short answer is: “It depends.”
And what it depends on is largely based around which franchise offers a proven and validated business model that aligns with your skills, goals, ideal role as the owner, and offers you the highest probability to achieve your lifestyle and financial long-term goals.
Sorry, boring answer.
What’s hot isn’t always what’s right for you
Leading with the question “what is the hottest franchise?” can lead you down the wrong path. It tends to create a focus on the widget (i.e. product or service) that a particular franchise offers which can lead to making a decision largely based on the “hot” trend that a franchise may be riding and not drilling down deep enough to understand if the role of the owner in building the business matches your skills, strengths and wants.
In my experience, this can be a dangerous path to follow as it can mislead someone to not evaluate the totality of the franchise business and lay all the factors against the personal criteria that help to ensure a good long-term fit. In a nutshell, the reality of being the owner of a “hot” franchise and actually running the daily aspects of the business may not be what you want to be doing day in and day out.
Chasing the “hot” franchise is almost like chasing the “hot” stock. Chasing the hot stock is generally a strategy to follow when searching for short-term returns (a nice way of saying “get rich quick”). However, unless you are an outstanding day trader, rarely will this approach achieve your long-term goals. The same logic applies to starting a franchise or any business that matter – there is no shortcut to entrepreneurial success. When formulating a long-term more reliable investment strategy, the conventional advice is to build a portfolio using the help of a financial adviser that is comprised of a diverse mix of investment assets – some that produce short terms returns, but mostly comprised of historically proven performers in stable industries that offer a safer bet for long-term returns to help achieve one’s financial goals for retirement.
There are thousands of different franchises out there, how do you know what is right for you?
Investing in a franchise that is the right fit for you is more analogous to the process you followed to build your long-term financial and investment plan. You probably worked with a financial adviser who helped you to lay out your personal and family’s long-term financial goals and then built an investment plan that put you on a path towards those goals. Good financial advisers drill down deep to understand your risk tolerance, utilize tax-efficient methods to maximize your returns, take into account non-retirement financial goals such as savings for kid’s college funds, and a host of other details that help to ensure you have a plan in place that gives you the highest probability of achieving your long-term goals.
Over the decade or so I’ve worked with franchisees and prospective franchisees, I’ve had the pleasure of helping hundreds of people make the life-changing decision to start their own business and invest in a franchise that was the right fit for them. Many of these folks have gone on to build a life for themselves and their families that they had only dreamt about. And what’s very interesting is that just about all of the happiest and most successful folks I’ve worked with ended up investing in and starting a franchise business they had never thought of or heard of before. Furthermore, they would have never researched in the first place because they would have dismissed as a potential franchise opportunity solely based on the widget the business provided.
Should you follow your passion?
Be careful. I’ve seen people fall into the trap of starting a business that aligns with a particular passion. I say trap because passion doesn’t always align with the realities of building a business that is financially viable. Just because you are passionate about it, doesn’t mean it is a good business. Furthermore, following a passion to start a business can quickly lead to someone losing that passion because your passion becomes your work. As the business owner, you have a lot of other obligations to build a successful business which you might not be passionate about.
Mike Rowe, most notably known as the host of the Discovery Channel’s show Dirty Jobs, offers an interesting opinion about following passion…
So, if not “hot” franchises nor your passion, what should you follow?
Start with your WHY…
Do you enjoy helping other people solve a problem?
Do you enjoy motivating other people to achieve goals?
Do you like working hard to achieve a personal goal you have?
Do you enjoy leading and managing people like you want to without combatting politics or organization bureaucracy?
Do you want to build a business where you can put your skills to use and build something that enables you to achieve more personally?
Are you comfortable pursuing opportunities that others don’t see?
Business ownership is an opportunity for many people to create something for themselves and achieve the vision they have for themselves and their family. Everyone’s vision is different and highly personal. Some people want to spend more time with their families and get off the road. Some people want to stop building wealth for other people and shareholders, and build an asset for themselves. Some people want to put their skills and abilities to use in their own business and get away from the trials and tribulations of working in large corporations.
Whatever it is you want to achieve, the first step is identifying it and rolling it into a vision. Your vision will become your passion that fuels you to achieve it.
The next step is researching different businesses to find the one that offers you the highest possibility of success in achieving your vision.
The final step is working hard to build your business to make your vision a reality.
Click here to download an exercise that can help you define your WHY and create your vision.
“Follow opportunity, not passion”
Did you catch that piece of advice from Mike Rowe?
Many of the best franchises available are in fact businesses that were started because the founder saw an opportunity that other people didn’t.
Brian Scudamore started 1-800-Got-Junk because he saw an opportunity to professionalize a fragmented industry and build the Fed-Ex of junk removal. He wasn’t passionate about junk. He wanted to be a ski bum and needed a way to pay for college. One day, he saw a ratty-tatty junk removal truck driving by and recognized there was an opportunity to professionalize the business. He created a vision, wrote it down on a piece of paper and started building the business. He quickly saw success and wanted to help other people enjoy his success so he invested in infrastructure, systemized his business, hired a staff of professionals and made his business model available to others through a franchise.
$100 MM+ dollars in system-wide revenue and over one hundred locations later, 1-800-Got-Junk is a household name. This organization has been so successful that every franchise opportunity in the US has virtually been sold. I can confidently say that each and every 1-800-Got-Junk franchise owner is just like Brian – they were passionate about their vision, not junk. Each owner knew that starting and building their own business was the only way to achieve their vision. Rather than reinventing the wheel, they did their diligence and decided 1-800-Got-Junk offered them the opportunity to reach their vision.
The decision to open start your own business is a massive decision. By starting with your WHY and creating a vision that you can get passionate about you’re setting yourself up for success in whatever business you decide you start. These two key elements will help open your mind to business opportunities that you may have been overlooking and ultimately lead you down the right path to figure out which business is going to get you where you want to go.
If you’re serious about starting your own business this year or perhaps making a career change and are curious if investing in a franchise is something that could be a good fit, I’m happy to chat with you and share with you all that I know about franchising (and I’ll never ask you for a dime).
Just find a time on my calendar that is most
convenient for you and I’ll call you then. You can access my calendar online
Cheers to your success!