I heard on public radio a few days ago that defaults on SBA guaranteed loans to franchisees rose more than 50% last year. One in 10 franchises closed their doors. Many businesses that are not franchises will fail as well.
I mention franchises because they supposedly have an edge over independently owned businesses. When you buy a franchise, you buy an established brand and a business and marketing model that has proven to be successful.You get the resources and suppliers. You get the advertising slicks that all you have to do is fill in your local info and send them to the local media.
The problem with most—both franchises and independent businesses — isn’t just the economy, but it’s really more the mistakes they’ve made from the day they opened their doors.
The economy is merely the straw that broke the camel’s back. We’ll talk about some of these mistakes in a later post. But also during depressions and economic downturns, new independent businesses that will later become franchises are begun. They don’t start as a huge business with all the resources they need to get established.
They start out just as you are. McDonalds is one example. It started as a small local business in a depressed economy. It was grown into a huge franchise much later.
Independent businesses have advantages over franchises that are rarely mentioned. A franchisee trades dollars for a business model BUT YOU:
- You begin with an idea that you are enthusiastic about.
- You do your research and learn whatever skills you don’t know.
- You locate your own suppliers and talk to those suppliers about the particular niche you’ve chosen
- You learn from the ground up.
- You create your business plan based on what your vision is for your business and what money you have to put into it.
- In the end, Your business isn’t a replica of one in San Jose, CA or Tampa FL.
- Your business is unique.
As a result, when you talk about your business you understand it. You are enthusiastic. And, if you’ve done your research right, you’ve selected the proper business model, the best location for your business (whether it’s in rented real estate or is homebased) and you know what to expect from your business.
You are your business. You make the decisions and those decisions will determine its success or failure.
Mike will be an invaluable resource for those that are looking for a
coach or mentor!
Thanks for taking the time to comment, Diane. A business mentor can be invaluable but you do have to be careful that you are paying someone who has the knowledge and expertise to guide you in the right direction. Here in the US, there are several. Mike Nease, who has just retired from Imperial Foods after many years in the industry, has just begun offering this service. You can find information about it on our forum at http://www.giftretailersconnection.ning.com
Hi Joyce, your comments are so true, especially your last one about “You are your business and the decisions that you make do determine whether you succeed or fail.” In New Zealand you can find a Business Mentor who will work alongside you, both if you are starting out and if you are further down the track/years in your business. This can help to direct and guide your business decisions, and focus you on your business, whilst you are still working in it. Do you have anything like this in the USA Joyce?