Whether it’s starting from scratch or buying a franchise there is a lot of risk. It’s scary.
You probably saved up some money and now you’re walking up to the table to “let it ride”. Please remember you’re not only risking the money you have but it’s future value and even the additional capital that may be needed. You might turn your hard fought $100,000 savings account into a realized loss of $400,000 let alone the growth of your savings if you would have just left it in a simple interest bearing account.
Have you heard that your leases, loans, franchise agreements and other commitments will require personal guarantees? So even if unfortunately after many months of losing money & your business shuts down, you’re going to be paying rent on the empty space per the terms of your lease.
One of the biggest… oh let’s say… “disappointments” in a business not succeeding are the personal guarantees. Most are under the impression that when your business closes down it just goes away. There’s more to it than that. The implications and commitments can go on after you closed the door.
Nobody starts a business thinking they’ll fail. It happens though. It’s important to understand not just the cash you’re risking but a much bigger impact… future money.
Plan for what’s the reward but also what’s the risk, ok?
So I started my small business of course as an investment. I was looking for a return from years of hard work and the financial management to save some money. I was concerned of course but I made the best calculated risk I could at the time. When I opened my first location I was so proud. I was so excited for our family because I had the confidence (ok… mixed in with a lot hopes) that we would build something even bigger.
Things went pretty good for our first couple months. We were hitting projections and yes we seemed to be building something.
One day a team member came to me excited that she was pregnant. Her & her husband were going to start a family. I was excited too of course. We spoke about our polices, scheduling plans and what we needed to take care of for the business.
She also spoke about their plans. That’s when it hit me. I stepped back and realized what I had really built. My years of hard work. My perseverance to save. Risking my savings in an investment. That investment was now helping others raise families, pay for an education or simply have a place to live. Suddenly I realized I had more responsibility than I had planned for. It was now even more rewarding.
So it’s critical to remember our businesses need policies, structure and accountability. We also need people. We need to remember we have people who are working for us to build something bigger in their lives. Just like I did.