise will provide you with everything you need to succeed and train you in how to operate the business in the most efficient and profitable way possible.
There are plenty of examples of people who changed industries and found success: farmers turned technicians, factory managers turned gardeners, executives turned accountants. Some have brought entrepreneurial experience to a different industry, like home building; a fast food worker using her people skills in her own home cleaning franchise; and a cabinet maker putting his attention to detail to good use in the role of building inspector.
And age doesn’t matter, either, with franchising enabling you to start young, to plan for retirement or to come out of retirement to follow a passion.
But you do need the right skills and attributes for the type of franchise you choose. Sales and marketing experience is always valuable, but so are other backgrounds: for example, policemen often do well in the hospitality industry because they are used to dealing with people and taking control – it’s obvious when you think about it. But they might not fare so well in a less sociable business that would suit others down to the ground. So consider your strengths, weaknesses and interests. What skills do you have, and are they transferable to a new career? For example, are you good with your hands? Are you good with people? Are you good with kids? Are you good at following systems?
Are you a team player or an individual? Do you want to do everything for yourself, or lead a team of others? Apart from your own experience and knowledge of yourself, you might talk to others who know you well. A book called What Colour Is Your Parachute? by Richard Bolles contains some extremely helpful exercises, and there’s a companion website at www.jobhuntersbible.com.
Speak to self-employed friends about the reality of working for yourself, and decide whether it is for you. Only after you have gone through all these steps will you be in a good position to consider any specific opportunities.
The support of a team
One of the biggest advantages that franchising can offer you is that not only do you have a franchisor and professional mentors to help and guide you, but you’re also surrounded by other people – your fellow franchisees – who face exactly the same challenges as you and are happy to share ideas and solutions.
As Just Cabins franchisee Earl McWhirter told us in 2017, ‘The great thing is that we’re not actually competing with each other so we all talk about things over the email network and help each other out. I had a front towball fitted on my 4WD which is great for manoeuvring the cabins, so I told everybody, and another franchisee designed a new light-bar and shared the design. These things make a difference – there’s a feeling of “We’re all in this together”.’
It’s important to recognise that every business owner needs someone to share ideas and concerns with. As well as fellow franchisees, the franchisor and their field support team, it also means close friends or family members need to be supportive. Research a few years ago by the Franchise Relationships Institute found that good family and social support was by far the most powerful predictor of franchisee success. In other words, if you’re buying a franchise, it’s vital that your family understands what is involved and is right behind you.
By the way, when you’re investigating a franchise, the existing franchisees are good people to talk to – after all, they’re already living the life you are considering. Read about the questions you should ask them.
What do you want from life?
Working with family is a common reason for starting or buying a business, but a desire to have more time for your family is more common still. In fact, a survey a few years ago suggested that almost a third of franchise buyers do so to have more flexibility and life balance. While building personal wealth was also a strong motivator, the other common reasons are about people, not profits. They include: ‘have greater control over how I do things’; ‘have more security and stability’ and ‘achieve a personal challenge’.
It would be a mistake to think that owning your own business is going to give you all those benefits right from the start, though: at first, you’ll find the ‘personal challenge’ aspect is by far the major part of your life. The good news is that with a good franchise you’ll get the planning tools and support you need to make your personal goals achievable. So before you start trying to find the perfect business, you need to work out what you really want from it. Some questions you might ask yourself include:
- Where do you want to live?
- Do you want to work fixed hours or be flexible?
- What time of day best suits you?
- Who do you want to work with?
- What sort of work do you want to do?
- How much do you want to earn?
You also need to consider any genuine constraints that might stop you reaching your goals immediately. What’s realistic right now? Can you work out some short-term and medium-term steps that will take you closer to your long-term goal? For example, you might read up on franchising, learn bookkeeping or improve your computer skills. Or you might look at a part-time or low-investment franchise now that will help you build capital towards the business you really want in a few years’ time.
What do you want from a business?
In order to find an opportunity that suits both your personal and your financial goals, it’s a good idea to sit down and work out exactly what you are looking for in a business.
