Giving up the corporate life to become your own boss
Advice on franchising by Pieter Scholtz,
Master Licensee for ActionCOACH SA. ActionCOACH is one of the fastest growing
and most successful business coaching franchises in the world today.
Right now there are many
corporate executives perched in high rise buildings contemplating a career
change. They have spent many years ladder-stepping their way to the top,
learning the art of good governance, management, risk and reward, but in their
heart of hearts there is a (secret) desire to go it alone. I know this because
I was once in this position.
With years of executive management
learnings tucked neatly under my belt, I decided to resign from the board level
I had reached and relinquish my guaranteed monthly paycheque to be my own boss.
Because
I didn’t want the growing pains of starting a business from scratch, buying
into a tried and tested franchise brand seemed the logical way to go. Already
in my mid-forties, as is the case for most executive level corporate defectors,
time was not on my side.
With approximately 500 different
franchises available in South Africa, I learnt that service sector is the
fastest growing, resulting from the trend towards outsourcing non-core business
processes. This interested me as I did not want my long-earned executive expertise to go to waste in a
business that flipped hamburgers. I wanted a ‘white collar’ business to sink my
teeth into. So off I went in search of an intellectual type franchise that also
offered low start-up costs.
The
business and executive coaching industry was my big find. According to Harvard
Business School, it’s recognised as the world’s fastest growing industry behind
information technology and is worth approximately $1-billion in the States annually.
Based on my past experience, I knew I was qualified for the job of business
coaching and the same is true for most corporate executives.
Next, I did the math. With 1,5 million registered
businesses in South Africa, growing at 20 percent per annum, I figured that
conservatively the industry would be worth an annual spend of approximately R1-billion
in five to seven years. Of that total number of businesses, 97 percent are
small to medium-sized companies and statistically we know that at least 80 percent of businesses
fail within the first five years; in truth only 40 percent of start-ups are
still trading after the first year. So it was safe to say that most companies
experience either start-up or growing pains at some point. It didn’t take long to realize that the
opportunities and growth for trained business coaches was extremely high.
I
knew I wasn’t about to spend years developing my own business coaching methodology,
so I went in search of a business coaching franchise. I found the franchise operation
I was looking for and if you really want to be your own boss, so will you.
Below
I answer some frequently asked questions facing executives who want to make the
leap to independence.
What are the benefits of going the franchise route?
Firstly, you are licensed to
work under a unique and instantly recognizable brand with a sustainable product
or service that also has an established track record. Secondary to that is the
constant sharing of learnings and experienced leadership, often from a global
perspective.
How do I choose the right franchise?
One of the challenges facing a
potential franchisee is choosing the right franchise to match their skills. As
I said earlier, if you have reached an executive level in a corporate
environment, selling fried chicken is probably not going to be intellectually stimulating.
How do I secure start-up funding?
Successfully borrowing from the
banks will depend on the strength of your balance sheet, your ability to
provide collateral and your track record. The banks also look at the franchise/franchisee
suitability and often the level of training being offered by the franchisor.
What are the start-up costs involved in franchising?
On this point I can only speak as
to a business coaching franchise. The infrastructure costs are minimal,
especially as most business coaches prefer to work from home or share
offices.
Please explain franchise royalties.
A franchise is a licensed
privilege to the concept of a licensor who has invested copious time and financial
resources into building a brand and researching and developing a product or
service that will stand the test of time, while also enduring the risks
associated with such a venture. The benefits of buying into an established
brand are so great that no franchisee should consider royalties, also known by
the more politically correct term of ‘management services fees’, a grudge expense.
Royalty payments are an essential part of any sustainable franchise model and can
be a fixed monthly amount or may be calculated as a percentage of turnover. While
the benefits of associating with such a brand are numerous, one that stands out
is the fast-track to a break-even point.
For a complimentary business
health check from ActionCOACH and SA Franchise Warehouse, visit www.actioncoachsa.co.za/safw
086 122 6224
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