1. A problem I would like to discuss is the difficulty of becoming a business owner due to the cash needed up front.
2. There are many reasons to why someone would want to start a business. And there are many ways to get the cash up front, bearing huge financial risks. I believe buying a franchise will little to no money up front should be possible for the average person. Franchises allow someone to start a business under an existing company's name. For example, there are many franchise companies today, such as Great Clips, McDonald's, Anytime Fitness, and many more who are not purely owned by their corporate parent. I'm willing to place a bet that each of these franchises cost at least 100,000 in cash before anything happens.
The Who: Americans dedicated to becoming business owners
The What: Franchising?
The Why: People should have the ability to begin a business before bearing financial risk and owning a franchise allows me to profit off an existing companies structure and reputation while being able to modify the rules to a certain degree and the benefit to reaping profits.
3.
Testing the who: There are many people who share the need of becoming a business owner. Not all people share this need equally.
Testing the what: There would be many boundaries to the need. For example, corporate regulations would be a huge boundary. By owning a franchise, you operate independently but also must follow corporate regulations and guidelines. For independent businesses, some people may be unqualified to take such risks.
Testing the why: The why is tied to people who do not want to work for corporate giants or may not have education/network needed to begin a job somewhere else. Many people have a passion for becoming businesses owners but lack of capital to make it a reality.
4.
For my first interview, I was able to speak with someone who owns a franchise of a restaurant chain. The first thing I realized, is that when you start a franchise, it becomes a full-time job. I was expecting the franchising practice to be more of a "front the money and hire people to run the store" kind of deal. This particular person has run a Zaxby's franchise chain and has had the opportunity to open 10 stores. I learned that operating a franchise means that you can become distant from the corporate regulations but they can hold jurisdiction over your stores if needed.
My next few interviews showed me that taking ownership of a new business or franchise is a huge financial risk. I had the belief that starting a franchise for say, 250,000, would be the steepest part of the risk. But, on the other hand, pandemics, natural disasters and other things can happen years from getting the franchise off the ground. There is a larger financial risk in the short term, but the business could fail at any time.
5. Given my opportunity and the reflection on my interviews, I realized that beginning a business can start on a small scale, which many people can afford. Whilst many people are unable to get business loans or even have the skills to run a business, it is more possible than many people think.
Hi Walter! I really enjoyed your assignment, as a child of entrepreneurs this peaked my interest. Honestly, I never asked how much it was to start their company, this gave me much knowledge because in today's world I also thought it would insanely expensive. But as you said starting at a small scale is much more obtainable, I can't wait to see where this goes!
ReplyDeleteHey Walter,
ReplyDeleteYou bring up a very good point in your hypothesis, the fact that needing that initial amount of money is essential for starting a business. I like how after your interviews, you reanalyzed your thoughts and concluded that starting a business is more possible than you initially thought. Like other students, you utilized information from people with experience in order to understand the financial costs of a company.
I would have never thought of this as an opportunity, I think I see that you maybe wanted to start a business but couldn’t because of paying up front. I think you need to pay up front, though, for safety reasons. I wish before listing the who, the what, and the why that you put your hypothesis in just one sentence. I wish you wrote down your notes for every interview so we could hear from others on this opportunity.
ReplyDeleteHi Walter,
ReplyDeleteThrough reading your post, I realized there is much about opening franchise businesses that I did not know before, most specifically, that their full-time job remains operating the store. Similar to your misconception, I also believed franchisees functioned more like investors. Did the interviewee comment on how he was able to transition this work and balance another 9 store fronts? I am also curious if this is a pattern specifically with franchise restaurants or if it remains pretty typical of other industries as well.