Surreal Entrepreneur

Let’s be clear, I am a novice stumbling through the perils of starting my own business. Until now I have been an idea man, creating something out of nothing. Bringing to light ideas that only exist on an imaginary plane. Most businesses fail because of a lack of preparation, poor understanding of competition, revenue, bookkeeping, but most importantly funding. I’ve been reading articles about funding from banks, investors, and angel investors and it is all convoluted language based on the assumption that you know what you’re doing. Let me clear some basics up before we move on to decoding entrepreneurial talk.

Sourcing in regards to angel investment means working towards receiving seed money to grow an idea past the idea phase.

Angel investment is an opportunity to receive money from an investor who is looking to help start other businesses in order to grow their own large supply of money.

When you as an entrepreneur hope to create something out of nothing, you will most likely need to find money to support that great idea to give you the necessary backing to succeed. One of my dear professors has reiterated several times to me the example of Hooter’s.

In order to own a hooters franchise you have to (or used to have to) have at least $3 million in liquid money in order to not only buy the franchise, furniture, food, staff, etc. but also to be able to survive for three years without making a dime.

This is why large franchises can grow and spread when it seems that they aren’t making any money, they are well supported financially from the start.

As an entrepreneur its imperative to recognize the opportunities that you have to receive funding. So now we’ll go back to sourcing. You need to build a network. Easier said then done, I know. However it starts with becoming a member of your local county’s chamber of commerce, for my county this was a $145.00 for the first year with an investment of $135.00 every year after that. Next you need to begin forming relationships with influential people in your community that know where the money is. Once you’ve gained the respect from these people, because you believe in your product or service and you are able to communicate that, they will be willing to help you expand your network of possible investors.

I hope this gives a basic overview of the process of sourcing for angel investing.

A purist entrepreneur might shake their head at the idea of franchising or managing a company story. However these are very solid places to start learning the ins and outs of business. It is just like any educational standpoint except it could be even more hands on in some ways. Today I’d like to answer some of your questions concerning the difference between Franchisee and Manager of a franchise store.

For illustration purposes I will refer to two well known examples of management types, MacDonald’s and UPS.

Franchisee:

With enough money you can buy a MacDonald’s franchise. First you will have to pony up a $500,000+ down payment in order to be considered for a franchise location. On top of that you will have to pay a premium for the education at Burger University, along with all of their help and resources for business management and marketing. Also you will have to pay about 4.00% of what the store makes. Lastly you will have to pay rent based on what the store makes as well.

Pros:

• You are buying a turn-key business model that is proven to work
• You have the support of a big brother that will partner with you on marketing and let you use their already established name brand
• Lower inventory costs
• You receive and education about how to effectively run things

Cons:

• You have limited room for creativity and innovation and also less autonomy
• Ongoing payments for the life of the business to the mother-ship
• Higher start up costs

Manager of a franchise store:

As the manager of a franchise store you will be placed in a position of authority over a complete staff and running a current system that the franchiser puts in place. Instead of worrying about all of the branding and large marketing, the parent company will take care of it for you. You will, in essence be in charge of maintaining the operations of the store and keeping everything running smoothly so you can make more money for your parent company. For instance UPS will hire someone above the age of 18 on a modest salary and benefits to someone for running all the logistics of that particular store.

Pros:

• Steady income and benefits based on loose metrics of productivity
• Proven model and direction in which to move

Cons:

• Lack of control over your business
• Only receiving a salary instead of dividends of the profit you make
• Lack of opportunity for creativity

Overall it is a pretty cut and dry decision. If you are looking to get into a business for experience then you should start as a Manager at a current store. If you are looking for some more autonomy and have experience running a business it is most likely more lucrative, although less safe, to buy your own franchise.

In the world of entrepreneurship it is essential to not only apply your life experience to your business, but also to gain an understanding of how to network and create a support group for your ideas. You must begin your journey with a solid knowledge of what not to do. This is where your life experience and your network of other entrepreneurs will help you succeed. Understanding where they went wrong and fixing the problem before it blows up in your face is imperative.

I have been told that only one in every twenty ideas sees success, I don’t believe that this is a direct result of all 19 failing business being bad ideas, I think that they were just poorly supported. Maybe there was a lack in fund raising and this leaves a business high and dry in a tough situation. Or maybe there is no business plan, or a serious flaw in whatever plan the business has.

In order to thrive you must be incredibly sure that you have everything in order to accomplish all the goals that you are setting for your business. Also it never hurts to be educated in the ways of starting your own business, once again I have to stress the importance on being prepared for the business venture you are starting. Why try to reinvent the wheel when others have already traversed into the realms that you hope to end up. Find out what school and programs most efficiently supply your necessity for more information and then compare them on the parameters of time and affordability and begin educating yourself on how to be a better entrepreneur. I’ve looked at my education and an investment in myself. Remember that this level of education is not necessarily just for your resume, it should be more about preparing you for your attempts to start you own business.

I do believe that each step we have taken, or have been forced to take leads us down the path to entrepreneurship. Our life experience, including parental influences, career choices, skills, talents, passions, all contribute to our ability to be better entrepreneurs, we just have to figure out how to use those factors in order to push forward and accomplish the goals we set for ourselves.

All my life I have wanted to be the best at what I do. I have pushed myself in places of interest to gain knowledge and experience. I know that this characteristic is essential to entrepreneurship, however it certainly has taken a toll on my personal life. I remember speaking to one of my professors in my undergraduate study who conveyed to me his concerns that my necessity to achieve goals only to select new goals for myself would damage my future life. He admitted that the very same attitude had ruined his first marriage.

I certainly believe that it is important to be driven and set on achievement, however, I believe that there is a necessity to find a balance between living and working. I am absolutely set on becoming successful however I need to find out how that success fits into my life.

It is imperative to have solid leadership skills and to be driven in order to pursue each business opportunity to the best of one’s ability. To settle for anything less than perfection is a waste of your time and resources. Just don’t forget to live a little on your journey.