Get Ready to Open a Franchise - Part 2: The Finance Quandary |
By Dina Dwyer-Owens | chairwoman and chief executive officer, The Dwyer Group, Inc., Waco, Texas |
Published in the May / June 2013 Issue of print Search & Employ® |
Most Americans desire to become financially independent and have a career that meets their personal and professional goals – but few have the discipline required to get there.
Although 54% of adults aged 18 to 34 want to start a business, only 8% currently own one, according to a study by the Ewing Marion Kauffman Foundation (http://www.kauffman.org/uploadedfiles/millennials_study.pdf ). This means that half of the next generation are looking to entrepreneurship as a fulfilling and sustainable career choice, but have not been able to take the proverbial leap.
The number one barrier to starting a business cited by participants in the study was access to loans or credit. In today’s lending climate, business financing is available, but not to the extent that it was before the financial crisis. Increasingly, therefore, future business owners need to start planning and saving in advance to make sure that they are financially capable of securing financing and having capital available for startup costs.
Other top obstacles cited in the Kauffman study were:
- not knowing how to run a business
- not having the necessary skills or knowledge
- a lack of role models.
The training and support that a franchise provides address all of these obstacles head-on.
My father, the late Don Dwyer, Sr., founded The Dwyer Group® of franchise companies with the vision of creating a business system that would help individual entrepreneurs reach specific goals in their personal and professional lives. Part of his personal system of success was called targeting. He used to have a saying, “Goal-setting is a win/lose proposition, while targeting is a win/win proposition. Targeting provides the flexibility of more than one way to be a winner.”
If you don’t create a targeted action plan now, life will get in the way of your dreams. Here are a few tips to help you save up for opening a business or franchise.
- Describe your targets in writing. Write down your target date for opening a business and the amount of money you would like to save. Think big, but conduct research so you can set a realistic target.
- Choose a target that excites and challenges you. When you research franchise and business opportunities, look for something that you have a passion for and that will stretch and challenge you as a person.
- Visualize your targets. Do you dream of a big house or vacation for your family? Print a picture of your dream and put it somewhere where you will see it.
- Never underestimate the power of a sticky note on the mirror with some motivational words.
As chief executive officer of The Dwyer Group, one of my greatest privileges is teaching incoming franchise owners – many of whom are veterans – how to reach personal and professional goals. Already opening a business, they have surmounted the obstacle of financing and are on to their next challenges – growth and financial independence! You can read some of their stories at www.vetfran.com or www.leadingtheserviceindustry.com.
Franchise Financing Resources for 2013
Small Business Administration (SBA)
Although not technically a lender itself, the SBA is still the best place to start for new business owners seeking financing. Learn more at www.sba.gov.
Community Banks and Credit Unions
In the wake of the financial crisis, small community banks and credit unions need new customers—and they’re targeting small business owners. Don’t forget to check with local institutions in addition to the big banks.
Many franchisors offer in-house financing to help their franchisees get their business off the ground. For example, our firm, The Dwyer Group, can finance up to 70% of the franchise fee in-house. Franchisors also maintain relationships with external lenders who can help prospective franchisees through the process.
Crowdfunding is online fundraising through a large number of micro-investments, often fuelled through social media. Although still in its infancy, crowdfunding is likely to pick up momentum in the next few years. Check out www.sprigster.com, a crowdfunding portal for veterans opening franchises.
The Dwyer Group, Inc. (www.dwyergroup.com), is a holding company of seven service-based franchise organizations: Aire Serv®, Glass Doctor®, The Grounds Guys®, Mr. Appliance®, Mr. Electric®, Mr. Rooter® (Drain Doctor in the UK and Portugal), and Rainbow International®.