In this section, we’re going to look at all the different components that are required to help you find your optimum match.

At the risk of repeating myself, please remember that good franchisors are looking for people with transferable, leverageable skills. These are business and interpersonal skills like management skills, people skills, communication skills, possibly sales and marketing skills, operations skills, IT, and other technical skills.

Most franchisors are not looking for people who are necessarily experts in a certain area, because being an expert often means those people are more likely not to follow the franchisor’s systems and processes.

There are a lot of complexities in finding an optimum match, so let’s look at a few of the main ones.

Let’s first look at finances and understanding investment. We hear a lot of people saying it costs too much to buy a business. I would suggest to you that statement is inherently wrong. While yes, there are always costs involved, successful business owners look at things differently. They look at the acquisition of a business—the purchase price of a business and everything it takes to get it to open—as the initial investment. And that requires a transfer of funds from one asset pool—wherever your funds are right now—to the new asset pool: the business. That business is one the owner will have far more control over.

As we’ve talked about in the funding sources section, you’re leveraging your money and the bank’s money in order to build an investment vehicle that delivers an annual return on your time and effort—the equivalent of an employment income.

Next: a financial appreciation of the value of the business. Many franchises sell for 2.5 to 3.5 times their annual profitability. Unfortunately, most people overlook calculating this when they’re looking at their overall return on investment.

You’ll also want to ensure that the business can deliver on your short-term, mid-range, and long-term lifestyle and financial objectives. A different way to ask this is: what are the outcomes going to be when you run your business well? What’s the annual income that you want the business to be able to generate at stride? How many hours do you want to work? How much vacation and travel do you want to do? What kind of overall work/life-style control do you want to have?

Start to build this in detail for as long a picture as you can. Years 0 to 2 are your sacrifice years—you’re just getting the business up and running. That’s when you’re going to work the hardest and have the least amount of return. But after that, you’re at stride. For most of our clients, stride is 3 to 10 years, sometimes 15. They’re saying this is the main zone, the main timeframe that they want to run the business.

So what are the criteria through that stage? If you’re hitting those ideal levels during years 5 to 10, what does that look like? At 10 years, now you’re a seasoned owner—what does that look like? Are you growing and scaling the business and creating an empire for yourself? Or are you saying, at the 10-year mark, “You know what, I’ve got a great lifestyle—I just want to continue and maintain that lifestyle”? Or maybe you’re saying, “It’s time to sell,” and now you want to look at your value. Or maybe it’s, “I’m going to keep this business going, but I’m going to move into that executive owner role. I’m going to hire a manager, and now I’m going to start enjoying that annuity income while still retaining the asset.”

You see, there’s a lot of different criteria here, and all of these are possibilities. But it can’t be other people’s criteria. It’s got to be your criteria. Maybe you’re thinking about involving your kids in the business, or maybe you want to buy the business so that your kids have a foundation starting now.

As with any investment, thorough research is required before you make the investment. So we want to emphasize the importance of buying a franchise as making an investment—not as something that costs too much money.

The next element of finding an optimum match is making sure that you separate the function of the business from the function of the owner of the business.

The function of the business is what the business provides its customers: delivering a specific solution or suite of products and services. The function of the owner of the business is performing the work it takes to drive the business—performing critical roles that ensure the products and services get into their customers’ hands while creating an awesome experience.

For example, when you look at any quick-serve or even full-serve restaurant, what’s the function of the business? The function of the business is to get that food into the customer’s hands at a good value point and at a great experience, right? So if you like coffee and you like cooking, you might be thinking, “Geez, I should run a food business.”

Well, let’s look at what is the function of the owner of running a food franchise. You’re probably managing between 20 and 60 staff, most of whom are going to be entry-level, unskilled—and therefore there’s going to be a lot of turnover. You also have to manage inventory and supplies. You have to manage the facilities. You have to schedule your staff. You have to pay the bills and manage cash flow.

So, if you’re thinking about a business where the fulfillment of the activities is what you’re passionate about, we call that alignment with the function of the business. You want to pause for a moment. You want to make sure you have as many of the necessary skills as possible to perform the roles of the function of the owner of the business.

Successful franchise owners make sure that there is a strong match and alignment between their skills, abilities, and interests and the critical roles that it takes to drive success in the business—to the function of the owner of the business, not just the function of the business.

Because transferable skills are so important, I’m going to spend a bit more time here. Instead of focusing on what the business does for its customers, first you have to figure out what you bring to the table—and we suggest you do that in great detail.

While this slide represents the major categories of business skills, we’ve come across very few people who are strong in all of them. So take some time to reflect and look at: What are your core skills? In which of these categories do they dominate? Which of these categories do they fit into? Which of these categories are there gaps?

What is it that you’re really good at doing and want to do on a day-in, day-out, week-in, week-out basis? What is it that you’re not yet good at but want to get better at? What is it that you dislike doing and would avoid if you could? What are the things that you’re bored with, that you’ve outgrown, that—geez—if you don’t have to do that ever again, that would be great?

As you get greater and deeper clarity on what your core skills are—and what they’re not—you can better assess how well-suited you are to running the functions of the owner of the businesses that you’re interested in.

While you’re looking at those businesses, when there are gaps (and there always will be), you can then look at to what degree the franchisor’s coaching, training, and systems enable you to bridge those gaps. That’s part of determining the optimum match.

Once you’ve figured out your resources—that’s the skills that we just finished talking about—the financial components and investment that we’ve talked about, and then how much time you can bring to bear for the business, now you want to look at outcomes. What are the financial and lifestyle outcomes that you want to realize as a result of running the business?

Now you want to start looking at: what are some of the business preferences that align with your skills and interests? And there are a lot of them out there, so you have to narrow it down.

How many employees do you want? What type of employees—skilled, unskilled? What is your financial investment comfort zone? Do you want to work from home, at a location, or be out and about in the community? How much time do you have to invest in the business? Are you looking at full-time? Are you looking at passive engagement?

What about the types of customers you want? Do you want business-to-business or business-to-consumer customers? Do you want a business that provides services, one that provides products, or a good blend of products and services? Do you prefer a well-established, proven business model, or are you more excited by emerging opportunities and emerging trends?

As you can see, there are a lot of different considerations here. And unfortunately, when people go out and try to find a business on their own, they miss some of the important ones—and that creates a lot of risk that they could have avoided.

There’s a whole lot more than what I’ve just described that goes into building your business model. And because most people have never done this before, one of the strongest benefits of using a FranNet consultant is to help you figure out as much of your ideal business model as possible.

The bottom line is: you need to have a clear understanding of what you bring to the table in terms of time, resources, and skills—and what you want the business to do for you personally: short-term, midterm, and long-range outcomes.

As you can see, there’s so much that goes into finding your optimum match—all the different criteria. But I may have misstated: preparing all of this information and getting this insight gets you ready to find your optimum match.

If you don’t have the level of clarity, then a lot of businesses look cool, and they take your time and effort to research—but they’re never going to be able to get you where you want to go.

So finding the optimum match—doing this pre-work—gets you ready so that every business you look at has to pass through a filter. And that filter is your goals, your expectations. If they meet initial muster, then it’s worth looking at. If they can’t satisfy your criteria on an early pass, you can disqualify them quickly.

This concludes the segment on finding your optimum match. In our next and final segment, we will go into detail on FranNet’s four-stage research process.