Will your business be your primary source of income?

I love people who throw out statistics in a conversation. You know, the type of person that can miraculously spout off the percentage of how many Yaks migrate from the African Serengeti to Iceland each year. If challenged on the validity of said statistic, they invariably say that they read it in a magazine.

Since I’m not one of those people, I won’t bore you with some vague memory of an outdated statistic on the failure rate of new businesses. Instead, I’ll talk from personal experience.

During college I worked at this great little video store that had very few customers. This made it very easy to study and/or write papers. Very seldom would I be interrupted to do any actual work. Great for me, but I’m sure you’re wondering how the place stayed in business without customers.

The owners did not rely on the store as their primary source of income. In fact, they kept their jobs for the first five years the business was open. It took that long for the store to build up a reliable customer base and start becoming profitable. Even then, only one of the owners could quit her job to run the business full-time.

This was a business they started from the ground up, so obviously buying the brand associated with a franchise will have a better start. However, careful consideration should be made as to whether your new business will be your primary source of income or not.

It can take several years for a new business to start reliably turning a profit. Will you be able to survive that time financially with just what the business brings in? What are your financial goals for your business? Would it make sense for your spouse to keep his/her job until the business can support your entire family?

There are many benefits to keeping one steady earner in your household. Health insurance for a small business can be cost prohibitive. You might be able to have a better, cheaper plan through your spouse’s job. A steady paycheck can make it easier to plan your household budget rather than the erratic nature of your small business.

Before taking the plunge on a new franchise, be certain that the franchise you are buying will be consistent with your goals of being a small business owner. Be ready to endure the painful teething years all new businesses require to become an eventual success!

Franchise "Creature Feature" Writer