Getting rich quick may happen to a select few, but for most of us, those will simply be fairytale stories.
I was recently sifting through my Facebook news feed and a story caught my eye.
“You Can Buy These Franchises for Under $10,000”.
I am certainly not a candidate looking for a “great opportunity” for under $10,000, simply a consumer of franchise news caught off guard by this statement.
Immediately, I had concerns, thinking about what this message sends to future franchisees. Under $10,000 and I am in business for myself but not by myself.
Sure, there are certainly good opportunities at $10,000 – but many are deceiving.
I debated about specifically calling out the article and its content, but rather, I have decided to address the principle and broader concepts instead.
One of the brands listed was a food brand with a brick and mortar location. I could very well be wrong, but unless there is some sort of magic trick I am missing, no one can nor should buy a food brand for less than $10,000. Why? There are several reasons.
First, at $10,000, you don’t have enough operating capital. Let’s stop there for a second. Operating capital, in my opinion, is one of the most important pieces of business ownership. It helps you prepare for the guaranteed rainy days in your first year of business. It helps protect you from thinking the sky is falling. It gives you more room to ramp up your marketing efforts. It literally allows you to operate the business.
Second, simply look at a home kitchen remodel. Do you think it is really feasible to be able buy refrigeration, grills, cooking utensils and surfaces for $10,000, let alone commercial-grade products? Come on.
Home-based businesses were littered throughout this list. Can you get into those for less than $10,000? Sure, but I think that operating capital challenges will still exist.
Look, I love the concept and execution of franchising. I do believe people buy great products over great businesses. I also believe that many in the industry focus on selling vs. awarding franchises. If you, as a prospect, think you can get rich with a franchise that costs you just $10,000, I want to dream like you.
Are there rare exceptions? Sure. I started my business for around that much. But, I also came with a ton of hustle, systems and knowledge. I was more like the franchisor.
I don’t wish our industry was more regulated; I want it simply be more guarded and focused on protection of current and future franchisees.
Just be careful. Getting rich quick may happen to a select few, but for most of us, those will simply be fairytale stories.