Giving up the corporate life to become your own boss

Advice on franchising by Pieter Scholtz, Master Licensee for ActionCOACH SA. ActionCOACH is one of the fastest growing and most successful business coaching franchises in the world today.

Right now there are many corporate executives perched in high rise buildings contemplating a career change. They have spent many years ladder-stepping their way to the top, learning the art of good governance, management, risk and reward, but in their heart of hearts there is a (secret) desire to go it alone. I know this because I was once in this position. 

With years of executive management learnings tucked neatly under my belt, I decided to resign from the board level I had reached and relinquish my guaranteed monthly paycheque to be my own boss.

Because I didn’t want the growing pains of starting a business from scratch, buying into a tried and tested franchise brand seemed the logical way to go. Already in my mid-forties, as is the case for most executive level corporate defectors, time was not on my side. 

With approximately 500 different franchises available in South Africa, I learnt that service sector is the fastest growing, resulting from the trend towards outsourcing non-core business processes. This interested me as I did not want my long-earned executive expertise to go to waste in a business that flipped hamburgers. I wanted a ‘white collar’ business to sink my teeth into. So off I went in search of an intellectual type franchise that also offered low start-up costs. 

The business and executive coaching industry was my big find. According to Harvard Business School, it’s recognised as the world’s fastest growing industry behind information technology and is worth approximately $1-billion in the States annually. Based on my past experience, I knew I was qualified for the job of business coaching and the same is true for most corporate executives.

Next, I did the math. With 1,5 million registered businesses in South Africa, growing at 20 percent per annum, I figured that conservatively the industry would be worth an annual spend of approximately R1-billion in five to seven years. Of that total number of businesses, 97 percent are small to medium-sized companies and statistically we know that at least 80 percent of businesses fail within the first five years; in truth only 40 percent of start-ups are still trading after the first year. So it was safe to say that most companies experience either start-up or growing pains at some point. It didn’t take long to realize that the opportunities and growth for trained business coaches was extremely high. 

I knew I wasn’t about to spend years developing my own business coaching methodology, so I went in search of a business coaching franchise. I found the franchise operation I was looking for and if you really want to be your own boss, so will you. 

Below I answer some frequently asked questions facing executives who want to make the leap to independence.

What are the benefits of going the franchise route?
Firstly, you are licensed to work under a unique and instantly recognizable brand with a sustainable product or service that also has an established track record. Secondary to that is the constant sharing of learnings and experienced leadership, often from a global perspective.

How do I choose the right franchise?
One of the challenges facing a potential franchisee is choosing the right franchise to match their skills. As I said earlier, if you have reached an executive level in a corporate environment, selling fried chicken is probably not going to be intellectually stimulating.  

How do I secure start-up funding?
Successfully borrowing from the banks will depend on the strength of your balance sheet, your ability to provide collateral and your track record. The banks also look at the franchise/franchisee suitability and often the level of training being offered by the franchisor.

What are the start-up costs involved in franchising? 
On this point I can only speak as to a business coaching franchise. The infrastructure costs are minimal, especially as most business coaches prefer to work from home or share offices.  

Please explain franchise royalties.
A franchise is a licensed privilege to the concept of a licensor who has invested copious time and financial resources into building a brand and researching and developing a product or service that will stand the test of time, while also enduring the risks associated with such a venture. The benefits of buying into an established brand are so great that no franchisee should consider royalties, also known by the more politically correct term of ‘management services fees’, a grudge expense. Royalty payments are an essential part of any sustainable franchise model and can be a fixed monthly amount or may be calculated as a percentage of turnover. While the benefits of associating with such a brand are numerous, one that stands out is the fast-track to a break-even point.

For a complimentary business health check from ActionCOACH and SA Franchise Warehouse, visit www.actioncoachsa.co.za/safw


ActionCOACH Business Coaching

086 122 6224

Comments