So last month we looked at the way you see money and how you can start asking for more ways to ‘attract it’. Now I know many people have read or seen ‘The Secret’ so they started listing things down and automatically expected things to ‘arrive’. Now in some cases this does actually work!
For many of us their has to be some effort and work that goes in. This month I would like you to start thinking about your bigger financial plan and how you are going to achieve it! Do you have a monthly or annual figure you would like to live on? Have you spent anytime thinking about it recently?
Once we are more focused and clear about what we want in life, the opportunities, knowledge and people start to show up. From a financial point of view you need to look the vehicles that you can use to increase your wealth. Next month we will look at your 2010 approach to where you are now, what you need to do and an action plan to get there.
This month one of the key paths to wealth is owning a business. When looking at the wealthiest individuals in the world today. The majority of them became wealthy by creating companies and investing the profits into wise money making vehicles – real estate being a popular one! So this month we are going to take a brief look at how you would think about a business if you don’t already have one. If you do have a business, some of the questions below relating to looking at a franchise may also be applied to your current business. We work with clients who have existing businesses and many, particularly working in corporate roles who wish to cross over into creating their own business. This could be running it themselves or in partnership or even ‘buying’ a business to oversee but not necessarily be ‘working in’.
The higher proportion of clients want to work for themselves, to be masters of their own destiny, create a company with their own values, personality and with high financial rewards!
This was me many years ago when I left corporate to start on my own. There comes a point where – even though you are enjoying the salary and the security of your company – something is driving you to be your own boss.
One thing that inspired me was a fantastic book by Robert Kiyosaki called ‘Rich Dad Poor Dad’ that caused me to look at money and wealth differently, particularly how you can MAKE MONEY WORK FOR YOU RATHER THAN WORK FOR MONEY! So I looked at the larger financial picture and how I could use a business to leverage my financial base and start investing in other vehicles that would generate more wealth.
For those that are considering business but may find it all a bit daunting, Franchising is a possible option. Many of our clients are female and they are drawn to franchise products and services with the option of support and systems.
When you are considering business you need to look at it with ‘financial eyes’ as well as with your heart. Why do you want a business? Is it so you can live life the way you want to and have more freedom? Is it because you want more time at home without commuting? What are your motivations? Are you prepared to deal with the challenges as well as the benefits of being an entrepreneur/business owner.
As mentioned in Rich Dad – once you start your own company or franchise you must be clear about your exit plan and how you will use your profits to invest in other wealth generating assets. Our favourite has been property, however other successful clients have also taken up trading on the stock market and internet marketing. Naturally there is always work to do at the front end but many of these schemes provide ongoing residual income if constructed efficiently.
One of my ex-clients owned an effective headhunting franchise and in 10 years earned enough and invested his profits into an excellent wealth generating asset – property, and is now living quite a comfortable, relaxed lifestyle overseas without having to work. For those of you looking at franchises here is an email I sent recently in order to give you a good overview of how you may want to approach your franchise decision.
“Hi there. just got back from overseas again!! You asked me for an overview of franchising as I know it so here it goes. Franchising is fantastic if if its the right organisation with the right support and offers real returns for your efforts. I was part of a recruitment franchise business that was £35k, a 10 year contract and 10% fees, as much training as you wanted and great support from head office. I just visited one of my ex -clients overseas and he has done exceptionally well out of franchising and investing in property. He can chose to work now and achieved this within 8 years. A couple of others sold their businesses around 3 years ago for substantial sums. Conversely there were also cases that were not so good it depends on your plan and your input! So anything is possible if you’re clear on your plan and how hard you may need to work!
Re choosing the right franchise:
I would undertake as much due diligence as possible and look at how much time and effort it will take to get the cash in. What do the other franchise owners say – interview successful and non-successful (randomly find your franchise owners from your potential company without head office pointers so its a balanced view)
List your reasons as to WHY a franchise is absolutely necessary – how complicated are the systems to create yourself? How quickly can you get started, how often will you need head office support? What are their finances like? What is their track record? How many trainings do they have a year? Do they focus on client acquisition or assist you with it? How much do they help with accounting, finance, marketing sales? Do they have any recommended 3rd party suppliers with discounts? Do they offer any group/franchise discount on products/systems/services that you will need? Do they provide existing contacts for you to get started?
To me franchises are the launching pad to get you going and its great to get to know other franchise owners and compare notes. However once you understand the systems everything else is down to you and your business development, customer service and running the ‘systems’ as smoothly as possible so you don’t spend all your time doing admin instead of BUSINESS DEVELOPMENT & DELIVERY. If you’re the kind of person that likes a framework, systems and need that extra motivation/support from head office, franchising could be good for you.
For those that already have a business mind and like free wheeling and creating their own systems and not willing to pay the franchise fees or commissions, starting without a franchise may also work for you. Franchise fees range from the very low thousands of pounds up to hundreds of 1000’s of pound so you need to be 100% sure you are INTERESTED and PASSIONATE about the product or service, that you have a clear idea of what existing franchises think and have experienced from ‘head office’ as well as what ‘target sales figures are realistic and achievable. Also what the amount of effort, time & investment is versus the FINANCIAL RETURN – this is KEY and is sometimes overlooked! A basic business plan will show you the key data that will assist predictions and create your action plan. As we advice with any business venture – due diligence, due diligence, due diligence! Good luck.”
Remember, a franchise or stand alone business is just one way to wealth. As mentioned above there are various paths to financial freedom depending on your personality, creativity and risk tolerance. The more passionate you are about your ‘vehicle to wealth’ the easier it will be for you. Many of us want the ‘get rich quick way’ and in some cases for a handful of individuals this is possible. However on talking to countless millionaires I have worked with – they all worked intensely in the beginning, they put in the hours, they remained true to their vision and there were various challenges and sacrifices. Once they get to that financial freedom level, they love what they do so much, they just continue and many go on to teach people like you and me their secrets! So watch this space for next months instalment and in the meantime, start thinking about what you would REALLY like from 2010 from a new wealth perspective!
Have a fantastic Christmas and see you in the New Year.