One of the things that keeps people from taking the plunge into business ownership is a fear of insecurity. If you work for someone else, they figure, you just go to work and pick up a paycheck — you can feel secure about your future.
Really? 8.7 million jobs were lost in the 2007-2009 recession, often called The Great Recession. More than 8.7 million jobs have been gained since then, but it took many years, and there are still some people who lost their jobs and remained on the sidelines, discouraged by their job searches or unable to find a new job that would replace their old salaries. Unemployment currently stands at 5.9% according to the Bureau of Labor Statistics, and that’s certainly a big improvement, but there are still 9.3 million unemployed workers in the United States.
How secure are jobs now, when we’re not facing a recession? It’s hard to say; people leave jobs for many reasons and many people are hired each month, but the Bureau of Labor Statistics reports 1.6 million layoffs and firings in August of 2014. A total of 4.4 million people lost their jobs, including those who quit their jobs voluntarily, in the same month. Of the people who quit, some happily left their jobs to go to a better job, to start a family, or to follow a dream… but others quit because the job became intolerable.
In other words, no matter what happens to the economy, millions of people will lose or leave their jobs every month. Getting a paycheck signed by someone else is no guarantee of security.
Owning your own business is also no guarantee of security.
Businesses, including franchise businesses, can fail. Check out a few popular lists of reasons for failure and these are the ones you’ll find:
- A bad plan. Lots of start ups are based on the entrepreneur’s desire to do something, not on actual consumer demand. Others are designed with flaws that make successful execution almost impossible, or don’t really have a plan at all. Franchise businesses don’t face these problems as often as independent start-ups, which is one reason that they can have better success numbers.
- Too little capital. If you have to scrape together just barely enough to meet the franchise requirements, you may not make it. That’s because costs can sometimes come before revenue, and cutting things to close can make it hard to stay afloat through difficult times. Fortunately, there are franchise business opportunities at all levels of investment, so you can make sure to choose an option that really works for you.
- Poor management. It’s possible to have a good plan and sufficient money and still make enough bad decisions to hurt your business. Again, a franchise can help. If you know that you don’t have much experience with management, though, you should make sure to choose an option that provides support and training rather than one that specifies a preference for people with management experience.
- Bad location. Investopedia updates this one by pointing out that your internet presence is now just as important as your physical presence, and “No website” is a popular item on those lists. Many franchisors will help you identify a great location and also give you a website or a page at the corporate website. A surprising number of franchisees don’t take advantage of online marketing opportunities, though. That’s a quick way to shoot yourself in the foot.
- Expanding too fast. This last reason is a bit ironic — succeeding too quickly can make you fail? It’s true, though. Opening a second location or adding a second franchise business is a great move — but only if you’re ready.
In many ways, owning your own business gives you more security, because you have the chance to make your own decisions.