by Jan Norman (chapter 50 is reprinted below with permission of the author)
For more than 12 years, Calvin Yu worked in his family’s business-to-business technology company in Dayton, Ohio. When his parents retired, Calvin remained with the business for 18 months to help with the transition. Although he has a college degree in computer science, Calvin wanted to move to Southern California in 2004 and try working in a non-technical field. He considered looking for a job, but having been a boss and an employee, Calvin decided he wanted to own his own company. “Either way, I always give 110 percent, so in the long haul I might as well work for myself,” he says. Calvin investigated buying an independent business, but thought it was financially riskier than he wanted. “In a private business, you’re completely on your own,” he says. “With a franchise you’re not really an entrepreneur. The products and services are laid out for you.”
Before investigating franchises to buy, Calvin weighed both his own strengths when he worked in the family business and his long-term goal. “I’m strongest in operations and management,” he says. “My five-year goal is to get married, buy a house, and have kids. A franchise is riskier than a job but the financial rewards are better.”
He wanted to find a franchise that capitalized on his operational strengths, required few employees, and had more reasonable operating hours than restaurants. He intentionally avoided technology franchises and those selling to businesses with which he had prior experience. He wanted experience in a business-to-consumer sector.
Many franchise buyers are most comfortable looking at franchises in industries in which they have prior experience. Some strike out in a completely different field without weighing whether they have any transferable skills to run such a business. Franchising attracts large numbers of former managers and executives who know how to work with employees, write a budget, market, or plan strategically. The most successful franchisees are those who match not just their experience, but their strongest skills to the franchise most in need of those particular skills.
Calvin almost surprised himself that the franchise that rose to the top of his list was Cash Plus Family Financial Service Centers, which provide check cashing, money orders and transfer, and loans of two weeks to a month for people faced with an unexpected expense before payday. He thought about some auto-related franchises because he is passionate about cars, but decided Cash Plus best matched his skills and plan. Calvin bought the rights to a Cash Plus location in Fullerton, California, in 2005.
“What Cash Plus offers is light-years easier to operate than retail and the hours are shorter. Its services are used by a lot of immigrants and middle-income people, and it gives me experience in the consumer sector, which is different from business to business,” he explains.
“I intend to open three to five Cash Plus locations and own several different types of businesses,” Calvin says. “My ultimate goal is to go back to technology, but experience in other fields with different customer segments will broaden my perspective. Already, my research before buying Cash Plus has opened my eyes to other segments I wouldn’t have been aware of previously.”
What No One Ever Tells You About Franchising © 2006 by Jan Norman and published by Kaplan Publishing, Chicago, IL 60606