There’s never a wrong time to reflect on all the hard work you do as an employee. You’ve worked tirelessly to get to where you are today, and you’ve learnt a lot along the way.
You know all about working for someone — but what do you know about working for yourself? The answer may surprise you.
Former employees actually make great business owners. They know what it takes to operate a business from the inside and have already acquired many of the traits of a successful entrepreneur.
As a franchise coach, I know how much courage it takes to make that switch from employee to business owner. But going into business for yourself can be the most rewarding experience — if you are ready to take on the challenge.
Here are some things to consider when you’re going from employee to business owner:
1Why do former employees make such great franchise owners?
Successful corporate employees know how to lead a team while also respecting the organisation they work for. They have well-developed core business skills such as sales, marketing, finance, leadership and people management.
All of these skills are essential as a business owner, and corporate employees have already learnt many of them.
Former employees can appreciate the structure of a quality franchise system and know what it takes to make their franchise a success.
2Do you have the entrepreneurial spirit?
How can you know for sure if franchising is the right choice for you? While there is no one correct answer to that question, there are certain qualities a person must have to be successful in franchising:
You are willing to lead. If needed, you need to be willing to take charge of a situation and make things happen. At the same time, you must be willing to empower your employees.
You are financially stable. Every successful entrepreneur knows how to manage cash flow. They know both their income and expenses and work hard to make sure that they are in balance.
You are self-motivated. You don’t need someone telling you what to do every day — you go out and do it for yourself.
You are comfortable taking measured risks. You are not a gambler but you do understand that careful, measured risk-taking is a part of the process. You are not afraid to jump outside your comfort zone.
You understand that you must work for what you want. Opportunities won’t always be handed to you. You have to go out and make them happen.
Related: Pay Attention To The Small Print
3How can you shed that employee mentality and think like a business owner after working for a boss for so long?
In order to be a business owner you need to:
Shed your entitlement mentality. The buck stops with you. You must take personal responsibility for everything that happens in your life.
Live a purposeful life. You must know where you are going and why it is important. You must also be willing to share this with those around you so they will buy in to your vision.
Accept that some things will not go well. There will be setbacks and challenges. You must believe in yourself enough to make it through the dark days of self-doubt.
Understand that your most precious resource is time. Nope, it’s not money like you might have thought. Patience isn’t always a virtue. When you see an opportunity, you must take advantage — don’t wait.
Be curious. Be a great listener and be willing to change based on new information.
4You must be prepared for the unexpected
While working as a corporate employee will certainly provide you with the skills needed to become a business owner, working for someone else and being your own boss are two completely different worlds.
There are a few things that come as a surprise to new business owners:
You will have to do it all. There is no longer a department for everything. You get to learn and do everything yourself.
The franchisor does not run your business for you. You do.
There will be bumps in the road. A successful business owner will make them a learning opportunity and move on.
Factors To Consider Before Signing Up As A Franchisee
Franchising is a brilliant way to get into business with not many entrepreneurial skills as it comes with a roadmap to follow for success.
You’ve been considering entrepreneurship for a while, and now that you’ve finally raised some money and been approved for a loan, you’re ready to quit your 9-5 job to run your own business. You may even already have your eye on a particular franchise, but while franchising is considered an easier and more low risk way to get into business, are you suited to being a franchisee?
“The question is not ‘is franchising right for you’, but rather, are you right for franchising? Because if you don’t have the right attitude and skill set, it can be a very expensive mistake,” says small business expert and author Steve Strauss.
Franchising may seem like an easy way into entrepreneurship, but along with an established name and proven systems, come rules, regulations and little room for creativity. If you’re not ready to become a franchisee, but want to go into business for yourself, you may find yourself struggling to operate within the system’s blueprint.
Ask yourself these three questions before proceeding with the process of franchising:
1. Will you be able to follow the directions of the franchisor?
You’re buying into an existing and proven concept so it’s safe to assume that the franchisor knows best, and so you have to be open to learning and following guidelines for business success. If, for example, you have experience in advertising and think you have an improved technique of marketing the franchise, you may want to change the advertising material provided by the franchisor – don’t.
“Being a franchisee means following the directions of the franchisor, even when you think you know a better way,” advise experts from strategic and tactical advisory firm MSA Worldwide.
“In addition to initial training, you need to be prepared to accept coaching and advice from the franchisor on how you operate or market your location.”
2. Do you have the need to experiment?
Lou Groen may have had success in launching a new menu item that McDonald’s approved of in 1962, but not all franchisees are that lucky. Stick to the plan and limit deviations to the menu or anything that involves the customer experience.
If the franchisor’s concept doesn’t involve deliveries, offering them to your customers may cause issues for others within the franchise system. “If it’s not part of the franchisor’s concept, you’re deviating from the concept and therefore, no longer running your store as a franchise,” according to MSA. Franchising arguably limits innovation opportunities, so if you’re prone to implementing creative ideas and evolving business offerings based on said ideas, rather start your own independent business.
3. Are you a team player?
These first two questions you address should already lead to the realisation that everything you do affects everyone in the franchise chain. One bad experience at your establishment and suddenly, all the stores are affected by bad press or unsavoury social media attention.
“Other franchisees are relying upon you to offer to the consumer a consistent level of service, product quality, and brand message. You are going to have to work with others in the system in making decisions,” advise experts.
