Change this one habit, and change everything in your life.
9 min read
Opinions expressed by Entrepreneur contributors are their own.
When someone invests in a tried and true franchised business that has a track record, they essentially bought themselves a winning lottery ticket. However, have you ever read about lottery winners? Stats show that the overwhelming majority of lottery winners are broke or back to where they started financially within two years of winning the bonanza.
When investing in anything, scrutiny and due diligence is paramount, of course. Investing in a franchise is one of the most informationally-comprehensive investments you can make, as far as I can tell. Because of the Federal Trade Commission’s rules on selling franchises in the United States and their requirement that every franchise have a Franchise Disclosure Document, which makes a franchise corporate entity totally transparent for the investor, a buyer has an unprecedented amount of information to help make a well-informed and educated decision on any franchise opportunity.
In addition, buyers are encouraged by the franchise company to take time and call as many franchise owners in their system as they’d like. Investors have the opportunity to hear from people in the trenches about how their business is going and whether the franchise company is helping them to succeed in their market. Potential franchisees may even talk to people who have closed their business in the preceding two years. (If you’re currently investigating a franchise get a free download of my “39 Questions to Ask Franchise Owners.”) Still with months of analysis, exploration and probing, many franchise units will still fail. Why?
I can write a book, and actually have written two, on all the reasons why business fail and all the traps to avoid when buying into a franchise. The reasons and excuses for failure are many. I have spoken to many franchisees of failed units and heard all the war stories. Everything from the landlord raised the rent which made it impossible to survive, to the government came out with a study warning consumers about the peril of using the very product or service they were providing, to a spouse got sick or passed away. I talked to one owner who had the experience of new sewer mains being installed on the street of his establishment. The workers tore up the street and of course, the way government projects go, it took double the amount of time than anticipated to complete the project and effectively put the franchisee and others on the block out of business.
Many times, the franchisee will admit that the business was simply not the right fit. The president of the franchise will quickly add, “Sometimes we award a franchise to the wrong person.” Or, “The franchise unit failed because of ‘operator error, the franchisee just didn’t follow the system!'” Franchise executives will point out the fact that they have X number of franchisees. Some are hugely successful and breaking records. Some are losing money hand over fist. And then they go looking for reasons or excuses to explain it away.
In my opinion, I submit that failing franchisees make really only one fatal mistake that triggers all the glaring issues that can be found an under-performing unit. He or she never made the mental switch from employee to business owner.
Making the switch.
So, what happened to these franchise owners who don’t make it? I believe much of the issue is in their head. Like with lottery winners, when someone becomes a millionaire overnight, they never had the chance to build their knowledge and relationship to money. They are thinking small when they should and could be thinking big. One night some of my friends and I were sitting around dreaming about what we would do if we won a million dollars in the lottery. My friend Robin blurted out, “Oh my goodness, if we won that much money we could pay someone to paint our apartment!” She wasn’t kidding. It never occurred to her that perhaps they could buy a new house and have someone paint something that they owned. I assume, because of Robin’s upbringing, she never thought that she could think beyond what she knows.
I am persuaded that everyone’s family has a financial thermostat and people from that family will always get back to their set point unless they change their thinking. As youngsters, we are all taught about money, most likely, without realizing it.
As a personal example, I remember my father saying things that I interpreted as gospel without questioning it. Why would I? Father knows best. I vividly recall, the furnace in our house breaking down and dad saying with passion and conviction, “See, as soon as you have a few extra bucks something always goes wrong and the extra money goes out the window.”
One time when my parents were buying a new car — it was used but new to us — dad came into my room with $5,000 in $100 bills and said to me, “Hold this money for a minute. You will never hold this amount of money in your hands again.” That kind of teaching could really dampen someone’s ability to think big. I hold no grudge about my father unknowingly setting my financial thermostat. He didn’t know any better. He was only teaching me what he was taught.
Number one on the hit parade was, “Money goes to money — the rich get richer.” My dad would say on a regular basis with distain. And he was 100 percent correct. The wealthy do seem to have that “Midas touch.” It’s because rich people are wealthy in their minds before they got rich in their bank account. I think this is where many franchise owners have a disconnect. They scrape together some money, buy into a great franchise but never change their attitude about creating success and wealth. They are still living in that apartment in their mind instead of thinking about the mansion in their future. Hard work will get you to a certain point but people seem to plateau at a certain financial level. The point of that plateau is what they think they deserve on a subconscious level based on their family’s money set point. To break financial barriers and self-limiting beliefs about money, a franchisee — and really every small business owner — has to train themselves to be a financial winner.
Here are ways to train your brain that have proven successful for me and others who had this financial, generational, mental setback:
- You’ve already reached a certain financial level in your life today. Celebrate and be comforted by that. Be grateful for your work experiences so far. Appreciate the fact that you can make a change and be a business owner in the United States with no constraints.
- Accept that you are a winner. Actually, you’ve already won. You have beat 300 million other sperm to be the unique person you are. That is an audacious miracle that you are the recipient of. Embrace that fact.
- Regardless of where you were born and raised, we have all overcome challenges as we made our journey from child to adult. Some have more challenges than others. Take solace that you are here now, able to read this article, and you are so blessed compared to so many who don’t have access to this online magazine. Not to mention how blessed you are because you actually know how to read.
- Erase the tape that was installed by your parents, teachers and preachers regarding how money works. Teach yourself about money and its energy. Only you can make that mental switch to your own relationship with money. Understand that your past beliefs do not dictate your future results and as we intentioned as your parents were, they may not have past the best information down to you.
- Know that you deserve whatever your goals are. If it wasn’t achievable, you wouldn’t be permitted by our creator to see it in your mind’s eye.
- Study wealthy people you admire or ask for advice from the franchisee of the year. Take them to lunch at your next national franchise conference. You will find that leaders will be happy to lend an ear. Success always leaves clues. Find out who has the clues, ask for the clues and then follow the clues.
- Associate yourself with great money thinkers. We are the average of the five people we hang out with most. Today we are who we are because of the books we’ve read and the people we associate with. Who are you hanging out with at your convention? Notice what the top performers are doing. Hang with them, do what they do.
- Ask a senior, successful franchisee to be your mentor.
- ABL — Always be learning. Read the articles in this publication. Read the books that are available to you. Go to seminars. Always be a student of greatness.
- Set up bank accounts, and know your money. One of the first line items on your profit and loss statement should be to an account for marketing. Without marketing, your business will starve. Ten percent of your profits should go to fun money for yourself and your family, maybe a vacation club or something you enjoy. If you do not have fun with your money, you will end up resenting your business.
- Do this powerful exercise. Write down all the negative money statements you’ve heard from childhood. Reframe the thoughts to be new positive statements. Change your words. As an example, don’t say things such as, “I can’t afford that.” Instead say, “I am choosing to buy that with cash money at a later time.”
Once you change your thoughts and behaviors surrounding money, you will begin to notice a difference in your business and its bottom line. Resetting your financial set point takes conscious effort and daily vigilance. If you want your business to go to the next level, it’s worth the trouble of being attentive to your thoughts and words around money.