Monday, November 29, 2010

Have It Both Ways

Enjoy the security of your regular job while getting your franchise off the ground.

Moving from employee to business owner doesn’t have to be an all-or-nothing proposition. You can straddle the worlds of “working’ for the man” and business ownership till you are ready to take the final leap into the role of full-time franchisee.

I’m often asked: “What are some of the best businesses, or types of businesses, to own where you can be a passive investor as opposed to an active employee?”

This question usually stems from someone’s desire to transition slowly out of their full-time job and into full-time small business ownership so they can continue receiving a regular paycheck while building their franchise.

Although many people consider a passive investor to be an absentee owner, in the franchising world, that’s rarely the case. In fact, for your business to succeed, you must be involved. So, instead, think of “passive” as “less than full-time involvement“ or “less than full-time employment” in a franchise.

Since few people are willing to leave a solid job to start a franchise, “transition franchising” (did I just coin a new phrase?) is becoming increasingly popular. Many are sizing up the future, getting their spouses or family members involved in a new venture, working nights and weekends, sometimes hiring help… and launching small businesses step by careful step.

Franchisors are responding to the public’s wish to tiptoe cautiously into the franchising pool. For example, at NextBigFranchise, a number of franchise opportunities are available that allow entrepreneurs to start with one unit, two, or three units, and slowly transition out of their current positions while working a recommended 15 hours per week for each location. For example, if you get two locations up and running, you’ll be working 30 hours or so per week on your business. So, unless you’re a true workaholic, you’ll soon want to transition out of your original job into full-time franchising … or move a cot into your office!

The key to making transition franchising work is to choose the right type of business. In general terms, service businesses don’t make good passive businesses; retail operations are usually a much better choice. You can pull together financing, hire a part-time manager, bring on part-time staff, run the show at night and on the weekends … and over time build up a thriving business. This way, when the time is right, you’ll feel comfortable tossing away your employee nametag and donning the royal robes of full-time business owner.

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