Remember that as part of a chain of other business owners, you may have to accept that majority rules when it comes to decisions where franchises do have a say.
3 Ways You Can Innovate And Improve As A Franchisee
Although your role as a franchisee isn’t really to innovate, there’s room for creativity if you go about it the right way.
When you signed on the dotted line after reading and agreeing with the franchise agreement, you knew that you were buying into a proven system where everything has already been thought out for you, and all you have to do is follow the formula for success.
But you’re a franchisee longing to put your own imprint on your business, and it may be frustrating to feel boxed in by a formula, while you’re bursting with new ideas.
“Franchising, by its nature, discourages innovation on the part of franchisees, who are required by their franchisors to follow very specific policies and procedures on exactly what they will sell, how they will make or deliver it,” notes Randy Myers, contributing editor for CFO and Corporate Board Member magazines.
This doesn’t mean your ideas will never see the light of day though. But before you approach your franchisor with your brilliant insight, consider the following steps that may well lead you down an innovative path:
1. Get the basics right first
Franchisors know that customers like consistency as it makes them comfortable and trust every location of their franchise they choose to visit. But, even the strictest franchisors get hungry for new ideas. It’s the timing that’s vital for your idea to even be considered.
“Most good systems don’t want new franchisees to even think about innovations until they learn the existing system inside out and prove that they can execute it like a star,” said Jeff Elgin, CEO of FranChoice, a network of franchise referral consultants. “At that point, they have become successful, their base is secure, and they have earned the right to consider innovations.”
It’s wise to ensure you’ve learned your franchisor’s existing business model before you suggest any improvements.
2. Do your homework
So, you’re doing well and you’re sure your idea will be welcomed as a crucial innovation to the franchise system – but research your proposal, suggests Kim Stevens, VP of Regional Development and Director of Franchise Awarding at Woodhouse Day Spas. “Especially if you’re suggesting something that would impact all franchisees, create a business plan before approaching your franchisor,’ she says.
It’s also good to have another look at the franchisor’s policy for accepting new ideas to ensure you’re prepared for tough questions before you propose your idea.
3. Speak to the right people
Elgin recommends you first identify the person at the franchisor’s head office who’s responsible for receiving new ideas. “Many of the ideas a franchisee comes up with will already have been proposed by another franchisee,” notes Elgin.
To avoid wasting your time, no matter how great you think the idea is, present it as early as possible before spending anything developing the idea.
3 Pricing Tactics To Recession-Proof Your Franchise
As consumers tighten their belts, how can you ensure your franchise is their first choice in the midst of strict budgeting and curbing of spending?
Whether or not there is a dip in the economy, you have stock on shelf you need to sell. But, if consumers are cash-strapped, you have to make every effort to ensure that your franchisees aren’t running at a loss.
“There’s no doubt that shoppers are more discerning about what they need and how they shop. However, quality remains significant and brands that continue to delight their customers will reap the benefit of being chosen,” says Ailsa Wingfield, executive director marketing and communications: Africa, at Nielsen.
Why not give customers the best of both – value for money at a competitive price – by applying one or more of the following pricing tactics in tough economic times:
1. Consider a greater focus on your house brand
“The days of in-house retail brands being treated with a fair amount of disdain by South African consumers have come to an end,” says Wingfield.
The global performance management company’s research has found that R38.4 billion of the amount consumers spend at hypermarket and supermarket tills – or R10 out of every R50 – is spent on private label products. South African consumers are beginning to feel that the quality of these house brand products is as good as that of established name brands.
Since research indicates consumers are further likely to shift between branded products and retailer private label offerings, it would be of benefit to your franchise if your in-house products are perceived as viable value alternatives of similar or better quality.
2. Sell products in bundles
This the method combining various products and selling them together as one bundle for a lot less than if they were being sold separately. This method is great for moving items that might be selling slower but also great for achieving a higher value perception in the minds of consumers.
CEO of GuruShots, Gilon Miller, says there are several bundling techniques you could apply, including:
- Pure bundling, where you offer a group of products that are only available as a bundle and aren’t sold separately.
- Mixed bundling, where you offer products that are sold both as bundles and as individual units.
- New- or lesser-product bundle, where you bundle a successful product with a newer or less successful product – the stronger product will help the other product find its way into a new market.
Bundling results in cost efficiency, more competitive pricing and might also encourage customers to regard a single store as a source for several solutions.
Related: How To Recession-Proof Your Business
3. Add even more value
When you price your product in alignment with the value your customer sees in it, you’re preventing both you and your customer from the possibility of losing out on value.
Calculating your optimum price, involves asking yourself these questions:
- Will your customers save money or time by using your product or service?
- Is your product or service is unique?
- Will your product or service help customers gain a competitive advantage?
- What does the competition charges?
“Value-based pricing ensures that your customers feel happy paying your price for the value they’re getting,” says Patrick Campbell, co-founder and CEO of Price Intelligently. “Pricing according to the value your customer sees in your product prevents you from short-changing yourself while creating an experience for customers that’s most aligned.”
The more value your customers see in your product, the more they will be willing to pay for it, ultimately improving your bottom line. When your pricing is reasonable, they won’t need much convincing to make the purchase at your franchise instead of your competitor’s.
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