"I Want To Start My Own Business!"

“I’m tired of constantly worrying about my job security and I’m really tired of working for other people. I’d really like to own my own business, but I don’t know what business to start, or where to begin.”

These are words many of us are saying these days. Downturns in the economy and record unemployment statistics only fuel the desire so many of us have to own our own business and make that our vocation – abandoning the “corporate rat-race” once and for all. But what business should I try to start? How can I be sure it is successful? Don’t private enterprises fail frequently? Should I begin my own business once I determine what it is, or should I join in a franchise operation?

These are valid and serious questions each of us has to answer. Our goal is to own a business that is lucrative, profitable, and enjoyable. Most importantly, it’s OURS and we don’t have to worry about corporate downsizing and lay-offs. Look at the following statistics.

• Less than 20% of start up companies remain in business after 5 years.

• Approximately 92% of franchise operations are still in business after 5 years. 86% of these still have the original owner.

• Franchising represents about 42% of all retails sales in the United States. Current estimates suggest this number will increase over the next 5-10 years to more than 50%.

• A new franchised business opens every 8 minutes in the United States.

• In 2000 (the latest statistical year reported) the median annual, gross income of franchisees was in the $75,000 to $124,000 range. Over 30% of franchisees reported earnings OVER $150,000 per year.

Clearly franchising has some significant advantages over start-up businesses as is evidenced by these statistics. Why? Because start-up businesses are extremely difficult to successfully operate and they have some serious disadvantages. For example, the market place is not very tolerant of the inexperienced entrepreneur trying to learn how to operate a new business. In today’s market place, if you can't compete quickly and effectively, in a very short period of time the business will fail. Having a business fail can be a horrible experience, yet unfortunately this happens to thousands of entrepreneurs every year and in many cases it is unnecessary.

All new endeavors involve a learning process. This learning process requires going through a series of trial and error encounters. Knowledge is gained by trying and failing again and again, and eventually trying and succeeding. This process is often called the “learning curve.” In franchised businesses, the franchisor has already gone through the learning curve, has learned the secrets of success for the specific business, and is able to transfer this knowledge to the franchisee. This is a significant advantage to an entrepreneur and is the first reason why you may consider a franchise.

In our future blog entries we will discuss the advantages of franchising, and how that significantly reduces the chances of business failures while retaining business ownership advantages.