This article was written by my father, Phil Kuban. Prior to his retirement, Dad enjoyed a 35-year career in franchising after pivoting from a successful marketing executive career with 3M. As a franchisee, franchisor, and brokerage consultant with prominent brands such as Mail Boxes Etc., Moto Photo, VR Business Brokers, and FranNet, he worked with countless aspiring entrepreneurs exploring opportunities in franchising. The initial emotional and mental struggles he saw in others mirrored his employee-to-entrepreneur transition experience and inspired him to write this article. His message is as true today for corporate professionals seeking a future in their own business…
Addiction is no longer a taboo subject reserved for discussion behind closed doors. The declaration that the U.S. is facing an “opioid crisis” and the profound number of families tragically touched by addiction has driven the conversation to the forefront.
While I may not have faced addiction in the clinical sense, I did struggle to break through some long-standing beliefs that were holding me back professionally and personally. I had to admit to myself, and to my family, that my attachment to my corporate paycheck, much like an addiction, was lulling me into a comfort zone and a false sense of security. I needed to break free.
The three most harmful addictions are heroin, carbohydrates, and a monthly salary. ~Nassim Nicholas Taleb (Uncertainty Expert)
Most of us are raised to believe that climbing the corporate ladder is the safest path to success. It’s hard-wired within us to cling to predictability and the “known,” believing that change signals danger. We buy into the idea that sustaining that pay stub will lead to personal and career satisfaction.
If all that were true, why was I becoming less satisfied the higher I advanced in the corporate ranks?
My Breakthrough Story
It wasn’t until a family, cross-country drive that I awoke to the idea that this way of thinking – the safety of a paycheck – was holding me back. My dissatisfaction with the restrictions and bureaucracy of a corporate career already had me thinking about how I might establish my own business. I was already eyeing an exciting-looking franchise in the business opportunities section of the newspaper. My wife and children were asleep as I drove when I saw this billboard illuminated against the night sky:
We all hope for divine “signs” in times of strife and uncertainty, messages that will give us clarity and point the way to relief. This was that sign for me – literally, a sign in the sky – delivering the message I was ready for and needed. My opportunity was the franchise business I was excited about and my burden holding me back was my paycheck addiction. I drove back to the billboard the next day and took this photo to remind me of this pivotal moment.
I’ve shared this experience countless times over the years as it was the catalyst to my entrepreneurial adventures in franchise area development, brokerage, and consulting. It was not a breaking point, but a breakthrough. I decided in that moment to leave my corporate position to start a business of my own, and I’ve never looked back.
The Long and Short of Job Security
For some, staying with a predictable paycheck may indeed feel secure; however, it’s a false sense of safety. As time marches on, the chances increase exponentially that you will face repeated job losses that likely have nothing to do with your performance. Securing new employment takes time and recovering from the income gaps can be financially and emotionally devastating.
As I began my entrepreneurial career, I found the opposite is true in business ownership – especially, when the owner is well-matched to a promising business.
Yes, going into your own business likely exposes you to some income uncertainty in the short term, but that uncertainty wanes as your business grows and you become accustomed to your new normal as a business owner. Plus, instead of someone else holding the purse strings and gaining all the equity in the company, you are building an asset that could lead to a profitable equity event and an exit on your own terms.
Yes, you may have to let go of that predictable paycheck in the short term for a longer-term payoff. However, my three decades in franchising entrepreneurship have shown that investing in yourself via a strong franchise business model is not only a rewarding and fulfilling career path, but a solid risk-mitigation and wealth-building strategy.
Where to Start
Perhaps you’ve already confessed to yourself that your paycheck habit is not serving you well. Maybe you find yourself staring at the likelihood of another downsizing and thinking, “there has to be a better way.” Or, you’re already well aware that your attachment to your monthly paycheck is what’s limiting your growth and opportunity to fulfill your potential. Whatever your reason, the first step is to admit to yourself when those long-standing beliefs need to be addressed so you can break through your paycheck habit.
I know you may be thinking you agree, but you’re just not in a position to break completely free right away. Use your distaste for your paycheck addiction as motivation to start laying the groundwork for your future escape. Some steps you can take now:
- Sharpen your pencil and get very clear about your family’s monthly cost of living.
- Identify and eliminate the leaks in your expenses.
- Understand the status of your assets and credit. For a business loan, you will need strong liquidity and credit. Build up your liquidity now.
What about Passive Franchises?
This is a P.S. from Leslie. Be very cautious about franchise opportunities advertised as “semi-passive,” or semi-absentee,” suggesting you can keep your demanding full-time job while building a successful business on the side with a minimal time commitment. During the COVID years when unemployment was nearly non-existent and wages spiked for corporate talent, the pool of interested candidates for franchising dipped. In response, more franchises created “semi-passive” tracks for new franchisees even though they had no proof it could be done. Today, we are seeing the fallout.
The reality is all businesses, including GM “executive model” franchises, require a lot of your time as the owner in the first couple of years. Your involvement cannot be confined to a few hours a week or just on the weekends or evenings. With caution, you may hear me use the phrase “semi-active,” to describe a small and select class of franchise models. These opportunities still require an owner to be active in the business 25 hours per week for the first couple of years. Active does not mean having to be physically on-site for all those hours; it does mean you have to be readily available to communicate and give direction to your staff and be focused on the ownership activities that should not be delegated to employees.
We do have clients who succeed in this “semi-active” scenario while maintaining full-time corporate careers. There are distinct common denominators among these clients who make this work: 1) More than one owner is involved. Most commonly, two or more family members are active. 2) They have a high degree of schedule autonomy within their day job. 3) They expect to enjoy the fruits of this investment a few years down the road and rapidly re-invest in growth in the near term.
It is critical to be honest with yourself about your bandwidth, family involvement, and expectations to be successful in this semi-active franchise ownership strategy. If your circumstances do not align, it is better to wait until they do.
