In the late 1980s my business career reached a fork in the road. Having left an executive position at a computer hardware manufacturer, the choice for the next source of income came down to two options: consider a CEO role at a company in a city about an hour away or go into business for myself. You may be facing a similar pair of options at some point. Now, 23 years later I’m glad I took the road towards independence. Making the decision was a bumpy road however.
Choosing to be my own boss was relatively easy because as an employee at whatever level, chafing at the bit and second guessing bosses made my business life difficult at times. In considering the CEO opportunity, not only did the daily commute (moving was not an option for family reasons) pose an obstacle, but since the company was venture capital financed, the real bosses were those who put the money into it. Satisfying them was a big part of the job, and that might have been a challenge, and it was definitely an unknown.
During the six months I was searching for the right next step, the career guidance firm I worked with included assessment tools that evaluated your ability to be an entrepreneur. Not surprisingly, I scored high in that category. But what sort of business was right for me? They had an assessment for that, too. It pointed me towards a B2B business, and identified potential franchisors to consider.
But wait! Wouldn’t a franchisor be a boss, too? Wouldn’t it be too constraining to live within a system that shoehorned me into a particular mode of marketing, sales, production, etc? After rationalizing those concerns away, I started down the road to accepting a franchise that was in an industry with which I was familiar, included extensive use of computers in the business, and serviced the needs of businesses.
It sounded good, I sent the initial deposit, and then began to review the franchise agreement with the aid of a counselor at the career guidance center who had been an attorney for a franchisor. We found a number of issues and my negotiations with the franchisor became sticky. The relationship ended suddenly when my check was returned with a Dear John letter after three months of trying to nail down the agreement.
In retrospect this was the best thing that could have happened to me. Concurrent with the negotiations, I networked within the local business community and my banker connected me with a business owner in a nearby town who owned the same kind of business, but was not a competitor. Through him I met an equipment distributor who convinced me that he could provide me with the complete set of equipment and ancillary items needed just as effectively and at less cost than the franchisor. He also made an important point to me: the primary benefit of the franchise system was its marketing guidance. Finding people who could operate the equipment, developing the financing, and most of the other details of starting a business would fall on me shortly after the franchisor blew into town, set me up, and then left. Since my career to date had been in marketing and sales, there seemed to be little benefit in becoming a franchisee and paying a percentage of revenue for ever, primarily to gain access to their marketing system and support.
DIY worked for me and the business went well. But after about ten years a competitor saw synergies between our two businesses that enabled him to gain a foothold in a different market and he bought me out. (Along the way I had acquired another business which was an interesting experience. And selling mine was an odyssey that proved stressful for both seller and buyer. But that is another story.)
For me, entrepreneurship is not the same as being a franchisee. There is immense satisfaction in starting from zero, making the necessary connections, and then executing a marketing and sales plan that works. But that came about because I had some previous knowledge about the business, absorbed detailed knowledge from every source I could find, and networked extensively. And continuing volunteer roles within the community developed the personal connections that led to more and more business.
What about you? If you find yourself frustrated and constrained in your current business role, what are your next step options? If you are not sure, use some assessments to learn more about your personal style, your value system, and your interest in independence. Decide whether running your own business within the system devised by an experienced franchisor is the right way, or whether you need the complete freedom to do it on your own. If you are an independent type, then go for the DIY, but be smart about it, Make a good business plan. Line up your advisory team, make sure you have plenty of resources (cash to invest and other cash to live on for a number of months) and then take the plunge.
On the other hand, if that path seems fraught with excessive risk for you, look into buying a franchise. And if you take this route, make up your mind to get everything you possibly can out of the franchisor. Exploit the business system provided to you, absorb the training, and milk the support staff dry. Become a squeaking wheel in the early months of your new business and then as your fledgling business matures, understand that you will develop a love/hate relationship with the franchisor. You will become exasperated with them, and they with you. But it is a relationship you need to nurture because your future is tied to theirs and vice versa.
As a teenager, I became keenly aware of the vagaries of being in business for yourself, since I watched my father struggle from time to time to make ends meet and grow his professional business. I vowed then that I would never get into a situation where my income was so uncertain. What I overlooked was the fact that as an entrepreneur, he was free to call the shots on his time, something most employees cannot do. He also enjoyed many activities and volunteering that an employee would find hard to fit into daily life. These are the benefits of owning your own business.
People define success differently. And it isn’t always about making the most money. At least I came to the realization that owning my own business would work better for me. It did. And I wish I had come to that conclusion ten or fifteen years sooner. If the urge strikes you, give it serious consideration. Life as a business owner is sweet…except when it’s sour (which isn’t often!)
