Wall Street could lose nearly 10,000 jobs by the end of 2012, according to New York State Comptroller Thomas DiNapoli’s annual report, released on October 10. As the economy continues to decline, more and more corporate executives are left searching for a new career path, making business-to-business consulting franchises very popular these days.
Consulting franchises are appealing because they typically do not require an investment in brick and mortar, and they allow executives and entrepreneurs to own a proven business without dealing with the headaches of managing a retail operation.
Miles Lee, CEO of Alliance Cost Containment, a national consulting franchise that helps mid-sized businesses reduce their operating expenses, provides a few questions to think about for those who are considering a consulting franchise, including:
1. Am I ready for the responsibility? To run a consulting franchise, you must have a “street-fighter” mentality in order to deal with the barrage of daily challenges of being your own boss. You must be prepared to persevere through the setbacks, disappointment and uncertainty that will occur, particularly during the first 12-18 months.
2. Do I want to transition away from corporate life? A consulting franchise can be a particularly difficult transition for corporate executives who are used to working in large companies with layers of support and rigid processes. The franchisor should provide some of that support, but most of the day-to-day responsibility falls squarely on the new consultant. There is a natural feeling of isolation when one transitions from a corporate environment to a sole proprietorship. Make sure the franchisor has a mentoring program that pairs you with another franchisee.
3. What can a franchise offer that my own consulting company can’t? The barriers of starting a consulting practice are relatively low, so it is important to determine what the franchisor offers that you can’t create or develop on your own. It could be a technology solution, subject matter expertise, business development support, supplier contracts, or another advantage. Once you identify the advantage that the franchisor offers, you will feel more comfortable about your decision to purchase a franchise.
4. What’s my working style? A process-oriented individual should look for a franchisor that has a lot of structure and process standards in its operating model. You are essentially buying a job. An entrepreneur, on the other hand, typically resists structure imposed by others, and thrives on having as much autonomy as possible.
5. Who do I know? Consulting is a relationship business, so your likelihood of early success increases significantly if you have a large network of the decision makers, i.e. CEOs, CFOs and COOs. Take a good inventory of your contacts. Your rolodex can be your own personal ATM machine if you use it correctly.
6. Am I able to view my time as a capital asset? Consulting franchises usually don’t require a large start-up capital investment, which can be misleading. You should view each hour of the day as an investment in future growth. Make assumptions about how long it will take to start producing revenue, calculate the value of that time, and you will come up with your “capital investment”. Always factor in the uncertainty of the first 12-18 month
7. Am I ready to take the risk? Integrity and trust should always prevail; however, not everyone is as honest and forthcoming as they should be. Look for the franchisor that is willing to tell you the “good, bad and ugly” during the discovery phase. Ask to speak with people who are not succeeding in the model and ask the franchisor what their weaknesses are, and what the strengths of their competition are. Be leery if they gloss over the answer. Once you purchase a consulting franchise, you want all surprises to be pleasant ones.
For more info, visit www.costcontain.com.