Over the last several months, we have seen daily updates on the number of diagnosed cases and deaths from COVID-19. We also hear about the impact the pandemic has made on the nation’s business sector, as more than 36 million people have filed unemployment claims since mid-March, which represents 22.4 percent of the country’s labor force.
It is a frightening and uncertain time. Many people are just focused on survival – staying healthy and either keeping their job or quickly replacing the one they lost. The ‘shelter in place’ fear we live with each day creates the feeling that this is not the time to make a career move or contemplate starting a business.
Although I certainly understand that mindset, experience has shown me that hiding is not the answer. As a franchise coach having owned businesses for more than 30 years, I have seen a few ups and downs. Not only is this the time to overcome your fear, but this dislocation we are experiencing provides a unique opportunity to regain control of your future.
Here are a few things to consider when thinking about franchise ownership in 2020:
#1 - Eager Employees
One of the biggest challenges of business ownership are employees. Finding good employees that you can rely on is difficult. In a peak economy, good employees are scarce, and you must provide economic incentives just to get them to join your company.
That is not the case now. Today there are a lot of high-quality people looking for jobs. You can secure higher quality employees at a lower cost. The pendulum is swinging in the direction of the business owner.
#2 - Reduced Rental Rates
A year ago every business owner would tell you that finding a great location at an affordable price is exceptionally challenging. Today, that is changing. As businesses close, prime locations become available.
Econ 101 tells us that as the supply of prime locations goes up and the demand for those locations goes down, prices decline. Today a new business owner has a much better chance of securing a prime location at a reasonable cost.
#3 - Reduced Competition
In a strong economy, everyone jumps into business. There is a lot of demand but there is also a lot of competition. Often this leads to higher advertising costs and fierce price competition.
In today’s world, weaker players without robust operating systems and financial controls are closing shop. Those with stronger systems will survive and be in a better position to increase market share. We saw this happen in 2009 and we can already see the same thing happening again.
#4 - Franchisor Incentives
Over the last several months, some franchisors are offering temporary incentives. Examples include, waiving royalties for six months, discounts on franchise fees, paying for training costs or flexibility regarding opening dates. The only reason these incentives are being offered is because of COVID-19. The business climate is changing and the franchisors and adapting. The result is greater opportunity for the franchisee.
#5 - Real Job Security
Once again, we are faced with the sobering reality that ‘job security’ cannot be taken for granted. People who have lost their jobs, been furloughed or are wondering about the next round of potential corporate downsizing are rightfully concerned.
But let’s talk honestly for a moment. So long as you are an employee, you will never have job security. Promises are made but when times get tight, employees can be eliminated at any time. The only way to experience job security is by owning the business. You will have to invest in yourself and you will be ultimately responsible for the results. However, business ownership is the only way to create job total security.
Dislocations like we are seeing today are always scary. Humans have always been scared by the unknown; however, change is not always bad. Sometimes change offers opportunity.
The first half of this year has given all of us the time to reflect on what is important. If you are unsure of what your future holds, this may be a good opportunity to take greater control over your professional career by exploring franchise ownership.