Setting Goals for Franchise Success
Before you research any franchises, you should set three- and five-year goals. Goals must be both financial and “quality of life” (or non-financial) in nature. Financial goals should take into account cash flow, savings, net worth, equity build-up and spendable income. Quality of life goals should consider lifestyle issues that are important to you, like having dinner at home three nights a week, being able to take vacations, attend soccer games, make a difference in the community, and so on.
Don’t overlook quality of life goals or you’re setting yourself up for dissatisfaction. Quality of life goals are more important that financial goals. Why? Because many people who invest in a franchise have already made a decent living in the past. Aside from earning a paycheck however, they couldn’t find a compelling reason to go to work in the morning. Money alone wasn’t enough to keep them going, and money will not hold your interest long either. While you will have some minimum threshold of earnings which you won’t dare to venture below, once that threshold is exceeded, you will find that quality of life becomes the driver.
Virtually all franchisors have key performance criteria that help you and the franchisor determine whether or not your business is winning. You will be taught how to track sales, labor costs, cost of sales, and other statistical measures. Franchisors design their business and support systems to help you structure your business to achieve these measures and monitor results.
However, we know of no franchisor who measures how many means you’ve eaten with your children or how many of the kids’ soccer games you’ve attended. Franchisors measure your success by their definition, not yours. Most franchisors have no clue as to whether or not their “successful” franchisees are living the life they originally desired when they invested in a franchise. Franchisors follow the money. And as we’ve already stated, money won’t hold your interest long.
Additionally, in order to secure SBA loans, bank financing, financial support from your family, or other forms of financing, chances are you will need to write and submit a business plan or cash-flow projections to the parties from whom you’re seeking financing. In your plan you will detail the tactics and strategies you will execute to drive the sales, contain the costs, maximize the cash flow of your business, and repay your loan. To succeed in business, you have to generate money.
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