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The Most Awkward Conversation in America
The Most Awkward Conversation in America
By Jeff Elgin
You just discovered that another person you know has lost their job. It seems like this is happening almost every day. Friends, relatives, neighbors and business acquaintances – it’s epidemic.
In many cases, you know for a fact that these are wonderful, talented people who are simply victims of current economic circumstances. They will deliver great value wherever they end up next, but unemployment is rising so fast that no one knows when or where that might be.
How do you handle their request for help when they attempt to network out of their current situation? What do you say? What can you do to help? What suggestion can you offer them that might be a positive path they could explore?
These difficult questions are the reason that this appeal for assistance is the most awkward conversation in America today. No one knows what to say when it seems there is very little hope of finding another good job, at least in the short term. You can’t really offer any good options for this person, when they are desperately looking for alternatives or suggestions they can pursue, because you just can’t think of a thing.
Well, there is one positive suggestion you could offer. While they are exploring all their other options, perhaps they should also look into the idea of owning their own franchise business. There are certainly challenges to this idea but it is often a very positive alternative that doesn’t occur to people if they have a total fixation on finding another job. If they do decide to look at franchise opportunities, it is very important that they keep in mind the three critical success factors in selecting a business for times like these. These factors are:
1. Recession Resistant Businesses. Now more than ever it is essential to focus any business opportunity search on those types of businesses that do well in rough economic times. Consumer trends in many ways are the same in any recession and you can take advantage of that fact when looking for a franchise. Examples of recession resistant industries could include:
- Products or services that people buy whether times are good or bad, such as haircuts or health care.
- Products or services that are paid for by third parties, such as insurance companies. This dynamic exists in industries like restoration services and auto aftermarket suppliers and repair shops.
- Products or services that are the low cost providers in any space, since consumers tend to downgrade their spending options. This dynamic benefits companies like fast food at the expense of sit down restaurants.
- Products or services that feature fixing up something a person already owns as an alternative to buying something new. This could include handyman services and many other service providers.
- Products or services that offer a chance to “escape” from the everyday grind of tough times. These would include numerous businesses that offer entertainment options to their customers.
2. Financing Strategies. The credit market is more challenging today than at any time since the great depression. For most people, a successful analysis of franchise opportunities in this climate needs to include a realistic assessment of what, if any, financing is going to be available and how much it is going to cost. Some of the innovative options a buyer may consider today would include:
- Personal Resources. The phrase you hear all the time when the economy is in recession is that “cash is king”, and for good reason. This is the time to protect and preserve whatever cash assets you have so they will last as long as possible and producing as much cash from your resources (such as home equity) as you can. Cutting down on personal expenses or selling unneeded assets to raise additional cash will enhance your personal resources. Making the best use of any transitional cash you may have in the form of severance or early retirement payments is also essential.
- Retirement Plan Assets. Though the common joke in America is that the 401K is now the 201K, due to market losses, the reality is that this is still the largest asset they own for many people. The losses of the past year are a reality and there is nothing you can do to change that, but you can carefully consider what you think offers you the best investment potential going forward. If you believe that betting on yourself is probably better than doubling down on Wall Street, then these retirement funds can be a great source of capital for your new business startup.
- Personal Contacts. In spite of all the troubles in the economy and stock market, there is still a mountain of money looking for a reasonably stable investment with a decent return on investment. Many people who are investing in franchises are asking around to find out if they have friends, relatives or business associates that might like to invest or loan money with the new business.
- Downsizing Investment Levels. Another strong trend in today’s market is to look at franchises that offer lower initial investment levels. A person might have selected a retail store franchise two years ago that required a $240,000 total investment and covered it by investing $80,000 and borrowing $160,000. That same person today might invest in a B2B service franchise with a total investment of $80,000 and simply use all cash rather than needing to borrow. Keep in mind that a higher initial investment in a franchise operation often doesn’t correlate to higher income – in fact the opposite is true in many cases.
3. Professional Advisors. Now more than ever it is important to use the services of professional advisors.
- Attorney and Accountant. Everyone has heard a million times that you need to consult with your attorney and accountant before investing in a business. This is especially true today because so many expense items are negotiable that used to be written in stone. Use these advisors to save yourself money and avoid making expensive mistakes.
- Financing Funding Specialists. Now more than ever, you need to determine what all your financing options are as early in the process as possible. There are small business financing experts whose sole function is to identify what options will be available to you and what the cost of funds will be for each option. They charge fees but usually only when you are funded so it shouldn’t cost you anything to investigate your choices.
- Professional Franchise Referral Consultants. Companies like FranChoice specialize in matching people to franchises that will help them meet their goals for business ownership. These experienced consultants are in the market every day so they are completely current on the best and most exciting offerings as well as the most successful financing options. Best of all, their services are free to the consumer. In a tough economy like we have today, you need to use these services to help you find strong opportunities and avoid big mistakes.
If you’re having the most awkward conversation in America and don’t know what to say to offer some hope, suggest the idea of the American dream. This may very well be one of the most exciting times in history to seize control by becoming the owner of a franchise business. All anyone risks is a little of their time to look into options and by suggesting this idea you may do a favor for a friend that ends up being appreciated forever!