Build... Buy...Franchise?

After going into survival mode in 2020... and come back mode in 2021... many businesses are now poised for expansion in 2022.

Data shows new business formations this year are thriving. After nearly two years of economic uncertainty, more and more people are following their entrepreneurial dreams and taking control of their destiny through business ownership.?More startups launched during 2020 than any time since 2005. According U.S. Census Bureau, over 4.3 million new businesses started nationally -- a 24.6% increase year over year.

As a franchise consultant, I am continually assessing new opportunities to provide aspiring entrepreneurs a complete and unbiased report on the current state of franchising.

Here are my 5 top trends that have impacted the franchise world this year.

1. The Great Resignation fueled pent up demand for greater flexibility and a more entrepreneurial lifestyle

The Coronavirus has unleashed a tidal wave of entrepreneurial activity leading many to regroup and take a fresh look at their career path and consider alternative pathways. It has provided a nudge for those looking to do something different -- but too afraid to lose the "stability" of a job.

Every 25 to 30 years, something dramatically changes the way we work-- from the Industrial and digital Revolutions to COVID-19. According to a study done by Future Sight Labs (a research institute partnering psychologists, socialists and data scientists to advise brands and leadership teams regarding future trends), 88% of workers have redefined what success looks like for them post-pandemic. The Great Resignation driven by entry-level workers and executives alike has prompted many to reevaluate their values and make life changes based on newly defined priorities.?This was?not about people refusing to come back to work because of government assistance. It was a large swath of the population re-imagining and redefining what success looked like in their life.

Harvard Business Review revealed that employees between 30 and 45 years old had the highest resignation rates. It’s likely that many simply reached a breaking point?after months and months of high workloads, hiring freezes, and other pressures, causing them to rethink their work and life goals.

According to SHRM (the Society for Human Resource Management) , the most common reasons employees give for leaving a job include:

• Better compensation (cited by 53%?of respondents). After all, more pay enables people to do the things they love outside of work!
• Better work/life balance (42%)
• Better benefits (36%)
• Career advancement opportunities (33%)
• Desire to make a career change (33%). -- Commonly referred to as “COVID clarity”

See study by SHRM (Society for Human Resource Management)

2. Increased choices for financing

In 2022 there are more options than ever. The Small Business Administration (SBA) Express loan is?available for those borrowing $100K - $150K. No collateral (just business assets) and only 0 to 15% down payment. Interest rates are ~prime + 2.75% with a 7-10 year term. There is also a SBA Micro-loan for loans under $50,000. Banks are once again promoting traditional debt financing such as the?home equity line of credit (HELOC). And, we are seeing more internal financing, a financing option available through franchisors to help you afford the cost of opening your own franchise location.

Let's not forget 401K-Rollovers -- a plan that allows you to use retirement funds (e.g., an IRA, 401k & other qualified retirement accounts) before age 59 1/2 without incurring a penalty or having the withdrawal viewed as a taxable event. These plans -- known as ROBS (Rollover for Business Start ups) allow you to leverage the full potential of retirement funds NOW to purchase your own business, enabling you to possibly eliminating or reducing the need for additional loans. It allows you to potentially start your business debt-free with available cash, having no debt to increase your overhead.

All of these options are appearing in a low-interest environment with more relaxed approval standards. Together, these factors create more options, making business ownership possible for more people.

3. The rise of multi-generational partnerships.

Each year, millions of millennials are entering the workforce, so it's imperative that companies and organizations create bridges between the generations. The IFA's Next-Gen program helps some of the best and brightest young leaders in franchising with a series of initiatives. Here too there's a related trend that receives too little attention: the rise of multigenerational partnerships. Recently, I've noticed countless well-financed baby boomers eager to be their own bosses as well as many energetic millennials who want to ditch the corporate ladder for entrepreneurship. Pairing the two?has led to many successful partnerships within franchising, because harnessing these millennials' passion, energy and technological savvy is the perfect complement to the baby boomers' experience and financial stability.

4. The ubiquity of mobile

Mary Meeker, a leading tech analyst predicted that mobile would overtake fixed Internet access by 2014, and she was right. Around the globe today, there are more mobile users than desktop users, making mobile marketing a key for all businesses, including franchises. In 2022, hundreds of businesses will incorporate mobile into their marketing strategies and their businesses as a whole. Considering the number of mobile users, tools like mobile apps and text message marketing will help more and more businesses reach and influence customers.

5. The emphasis on community

In this age of social media, when all customers have a powerful voice, community building is more? important than ever for business owners. Traditional rules are still in play, and customer service?is key, but attention is required outside of the storefront. In today's world, it's those business?owners who take time to respond to online reviews, offer loyal fans timely deals via social media?and promote online the ways in which they give back to the community are winning -- and winning big !!

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If you or someone you know is considering leaving the corporate world, we have a wide range of franchise opportunities to check out . We can help you discover the possibilities.?

We appreciate you sending this link to anyone in your circle that you know is considering entrepreneurship. It’s not your father’s franchise world anymore!?Food is what everyone thinks of first but is very rarely what someone chooses once we’ve shown them some alternatives. We look forward to helping you and/or your friends and family explore their alternatives.

Reach out! e-mail me at [email protected] . Or, call my cell 646.505.8262.

Best wishes for continued success.

Alan Goldberg, CEO/Franchise Advisory & Consulting Group