Earl and Judi McWhirter knew exactly what they wanted from their business: something that wasn’t full-time, could be operated out of school hours, had less risk than rental properties and could be grown at their own pace. As a result, when they found their perfect franchise they were in total agreement this was the right business for them.
Making a checklist is a great way to ensure you don’t get involved in an unsuitable business because you overlooked something or got carried away by enthusiasm. You’ll need to enjoy your business – even have passion for it – if you’re to get the best from it. Ticking the boxes won’t replace passion, but if you choose a business that fits your needs and abilities, it can help ensure that your passion creates the results you want.
Be prepared to seize the moment
As well as knowing what you’re looking for, you also need to prepare yourself so that you’re in a position to take action when you find what you want.
Paul and Denise O’Leary spent two years looking for the right business and identified the industry and the franchise brand they wanted. They had a clear goal of owning multiple units and were prepared to move for the right opportunity. That’s why, when a Domino’s came up in the perfect location in New Plymouth, they were able to pack up and leave Hawkes Bay knowing that they had done all they could to be ready when the moment came.
If, like them, you have the freedom to move and are flexible about where you go, it means you’ll have a lot more opportunities to choose from. Franchisors might have good new sites available in certain key areas, with customers ready and waiting. Equally, existing businesses come up for sale in all parts of the country. Operating outside the big cities can mean lower costs but not necessarily lower profits.
One of the stories we often hear from new franchisees is, ‘We bought the business just before or after our first baby was born – good timing, eh?’ Well, in many ways that is good timing, especially if you have family support to look after the baby or work in the business. The flexibility to work on accounts, rosters or sales at home can be a real boon for new parents. As Franchise New Zealand co-publisher Lorraine Lord, who combined a new business with a 6-week old and 21-month old, points out, ‘People can cope with incredible change and adrenaline will take you a long way for a while. It’s important, though, that the changes you make are in-line with your long-term goals, or when the adrenaline starts to wear off you may be disappointed.
‘Actually, if you choose carefully then owning a business can offer ongoing benefits when raising a family – especially if you work from home. Having flexibility allows you to juggle commitments and makes childcare easier – you can be there for school holidays or teacher-only days with less hassle, as well as being involved as a parent helper on outings or sports days. You still have to make times to focus on your business commitments, of course, but many people make it work.
‘The other thing to bear in mind is that if you really, really want to own your own business, there’s very rarely the perfect time to do it. If you wait for all the circumstances to be right, you might never make the change. Do you want to spend the rest of your life wondering?’
Feel the fear and do it anyway
Over the years, we’ve talked to thousands of franchisees, and almost all of them have admitted to being quite scared when they took that first leap into self-employment. As one franchisor told us many years ago, ‘When you work for someone else, you have set limits within which you can operate, and people with whom you can consult. But when you operate your own business, the buck really does stop with you. Every decision, whether large or small, has to be made by you. Every purchase you make is spending your money. Every contact you make with a client affects your income. Some people thrive on that – others freeze.
‘But buying a franchise bridges the gap between employment and total independence. You have the guidance and the training which helps reassure you that you really do need to spend money on this or that, and you also have a peer group of other franchisees to talk to and share experiences with – quite apart from the franchisor.
‘And once you’ve made the decision and get busy creating and growing the business, the fear becomes part of the excitement.’
One of the factors that triggers many people into buying a franchise is redundancy. ‘If I hadn’t lost my job, I would never have owned my own business – it was the best thing that ever happened to me,’ they say.
For these people, it took something external to push them into realising their own potential. But it doesn’t have to be that way. If your current job isn’t satisfying you, or providing the flexibility you want, or you want to build an asset, or you want to work with family, you can choose to do that at any time. Buying a franchise can help you achieve all of those – but you need to be clear on your goals, put time into researching the right franchise for you, and be prepared to seize the opportunity when the time comes. Read more about the pros and cons of buying a business after redundancy.
The Award winners like Earl, Judi, Sarith and Helen might represent the top achievers in the wider franchise world, but success in business isn’t about trophies and titles – it’s about living the life you want. So as you sit by the beach this summer, think about what you really want for your future. 2021 could be the year when you start to create something new.
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