Will You Sink Or Swim?
In 2013 in the UK, there were 346,000 business births, up 77,000 on the previous year, and the biggest increase since the series began. Business births outnumber business deaths by 109,000 in 2013, the largest margin since the series began. That is a lot of net business increase and quite a lot of dreams fulfilled. The two questions that jump out to me are why were there so many deaths? and why were less than 2% of the start ups franchises?
Let’s deal with the deaths first. I imagine that the number of people who started a new job and left, or were dismissed, are similar to these figures and the same reasons will be driving both areas – a lack of understanding on what exactly is required for the role. I can tell you that in business there are no short cuts and there are certain things that have to happen on a daily basis that require discipline and confidence. For example, marketing to a certain number of people, selling to a certain number of people at the right margin to generate enough revenue to pay for all your running costs.
Nobody can fully prepare you for business ownership because just like anything else of significance, the education comes in the experience. Only, running your own business sadly doesn’t allow you room to make that many mistakes whilst you are learning. And it certainly doesn’t take into consideration your mental state. Thus it ruthlessly takes no prisoners and very quickly leaves the unprepared dead in the water. Those who are more suited or more resilient stay afloat, with the more proficient actually learning to swim and beginning to control their position in the water. The swimmers are in the minority though without a doubt.
So what is the solution? Let’s come to it after we deal with why so few start ups are franchises...
It’s hard for me to imagine what being an employee is like, in fact it sends shivers down my spine: the thought of being at the mercy of other people (who probably know less than the people they direct). Having met hundreds of people looking to start their own business or become their own boss, I would say this is the number one reason why they want to be their own boss – they are sick of working for other people.
Here lies what I believe is a misunderstanding of what franchising is about. To some extent owning a franchise isn’t like being your own boss. The freedom and rewards that can come from business ownership actually require that YOU are the most ruthless, disciplined, unforgiving, highly expectant boss you have ever come across in order to be successful – SHOCK! And guess what? Most people, in fact nearly a quarter of a million (250,000!!!!) didn’t expect that and thus struggled to stay in business.
Franchising provides a solution to this. It offers you business ownership and the authority of becoming your own boss but you are not alone. You have very experienced coaches supporting you and guiding you so that you don’t kill your dream. Hence why the percentage of franchise operations that survive is so much greater than standalone start ups.
If you are one of the future 350,000 expected business start ups this year then before you do anything else I would recommend that you go and visit a franchisor in the industry you are considering, and openly and honestly talk to them about your desire to start your own business. Any decent franchisor will explain the positives and negatives and at the very least you can make an informed decision about franchising. It might be the very thing that keeps your business dream alive.