Commentary: Franchise could be option for people who have lost jobs

[caption id="attachment_13137" align="alignleft" width="108" caption="Diane Pleuss"][/caption]

The stories we hear are frightening: a church advertises for a janitor and gets 254 applicants; a 42-year-old former business executive is willing to take an entry-level position - if he can get it.

Unemployment in the North Bay continues to climb, meaning there are lots of people here without jobs and, unfortunately, without a lot of hope of finding one in the near future. But there is an alternative that may help a number of people, particularly those who have always dreamed of running their own business: franchise ownership.

Maybe you're wondering who in their right mind would want to start a business right now. Often it's those people who've been right-sized. They may start out being reluctant entrepreneurs, forced to consider business ownership because of down-sizing or a right-sizing. But soon they find they are ready to stop following the herd, kowtowing to the "corporate-is-safe" mentality. They begin realizing, "I will feel safer when I have some control over my own destiny."

Small business can be the spark plug that helps ignite our sputtering economy. A number of successful people have used adverse times to their advantage because success is not dependent on the cycle in which you begin your business. In fact, there are some excellent reasons why starting a business during a recession can actually be beneficial:

Property/rental costs are down. Along with a depressed housing market, prices for leasing or purchasing a business location have decreased. That means it's a buyers market for those looking for premium business spaces at great prices.

Interest rates are staying low. As the economic recovery is expected to be slow, interest rates will likely be slow to rise. These low interest rates will reduce the cost of borrowing money for a new business.

However, don't expect to get a quick response to your loan application. Money is available, but getting it can often be a slow and arduous process. You'll need a good credit rating, some ready cash to show you have "skin in the game" and a healthy measure of patience.

There are lots of great employees available. Franchise owners not only help themselves, they create jobs for those in their communities. If you start your own business in 2009, you'll be likely to have your pick of talented and motivated employees.

Of course, starting a business is never a sure thing, and if you decide to start one in a recession, you'll need to take even more care than usual to reduce the chance of failure. One of the best ways to protect your investment is to partner with a strong franchise company.

When you become a franchisee, you receive the right to do business under the franchisor's name and brand. But that's just the beginning. You'll be part of a proven system with a tested, successful method of doing business. You'll receive training, opening help, marketing expertise and ongoing support. Depending on the type of business, you may get a call center to schedule your appointments, customized software to manage your inventory or group buying power to reduce your costs.

If you've been laid off, down-sized or are afraid that your neck will be on the chopping block next, could this indeed be the right time for you to find your own business?

Of course, if you do choose to start a business during a recession, finding the right business is crucial. You'll want to find a recession-resistant business, one that fulfills a person's needs rather than their wants, so it will survive even when people are forced to give up luxuries.

Interestingly, a few years ago people would ask me what the hot, new thing in franchising was. Now people are asking, "What type of business is tried and true and doing well in this economy?" Those people are the ones asking the right questions.

If you are currently or about to be unemployed, which side of the fence do you want to be on? The side where you're competing with loads of people for the few available jobs, or the side where you're the employer and get the pick of talent?

Use the benefits of a recession - cheaper rent, better interest rates and greater selection of employees - to kick-start your new business, and you'll be ahead of the curve when the economy recovers.


Diane Pleuss is a franchise consultant with FranChoice in Concord. You can reach her at 925-673-0412 or

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