Franchise, business or keep my job?

Submitted by Fayaz on Sat, 01/10/2009 - 1:52pm.
The main reasons why you should be in a business or franchise.
 
Many people who are wary of the business world and its challenges ask me why they should be in business instead of having a steady job. A perfectly normal question with many reasons I have elaborated here.
 

Firstly, it is my opinion that there are situations in business where the ROI is in the 25-35% and higher range; maybe less so in the 2008-2011 Great Recession, but it was certainly true in the past, and buying an existing established franchise may still yield these returns if the deal is valued and structured correctly. In today's market, the buyer is in control (except for the World's # 1 Subshop) and can negotiate for seller financing.

 
Secondly, when you have a job, while it may be steady, there is a limit to what you can make. Don’t misunderstand me – with stock options, 401k plans and benefits, you may be in a great position; then don’t move out of your comfort zone unless you are a risk taker and are driven by a suppressed entrepreneurial spirit
 
Thirdly, being in business may afford tax advantages during your tenure as well as when you sell(think Capital Gains Tax on the appreciated value of the business). As the business grows, so should its value. Not to mention some of the perks of business ownership. When you attend a business related Convention, whether you fly First Class or Economy, you get to deduct the expenses, and the Hotel......you get the picture. Think Family vacation.
 
Fourthly, as you build your business and systems are in place, you can schedule your time better and hopefully have more vacations or quality time; not all franchise/business owners are stuck to their empires 24-7, 365 days. Organise it and “make a plan” (delegate) as they say in Africa.
 
Fifthly, for every $1 over a certain threshold you generate in Net Profit, its value goes up according to the industry multiple, say 3 times for this example. That is how you build value and equity. And if your cash flows are higher than you need to live off, then this excess can be used to acquire assets (think Real Estate, Art) outside of the business
 
The 2010 business market is in a state of flux and uncertainty, so buyers need to beware: do extra due diligence, get the advice you need, and take advantage of the deals out there. Except for Subway, cash flows(Sales and profit) are lower, valuations are lower, and less deals are being completed. Seller financing is the best way to make deals as financing is tight and banks are demanding better and more collateral, some industry experience and have upped their cash flow coverage ratios. So what are all the unemployed, underemployed, and eligible franchise prospects doing? sitting on the sidelines? waiting for the economy to improve? I guess......
 
Do you ever wonder why your next door neighbour appears so successful, whether its his toys, or his general positive outlook and enthusiasm? and he owns a few franchises you have never heard of or thought of? That is because he is living his dream and fueling his ambitions of entrepreneurship by acquiring more franchises; he will hopefully be a wealthy man when he sells his Franchises. You have heard of the many Subshop success stories and millionaires it has created. If you missed that train, there is an Extreme Pita express at the station. Join us !
 
This much is certain:when you have a job, after 40 years of working 40 hours a week, 40 people will show up to your retirement party and present you with a $40 watch. And they will miss you for 40 days. You choose.

For more discussion on this contact me, fayaz@mrfranchiseman.com

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