So why is it that an incredible 64% of the Canadian population have a desire to work for themselves but haven’t made the leap? There are several reasons why this could be the case:
- Lack of funds to start the business
- Fear of losing the consistent paycheque
- The unknown of business ownership
- Lack of confidence in their ability perform (fear of failure)
- A family network that is less supportive of this approach
- A lack of clarity as to the exact steps to take to become their own boss
- Apathy – the idea that they want to do it but lack the enthusiasm or desire to pursue
I can’t really help on the last point on this list and would suggest that they will be those that perhaps should remain employed by someone else. I will however cover many of the other topics in this article and upcoming articles in Elite Franchise Canada.
How to financially prepare to become a franchisee?
There are four very specific yet interconnected strategies that you need to execute to financially prepare.
Have the unencumbered cash required and know where you are accessing those funds from
Every business will have a different requirement, and your franchisor can provide you with that number but they are also found on many franchise websites. Having this amount accessible will have you prepared, in the right frame of mind and ready to proceed to the next step. If you are unfamiliar with the term, don’t worry. It simply refers to the funds that you have available to invest (line of credit on home equity, personal savings, cash on hand or a family gift of funds).
Ensure you can live for a period of time without an income
This sounds scary but really it isn’t. Having funds available for your minimum living requirements allows you to focus on the business build rather than your day to day living expenses. An important note here is that you don’t need to have the amount that you normally live on but rather the minimum required expense amount. Typically, you would want a minimum of 3 months but may require more. You won’t be spending the same amounts each month as you build your business (less dinners out / less travel etc) which is why you need to assess your requirements.
Understand the journey and this small “blip” in your financial situation
Opening a business is like farming for your income rather than hunting for it. Don’t worry about the short-term impact to your financials but rather about how this will be an investment in your future. When you open a business and step away from a lucrative career to do so, you are not looking at the short-term impact on your bank account. Reconciling this before you start down the path will help you with your process and will make the journey that much more enjoyable.
Be strategic on your timing and your plan
Time is money and money is money. Spending less time and less money to launch your business will speed up the time it takes for it to start returning income to you. When you are very purposeful with your approach, preparing in advance with business plans, setting up your incorporation, preparing for franchisee training and aligning your resignation or departure from work will all support a better plan for building the business and as a result, will waste less valuable time.
The journey that includes becoming self-employed or a business owner is an exciting one. The stress that you will have can be a healthy stress rather than an unhealthy one. You will be in control of your destiny, your schedule, your career, your income level and ultimately, your life. Control over your life is one of the major drivers to those looking to become a business owner. Planning for the financial component just makes that much more achievable.
