Okay...so...the thing about blogging is this...when you say you're gonna do something, you've put it out there for the world to see and then, of course, the world is expecting you to follow through...
That can be a good thing or a bad thing, right?
It can motivate you to be accountable, or it can be a source of embarrassment when the things you talked about don't come to fruition.
Let's see...what have I said I would do...hmmm...I said I was planning to 1) Lose 40 pounds 2) Participate in a marathon, 3) Visit London over the holidays 4) Organize a Sisterlocks gathering in the area and 5) Start a business/introduce a product for lock wearers.
I know some of you have got to be thinking: what about all of that? But you are too polite to ask, or have simply decided that I am one of those people who is a lot of talk and no action.
Well...here is the big news that I have been sitting on. It is the ongoing project that has affected (interfered with) everything else.
I just bought a franchise!
And I am scared witless!!!
Any of you who know somebody who has purchased a franchise or ever looked into starting one yourself knows that it is quite a process. In some ways scarier and more involved than starting a business from scratch. There are pros and cons to everything. You strike out on your own and you are accountable only to yourself. You own your brand and your ideas. Typically less capital is required, but building a brand and identity is often harder and takes longer.
I started the process back in September and it has been all-consuming. Of course I had to do market research and due diligence. I had to research the company and its principles (and it's principals) and all the while I was auditioning for them. I had to prove to their people that I was worthy of representing their brand in my territory. It's a dance, I tell you...and nobody taught me the music or the steps.
I spent every spare moment doing research of some type. On applicable laws, financing, do's and don'ts, what questions to ask... And then there was the question of financing. Franchises are never cheap. And you know what? No one, I mean NO ONE wants to give you money for a start-up.
Franchises are no man's land for banks and investors alike. Every where I went I got the same answer: You've got to put up your own money. Cash out your retirement or other savings or get a home equity line of credit. Take out a second mortgage. If you're still open in a year, come back to us with your financial statements and we'll see.
What? You've got to be kidding me? I called everybody! All of the local banks, national banks, SBA. I looked up programs online.
Many websites say on the home page: this program is not for franchises, start-ups, or businesses open less than two years old.
What to do? Look for private investors? Venture capitalists and angel investors are interested in original ideas and business with a different structure and growth model from what I am getting into.
Anyhow, I finally got the last of the start-up capital I needed yesterday so I signed the papers and sent off the big check! I am scared and will be scared until the money starts coming in. I go for a week of training in January. Even though I have purchased exclusive rights to my home territory, I cannot even begin to work it until the first of February. That's how long it will take me to get all of my training and licensing set-up.
When you crunch the numbers and see how much money you have to lay out month after month before you can expect to see a return on your efforts and investment, it is a really frightening thing!
Wish me luck ladies!!!
I am not intentionally being vague, I just wanted/needed to write about my news and subsequent excitement/anxiety in this post. There will be posts forthcoming on the actual business and what it entails.
I'm scared! I'm scared and I'm happy, but for now, mostly scared.
This is scarier than buying my first house or first car. In one way, it's the same kind of commitment, but in another way, not. The contract I signed was for 10 years of exclusive rights. There are things that are standard in franchising, like your franchise fee that you pay up front for the right to use the name and marks. Because you pay that money up front, it's gone!. Whatever happens - pass or fail; sink or swim; win, lose, or draw - you do not get that money back. There are also minimum royalties. This is money (often a percentage and/or set flat fee - whichever is greater) that you must pay every month, regardless of profits (or lack thereof!) Yikes!
I keep telling myself - Hey! It's only 10 years! I have 27 years left on a 30 year mortgage and people routinely take out 5 and 6 year car notes. (Would you believe I've never had a car payment? No, not because I was rich like that. Just because I grew up in a family that was practical about not buying new cars and not spending loads of money on financing. I've always bought used cars for cash. I currently drive a '95 Honda that I bought for $5,500 in the year 2000.)
So this is scary because I have a mortgage, and now a second mortgage, and a prom note, and the royalty fees that I have to make every month. Regardless. So that can be a long ten years if I find myself struggling! Aaarghhhh!
If I had started my little business that I was thinking about, the worst that would have happened is I wouldn't have made money. I might have lost $1,000 on it tops! With this, I will not have made money and I will find myself tens of thousands of dollars in debt. If I don't make it, I will be bankrupt...I can't think about it.
But it's a business model and opportunity that I really believe in. And something that is fun that I've always wanted to do...so...even though it is a huge, huge, HUGE gamble, I'm betting it will payoff. But right now there is no way to know how big, or how long it will take to see true profits.
More to come ladies...
...Pray for me!