Office Job Versus Business Ownership
The choices for students making their way into the workforce may not be as abundant as they once were a few decades ago. Entry-level positions in most corporate environments are shrinking or simply not meeting the pay expectations of graduating students. Demand has obviously exceeded supply, resulting in many highly-skilled individuals working in low-level jobs.
So how have many aspiring career-seekers reacted to these changing workforce trends? By getting further into debt and starting a business. With the right support network, strategic planning, and wise money management, entry into franchising straight out of college can give you the upper hand to achieving financial and employment success.
Finding Your Support Network
A support network requires you to find the people who can provide the motivation, signing power, mentorship, and other tools or skills required to make a smooth transition into the workforce. Since you will be lacking the practical business skills that college doesn't teach, these people will be your guides to the “real world.” More than likely, your support network will consist of parents, siblings, even other business owners that you will meet through networking.
When preparing your business plan, these people in your support network can be considered your “management team” – a resource the franchisor will be looking for. It is possible that one of these people will even be required to be your co-applicant, but may not be required to take an active interest in the business.
Strategic Planning
Strategic planning involves the research and educational process before you decide to buy and open a franchise. Learn everything there is to know about franchising because during the interview stage, the franchisor will be looking for people with industry know-how.
During the planning phase, choosing a franchise system will be your biggest challenge. Online franchise directories are a great place to start and where you can create a working list. Remember to be realistic about your expectations: look for a franchise that is right for you, one that speaks to your interests and passions. You will also need to look at your lifestyle situation and find a franchise that is suitably matched.
The planning you need to do will be different than the planning required for someone who already has a career, family, or other risk considerations. On the other hand, you will be evaluated on a different level than people with more work or business experience. A franchisor will not reject your application simply because of your age or status, but you will have to demonstrate a mature commitment to the venture you plan to undertake.
Wise Money Management
Finding the investment capital to purchase your franchise can be your greatest challenge, depending on what franchise you choose. If you’ve planned strategically, you will agree that a million dollar fast-food franchise is not in your immediate future. But, a low-cost or home-based franchise can be.
You could look to raising funds by approaching family or friends because if you’re like most college graduates, you will have tuition debts. If this is not an option, you could look to the Small Business Administration for their small business loan programs. Wise money management means that you will have a clear objective on how this money will be spent, as well as changing your existing spending habits. As a future business owner, frugality in your first few years of business is paramount.
Your personal financial situation will be assessed by the franchisor. Since many franchise systems require that you have a certain net worth to qualify, you may need to consider a silent or active partnership arrangement. In other words, a co-signer or guarantor. The good news is that your debt load will be much less than that of someone with a mortgage and other cumbersome debts that could affect franchise success. Finally, take the time to find a qualified accountant who can map out your financial requirements and expectations and give you the reassurance you need to make the right investment decisions.
