Home > Article > John McGavin

Blue Print for success: Section 1 Laying the groundwork

Written by : John McGavin
2007-03-15

What Does It Take to Succeed?

Do I have what it takes to succeed in business? If you have never owned a business before, it surely is a question that is on your mind. Working with thousands of prospective business owners, here are the three fundamental elements of success that we have defined. The way to maximize your chances of success is to be as close to a ten as possible in each element

Desire for greater independence

While it might sound obvious to say it, the desire to own a business is perhaps the most important element. Other words that come to mind that describe this element are drive, the desire for greater flexibility, control of one's future, financial success, independence, etc. Business ownership can be very rewarding, but it will not be easy. Someone who is satisfied working for someone else will usually find the challenges of business ownership too great to even attempt.

On the other hand, there are many stories of people who succeed against all odds because they have a strong desire to have their own business. So ask yourself this question: On a scale of one to ten, with ten being high, how do I rate my desire for greater independence? The higher your number, the better your odds of success.

This element is the one you must bring to the table.

If you don't have it, nobody can give it to you!

Business system

According to Robert T. Kiyosaki, author of the highly acclaimed book series Rich Dad Poor Dad, having a great business system is an essential key to success. It is even more important than having a great product! A business system is the total package for running the business: location, marketing products, sales process, management, training and so on.

Franchises are all about a business system. Franchises tend to take common products (hamburgers, oil changes, etc.) and build an effective business system around them. The section entitled "Qualities of a Good Franchise System," addresses how franchisors do this and how you can evaluate a particular franchise business to determine the quality of its business system. With the very best systems being a ten, you want to see that the franchise you select has a great business system.

Identifying a great system is important, but a word of caution is in order. Prospective franchise owners may be tempted to put all their emphasis on the quality of the system, without considering the third and equally important element. We call it "Fit."

"FIT"
No matter how good the business system is, the business must be one that "Fits" you. It must be a business that builds on your strengths and talents. Every franchise system has successful operators and less than successful operators. The difference is the individual. A business system does not run itself.

Identifying a business that fits your profile, what we call your business model, is just as important as the quality of the system. Section five, “Tools for Structurally Sound Decisions,” addresses how FranNet helps you develop your unique business model and use it to find the business that is right for YOU! As you probably guessed, the goal is to find the business that is as close to a ten in how it fits you.

Achieving Your Dream
Franchising is a great choice, but it is only one option for getting into business. It is always good to understand your options and determine what is best for you. Every choice has its advantages and disadvantages.

The three basic options are these:

  • B Start a business from scratch
  • C Buy an existing business
  • D Purchase a franchise

  • >>

    START FROM SCRATCH

    BUY AN EXISTING BUSINESS

    PURCHASE A FRANCHISE

    Availability

    Limited only byyour imagination

    Limited

    Many

    Proven System

    No

    Yes

    Yes

    Correlation between investment and profit potential

    None

    High

    None

    Support after purchase

    None

    Limited

    High

    Risk Factors

    First time effort

    Hidden motives of the seller

    High variability of quality among franchises

    Attractive to Lenders?

    No

    Yes

    Yes

    How to Predict the Results

    Projections based on your assumptions about the market

    Projections based on historical results of the business

    Projections based on results of current owners

    Making Changes

    Up to owner

    Up to owner

    Some aspects likely limited by the franchise agreement

    Other articles on Columnist franchise
    If franchisors are reluctant to negotiate the terms of their franchise agreements, what is the point of having it reviewed by a franchise lawyer before signing? Consider The Following Issues BUYING A READY-MADE BUSINESS IS APPEALING TO MANY MID-LIFE ENTREPRENEURS BY JAMES PASTERNAK