One year ago I opened a franchise. Here are some of the lessons I have learned along the way.

 

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One year ago I opened a franchise. Here are some of the lessons I have learned along the way.

Disclaimer, this is not a self promo for my business, as you will see, my business is very dependent on location and I only wish to share my experience. I’m happy to answer any questions. I’d rather not say exactly what franchise I own (again, not promoting) but I can answer any questions you might have. As of right now, our revenue for the year sits at $955,000 which is well beyond my expectations.

Why and how I got into a franchise ownership is a very long story. In short, I was unhappy working for someone else so I decided to work for myself. I always wanted to open a business, but never had that great idea nor did I ever feel confident enough to risk my life savings and my family’s well being on a unproven idea. I wasn’t really looking for a franchise, but it just kinda happened (another long story) I vetted several franchise opportunities and found one that really resonated with my abilities and interests. I now own a residential construction franchise.

Here is what I have learned since our launch in January.

1. Be prepared to work, a lot. No seriously, this isn’t for the faint of heart, nor the lazy. Most weeks I put in 80-90+ hours. I’m lucky to finish up by 10pm most nights. Your business will likely own you and all your time for the foreseeable future if you want to be successful.

2. If you have a family make sure they know what’s in store. Your time commitment will vary by franchise, but talk to other franchise owners to really determine if you and your family can handle the work/life balance. My wife and myself were prepared as can be, but it has certainly created some tense moments despite knowing what was in store. That being said, construction has exploded since COVID and has made everything that much better (business/sales) and that much worse (time investment).

3. Bring more than enough money to the table, and pay yourself as little as possible at first. You will probably not be able to replace your income in the first year. If you were making a decent salary before opening a business, you probably aren’t going to match that (in year one). Be prepared financially to pay yourself as little as possible in the first year. Keep your profits invested in the business until you have enough p&l data to verify your business performance.

4. Don’t skimp on marketing. Especially if you are opening a franchise that is new to your area. We market directly to individual homeowners. Very intentional and very targeted to our ideal demo. Print, online, ppc, seo, social, you name it. We’re everywhere. Our YTD marketing spend is almost $50k which is quite significant, but the investment has been well worth it. We have had our fair share of tire kickers, but the vast majority of our marketing efforts have resulted in well qualified customers reaching out to us. A lot of this goes back to the franchise your getting into bed with, their name recognition and online presence. I was tempted to step back our marketing when covid first hit, but I rode it out and never changed a thing.

5. Make sure the franchisor has a good support system in place. My franchise is very complicated and took a very long time to learn everything necessary to carry out the day to day operations and become mostly self sufficient. I relied (and continue to rely) heavily on my support team to run my business. I will eventually rely on them less and less, but I wouldn’t be here without them. Their support will provide the foundation for your business.

6. Follow their plan. You may be Mr. King Shit salesperson, or know everything there is to know about how to run a business, but part of what you are paying for (franchise) other than the name brand, is their knowledge and proven system. They would not have become a successful franchise system without successful practices in place. They know how to market and sell their business. Put you pride in your pocket, and listen. It’d probably be best to do what they tell you to do. There is always going to be room for interpretation and tweaks here and there. But you should follow the core principles they lay out for you.

7. Differentiate yourself. What makes your business better than the other guy that operates a similar type of business? If you don’t know the answer you will likely fail. We focus on this heavily during sales calls. Most of which is subliminal (we explain what makes us different as well) but we tend to leave an impression.

8. You are going to screw up and it’s OK when you do. Let’s just say I had one job where just about everything went wrong. I chose the wrong people to do the work and it bit me in the ass. Three different disciplines, and I chose wrong each time. They ended up costing me thousands of dollars, and a bunch of frustration and extra work. But we made it through and never gave up. Mistakes were made, but we learned from them, and they will never be repeated.

9. You don’t need to be an expert to open a franchise. I originally thought this was a bit strange. I had zero real world construction experience before purchasing a construction franchise. Nor did I have any real sales experience. But real world “on the job” experience is just a small part of owning a business. This is where training and the support system come into play. I trained everyday in person for three weeks straight, and several weeks before in person training. If the franchisor awards you a franchise it means they believe in you, and expect you to be successful. You don’t need to be an expert, there’s so much more that goes into it other than industry experience. If you suck, the franchisor doesn’t make money. They don’t just give a franchise to anyone that wants one.

10. If you feel like you need help, don’t be afraid to hire somebody. I spent so much time and energy trying to do everything myself I nearly went insane. I hired my first employee a few months ago and now wonder how I ever did it without her. She is worth every penny I pay her. Plus, you now have someone to talk to and someone (other than your significant other) that truly understands what is going on. It can be pretty lonely doing it all by yourself, having another soul to talk to can really help.

