America is Open for Business
Wow, another election in the books and the sun still came up the next morning! (as it always does) Regardless of political affiliation it is safe to say that we can now get back to business and focus on our families, friends and communities.
I am only going to present here a non-political look at what many expect to happen within the franchise community going forward based on conversations and information gathered from friends, mentors and visionaries in business.
For those of us that own businesses, and those that will soon, the one thing we can all agree on is that both sides of the political spectrum called for growth in opportunity for the middle class and that makes franchising perfect for the coming years.
Why is that, you ask?
Roughly 70% of the entire employee pool is employed by small to medium sized businesses. The benefits discussed in this election cycle for business owners may benefit these businesses and their employees the most. The impact will be felt in local communities and neighborhoods as most of the money spent in local franchises stays in your community, it does not get sent to a corporate office in another state or offshore.
From an employment point of view, the social contract between employee and employer in large corporations has broken down, companies regularly downsize to make their financials look good and employees regularly shop for new jobs and pay raises outside of their current company. The only place capable operators will find security is via business ownership where they employ proven systems and partners to build wealth that they control.
Jobs are not bad, they are simply apprenticeship programs for ownership. Once you have the requisite skill set it is time to control your own destiny.
The outlook at this point seems to be calling for reduced regulations on business, lower taxes for individuals and businesses, increased spending on infrastructure and in other areas that will spur economic growth as well as continuing access to funding programs all as contributors to grow the economy. In short, the focus is on business owners and growing their businesses.
Let’s look at these opportunities in a little more detail.
Franchising, by nature, provides owners better tools (proven system, training, support) than an independent start-up owner would have access to. The franchise company’s goal is to help you build a wildly successful business and then you contribute for that training and support on an ongoing basis which supports the franchise infrastructure. For operators and investors making a transition into ownership for the first time (and even in future businesses) the franchising industry strives to offer a potentially safer and faster path to your goals.
With the campaign cycle promise of lower personal and business taxes this may be the most rewarding time to be a business owner in many years. Many tax experts would say that business owners are typically offered more tax benefits than employees in an effort to spur economic growth. The coming months and years may prove to amplify that benefit given the strategy of the coming administration.
I am not a tax expert but have already been in conversations with the one I hire with eyes towards setting up our strategy for growth to benefit from anticipated tax changes. Our strategy is aggressive growth via franchise start-ups and acquisitions.
Not only are we looking forward to the changes and what they will do to benefit our cash position, we will absolutely be reinvesting any new benefit into growth and creating more jobs. The ways that we can use those funds in a business investment is significantly more interesting than how an employee could.
Reduced regulations will benefit each business category differently. Where we may see a universal benefit is in the reduction of regulations relating to funding solutions for business start-ups and growth capital. Access to funding is often critical in the decision process for candidates that want to get a business up and running. It is interesting that we are going into what looks to be a period of strong economic growth with low interest rates and ready access to multiple funding avenues. This will likely amplify the number of new businesses that we see entering the arena.
Reduced regulations in other areas may lower manufacturing and transportation costs. They may make it easier to bring on employees or to level the field and compete with those large companies on a local level. Time will tell where we can measure the benefits, but we hope there will be an expansion of opportunities for business growth across the spectrum.
Increased spending on infrastructure has clear benefits. The first is that your customers travel those roads, highways and other forms of transportation to use your services or buy your products. Additionally, your suppliers and employees all use that infrastructure to get to you.
The one infrastructure update benefit many will overlook is that much of that spending is on labor. There will be more cash flowing into the pockets of the people that will be working on that infrastructure, this should result in more consumer spending from that employee group.
While there will be books written on the past economy and that to come, what I can say here in this brief column is that I am looking forward to a period where we expect to see tremendous growth opportunities for those that have the skills sets required to run a business. When working within the franchise community there are easy qualifications the franchise community looks for from our candidates as they consider taking advantage of proven franchise systems:
- Some level of management experience
- Some exposure to sales or marketing (level varies based on business)
- Occasionally, a technical skill for owner operators
- Drive and desire to control your destiny
- Decision making ability
- A clear picture of the benefit of taking control over hoping a job will provide security
- Access to funding, can be SBA funding programs
What is your success story? Let’s go find it!
George Knauf is a highly sought after, trusted advisor to many companies; Public, Independent and Franchised, of all sizes and in many markets. His 20 plus years of experience in both start-up and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution. Contact the Franchising USA Expert George’s Hotline 703-424-2980.