So you want to start a business? Should you go solo or hook up with a great franchise?
I always have people calling me and asking me for advice about how to start a fitness business, or other businesses. They want to know where to go and what to do. They also want to be their own boss and become financially free while doing something they love.
Many people who reach out wonder if they should launch into their own solo venture, or whether a franchise offers a better opportunity. I tell them there are benefits and challenges to both and which is right depends on their personality and goals, but ultimately the franchise route offers a faster and more reliable way to the success and financial freedom they want.
Going it solo
Starting out on your own to build a business from the ground up is an exciting adventure. You get to be 100 percent boss with the freedom to put your vision into the business from day one. You also get total control over your products and services, operating processes, and take home all of the profits your business makes.
But as someone who has built a business from the ground up, let me tell you that it can take a while to see those profits. I’ve been at this for nine years and I can’t even count how many times I looked at my bank account and felt queasy in my stomach. When you start a business from the ground up, you will lose sleep, work long hours and end up paying yourself last.
In the first few years after I decided to start a fitness business, I would show up first thing in the morning to open up studio and I didn’t know if people were even going to show up. I would be coming in at five in the morning to do childcare and closing the doors at the end of the day. It takes a long time to build your brand, develop a consistent cash flow, and recruit amazing staff. It’s not easy!
And when you go it on your own, the odds are against you when it comes to success. Approximately 80 percent of new businesses go under in the first year. And of those that make it through the first year, another 50 percent will fail in the first five years. That’s only 10 percent of businesses that make it through to five years of operations! Most businesses also don’t see consistent revenue for the first five years. So you have people who have this vision and they’re all excited about opening a business, but at the end of the day a lot of them have just created a job for themselves. The stats are against them.
As you can see, building your own business from the bottom floor is not for the faint of heart. But if you’ve got the drive and are willing to stick it out to make your unique vision a reality, it could be for you.
The franchise formula
For those who don’t mind following some directions on the path to business ownership and financial freedom, a franchise could be the way to go.
Successful franchises are built on formulas that have been proven to work by people who have invested a lot of time, energy and money into their business models. In the case of oranj, we ran our Kelowna studio successfully for three years but we needed to prove it again in another market. So we opened another studio in Fort McMurray and were once again successful. I calculated the trial and error investment for proving our concept and it amounts to $2 million. A $2-million investment just to prove the concept was successful! Wowzers!
When you buy a franchise, you have a proven model along with someone who can hold your hand to make sure you won’t fail. You get to learn from their mistakes and capitalize on their wins. And you’ll start out with all the tools you need to succeed: brand awareness, proven staff training procedures, a detailed marketing plan, bulk buying power and more.
That said, deciding to go with a franchise does have its strings attached. You will have to pay franchise fees, follow a certain set of rules set out by the company, and also have the cash to buy the franchise and pay for the associated startup costs.
So before buying a franchise, it’s important to look at the requirements and ask yourself some questions to make sure it will work for you. Do I pay flat fees or are they based on a percentage of profit? How much freedom to I have to put my own vision into the business and tailor it to my community? Do I have access to the capital needed for startup?
You should also look at your five and 10 years goals. Look inside and ask what you stand for as a business owner. You are going to be living and breathing this for months and years to come. What kind of hours are you willing to work, where do you live and what kind of capital output can you manage?
The oranj example
At oranj we charge flat franchise fees. So if you’re working your butt off, you can reap the profits. We also based our model on lululemon’s, which places our managers as experts on their communities. They get to decide what kinds of events and classes they are running. It adds a very local feel to each of our franchises.
And we also operate with a “Triple P” bottom line – people, planet and profit. We want to be financially profitable but also make a difference in the world. That’s why we’re 100 percent vegan; we reduce, reuse and recycle, hire locally, reduce our carbon footprint and make sure all our staff are empowered and happy.
Venturing out into business ownership, in particular when you’re spending a lot of money to buy and start a franchise, is a major undertaking and not something you should launch into without plenty of self-reflection and research. So whether you choose to go solo or buy into a successful franchise, be sure to do your homework and most importantly, go with your gut!
For more details on franchising check out http://www.oranjfitness.com/franchise/