I could probably go on forever, there are a bunch of things that apply to my specific business, but I thought I’d cherry pick the most universal lessons I could share.

One year ago I opened a franchise. Here are some of the lessons I have learned along the way.

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22 Replies to “One year ago I opened a franchise. Here are some of the lessons I have learned along the way.”

  1. Don’t take this the wrong way, because I love all of your points here. However, I have a long history with powerpoint and I’m a bit obsessive about efficiency. Your list for the impatient (like me):

    1. Be prepared to work, a lot.

    2. Full family commitment/Reduced Family Time

    3. Come prepared with more capital.

    4. Don’t skimp on marketing.

    5. Vet your franchisor for solid support.

    6. Follow the franchise plan.

    7. Differentiate yourself.

    8. Quickly learn from mistakes (don’t beat yourself up)

    9. You don’t need to be an expert to open a franchise.

    10. If you feel like you need help, don’t be afraid to hire somebody.

  2. This is great. Years ago, I had a friend own a Subway Franchise. He said that the owner doesn’t make much money, and he has to pay his employees even less, but the goal is to own several, as it allows you to better distribute the losses and gains and gives you a better overall year over year outcome. He said, as you said, you have to literally work 80+ hours a week til you can find people to manage for you (which is hard because they steal).

    Now, there was a person about a year ago who did a write up on opening a McDonalds Franchise and he said in 5 years he was a milionaire and he said the entire process was incredible. He said he did have to go to community college for some kind of business degree (I think he got a bachelors as part of the ownership) but he said it was great and he got very wealthy very quickly.

    Thanks again for the post.

  3. I think the family impact is what gets a lot of people by surprise. Starting a business sounds great, until the wife realizes how much work it is and how you’re never home or going to little Johnnys baseball game. Lots of divorces from it. Success requires sacrifices.

  4. That’s a really well tabulated brief list of learning. Thank you for sharing these.

    What sector is this franchise in?
    What kind of consultation / research did you indulge in and what were the known big risks (besides the obvious) that you were aware of.. and what new ones did you uncover along the journey?

  5. Appreciate the ‘universal lessons,’ have a couple specific questions:

    5 year revenue projections?

    Did you ‘luck out’ with COVID and the construction industry boom, or was it in line with expectations? As in, how are you expecting that to carry forward?

    How did you finance the franchise? Did you have a ‘war chest’ built up or did you mainly finance through debt?

    What was your plan if it failed?

    What made you fall on a construction franchise instead of, say, any other type?

    Did you independently find the franchise or did you work through someone (a ‘contact’)?

    Did you consider the opportunity cost from giving up further advancement in your field vs. profit from the business? (obviously factoring in freedom from having your own business, not just money!)

    Any other information other than ‘residential construction’?

  6. Does buisness require 80 hours a week when you want to just life comfortably and not to buy new Continental GT every year?

  7. Love it. Study entrepreneurial science but don’t know anything about franchises. Very informative.

  8. I learned a couple of these lessons as a part of the I9 Sports franchise model.

    Really good stuff, sir. Congratulations!

  9. My question is could you have done without the franchise and are they worth the cut off your profits now that you’ve been in it a bit?

  10. Do you mind telling me what was your starting budget for opening your franchise?

    And what would you best say a good starting budget for a franchise or even just a businese in general to be worth your time?

  11. Can you say whether you’re in a primary, secondary, or tertiary market? I’ve worked in a marketing capacity with some franchises who were doing big money in primary markets but their marketing plan essentially came down to “do a lot of Google Ads” and found that in a secondary/tertiary market, that wasn’t a successful plan. I pushed the franchise I was working with to use their marketing dollars more broadly but their franchise was against it. What to do when push comes to shove?

  12. My husband and I took over a food franchise in January and we can confirm that many of these statements are so true. He expected it. I did not. The most difficult part is having young children. The best advice I can provide is do it before having children, don’t have children, or wait until they are self-supportive. Even if they are not infants like 4 or 5, you have to replace too much work for their education. We had our children in a very nice, regular priced child care facility (cost is still very high) and we had to pull them out. That has been the most devastating result of our entrepreneurial career so far. I cry when I look at my 4 year old and see that due to my own poor financial decision I had to pull her out of an amazing early childhood education. How do I know … my almost 6 year old is well beyond her kindergarten class.

    Essentially, don’t open a business that requires lots of time if you have young children and care about their education. I would wait until they are able to make their own decisions about life considering they did not choose to be reproduced.

  13. Owning a franchise is working for someone else. You’re putting in 90 hours a week and giving up how much to the franchisor? Not to mention you’re at their mercy

  14. Pro tip dont bang the employee bro. When you said her and she truly understands… I got concerned anyways other then that good write up ty.

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