How To Successfully Define Your Franchising Goals. Written by Terry Powell, Visionary Founder of The Entrepreneur’s Source. Originally Published in Forbes: Oct 23, 2018.
Many people dream of starting their own businesses, and a lot of people follow those dreams through franchising. It’s a business model that people love, and for good reason. When you invest in a franchise, you’re investing in a proven business model.
But before you invest in a franchise, you need to get to know it first, and even more so, you need to know yourself. What are your goals, needs and expectations? Furthermore, have you thought about what your income, lifestyle, wealth and equity (ILWE) goals are? These are all great questions to ask yourself as you explore business ownership.
It takes a lot of time, soul-searching and number-crunching to fine-tune these goals. I know; I’ve coached countless franchise owners on this. But if you want a quick crash course, zero in on the following.
Think of this as your short-term earning goal. What do you want to be earning in a year or two, during the early stages of being a franchise owner? Whatever franchise you invest in, ideally, it’s going to be something in which you can achieve the type of yearly income you’re seeking. If, for instance, you have modest income goals for the moment, a franchise that takes a while to ramp up and see profits might work out fine. If your income goals are pretty substantial, then clearly the franchise you invest in should generate revenue that reflects that.
How do you see your day-to-day life once you’re a franchise owner? Do you see yourself immersed in your business, working from sunrise to sunset and potentially weekends? Or do you see yourself delegating key tasks to great people you hire, letting managers and employees do most of the heavy lifting so you have more time to do the things you enjoy most?
Everyone has their own ideas, often based on where they are in their lives and how involved they want to be when running a business. But not all franchise businesses will allow you to live the way you want. So, whatever franchise you choose, make sure it’s going to offer you the freedom and flexibility you need for the lifestyle you want.
You’re probably wondering how “wealth” is different from “income.” These are your long-term earning goals. For instance, you probably want to earn enough income in the short term so that you can put a healthy amount of it aside and grow it through investments.
You also want to think ahead and ask yourself if you want one franchise or if you want several (which connects us back to “lifestyle”), since owning several will likely lead to far more wealth.
These goals involve debt. Nobody wants debt, of course, but when you invest in any business, you’re likely going to carry some. How much debt are you comfortable carrying, especially if you own more than one franchise? How fast do you want your debt to be paid off?
Those are also some important questions, and it’s a strategy that you’ll want to develop to help make sure that your “wealth” goals are achieved. That’s because the equity side of the equation involves the assets you’d like to build through your new business. The quicker you can eliminate debt and take ownership of more of the business (including the building, inventory, etc.), the stronger your equity.
It all sounds easy enough, I realize, but franchising is a commitment. Outlining your ILWE goals correctly is vital as you explore business ownership. Do that, and you can find the right franchise match.
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