Becoming an entrepreneur is probably one of the most nerve-wracking endeavors any of us can undertake. Especially if it means leaving behind the relative certainty of a Corporate job that offers a regular paycheck, health benefits, and even that wonderful 401K matching contribution.
The fear of taking the leap into entrepreneurship is natural. There is real risk in putting your livelihood on the line, especially when you have family members depended on you to provide for their future. It is that step into the unknown that causes that fear, and it is the aversion to failure that fuels it. Yet, most of the wealth in America is not inherited wealth. It's wealth built by folks who have taken that leap, who have believed that they can be their own boss, and in the process, have reinvented themselves by taking control of their destiny and going places they never imagined possible.
There is a countermeasure to that fear, and it has to do with 4 key elements:
Self Awareness: Determine what skills you bring to the table, including people skills, management, technical, organizational etc. Think about your strengths and challenges as they relate to functional areas of business you have had experience with. Have a clear vision that provides a blueprint and a guideline for your desired direction.
Fact Finding: Learn everything you can about your target industry and the type of business you are thinking about, the growth prospects, demographic influences, geographic and seasonal variations, and competition.
Preparation: Develop a detailed execution plan that addresses operational, financial, and human resource related issues for the planned business. Develop a realistic business plan that is based on knowledge of similar businesses with a known track record.
Validation: Find a way to validate your assumptions and business plan by investigating first hand businesses that are already operating, and asking the right questions directly to other entrepreneurs who have already done it successfully.
If someone came to you and told you that a lot of the work related to the fact finding, preparation, and validation is already compiled and accessible, what would you say? That would reduce some of the anxiety related to uncertainty, wouldn't it? That's precisely what a franchise system can offer. There is, of course, no substitute for knowing yourself and understanding you skills and strengths. But once you do that, the right franchise system offers you access to a knowledge base and a repeatable blueprint with verifiable past performance.
At the heart of that accessible body of knowledge is the Franchise Disclosure Document (FDD) that each franchise opportunity is obligated to make available to every franchisee prospect, mandated by the Federal Trade Commission (FTC). It's a 200-page document full of information about the history of the franchise, key management, past litigation or financial issues, investment costs, details about the products or services, and franchisor/franchisee obligations, among other sections. Even more importantly, the FDD offers financial performance representations for existing operations, as well as a list of all existing franchise locations.
Your ability to balance the fear of taking the entrepreneurial leap doesn't stop with access to knowledge through the FDD. The Franchisor has a vested interest in partnering with the right candidate, so they want to make sure there is mutual fit. That is accomplished through a series of conversations and encounters that culminate in an invitation for a Discovery Day at the Franchisor headquarters. The Discovery Day is a unique opportunity for you the candidate to see the operation first hand, meet the executives, and gain a deeper understanding of what it means to own that specific business. At the same time, it is the Franchisor's opportunity to make sure you are the right candidate that could launch a successful new franchise location.
One of the most important final steps in your investigation is the Franchisee validation. It is your opportunity to visit with actual franchisees who own other franchise locations, assess their operation first hand, ask questions about what it takes to get it going, and what it takes to be in their shoes. You'll have the ability to talk to successful ones and not-so-successful ones, a fact that would give you a really good insight as to where you would fall based on your own strengths and skills.
There may be no cure for the entrepreneurial jitters, but there sure is an antidote strong enough to give you a real fighting chance: The calculated risk of buying the right franchise that fits you.
Mr. Georgiou is currently the President of CrossRoads Business Brokers, Inc. & www.TheFranchiseCrossRoads.com, and has been involved in a great number of business transactions over the last 10 years. He is also a national Franchise Consultant with FranChoice advising hundreds of franchise Candidates in their search for a franchise. Since 2008, he has been a successful multi-unit owner/operator of a Home Care Franchise in California. Previously, Mr. Georgiou was a former Senior Manager with KPMG Consulting (BearingPoint) where he advised and assisted various Mid-Market companies with operations, strategy, and systems.