Investing in a franchise may just be the answer you’re looking for to all your retirement worries
According to Scottish Widows, as many as 50 per cent of us worry that we’re not doing enough to prepare for retirement. With the growing cost of living and all the other financial burdens we carry – cars, mortgages, unexpected events like global pandemics – it’s hard to make sure we are putting enough away for our future.
Squirrelling away a little every month from our salaries is one way to do this but, unless you’re very lucky in your job, this is only ever going to achieve so much. Most of us are not likely to be able to boast a rich portfolio of stocks or property by the time we reach middle-age, either.
While the high-risk, high-gain option of investing your money in a variety of funds can seem like a very tempting option, you could easily lose what you already have. Moreover, if you work for someone else, you are always going to have limited control over your financial future and, if the pandemic has taught us anything, there is no such thing as a “safe job” anymore. Without a doubt, starting your own business is one of the best routes to the kind of financial freedom we all dream about but it can also mean a great deal of risk for your hard-earned cash.
So, how exactly can you break free of this catch 22 situation and do something meaningful to build the future you want? Fortunately, there is another way.
Franchising – an investment in you and your future
When we talk about the advantages of franchising in successfully building your own business, we tend to focus on how it can help us fulfil our immediate ambitions. By partnering with an established brand that already has a proven business model and a well-honed product or service, you’re certainly giving yourself a huge head start in becoming your own boss and increasing your earning potential.
Throw in the training and ongoing support that some of the very best franchise opportunities can offer, you can see why it has become such a successful model – but have you considered how it could also help you plan for your retirement?
You’ll be able to build a stronger revenue stream of course, which means more money to put aside. You will also be building a valuable business that will only increase in worth with the more work you put into it. When retirement rolls around, you’ll have two options: appoint someone else as manager and keep the company in your name, or sell it wholesale as a valuable, established business.
If you decide to keep ownership, you can continue to enjoy a residual income, and even carry on working in a capacity that suits you – and a lot of retirees do value keeping their hand in these days, even if it’s only part-time. Should you decide to sell your business instead, you can enjoy a large cash sum that will greatly exceed your initial investment. After all, your hard work will have built it into something very attractive to younger entrepreneurs coming into the franchise market. There’s always a brisk trade in resales, especially when you can easily demonstrate how successful you’ve made your franchise.
What kind of franchise is the best for building a retirement pot?
With around 1000 different franchise systems in the UK right now, there really is something for everyone – the trick is finding the right one for you. There are a great number of factors you will want to consider before you take the plunge, not least if it has a business model you can really commit to. You want this to pay off in the long run, so you want to be sure it is an industry that you can give your all to for many years to come.
Apart from that, there are two major factors you should always pay close attention to – support and long-term value appreciation.
While there is no shortage of excellent start-up packages out there, you will want to be sure that the franchise you choose is fully committed to continuing to support you over the long term. The best franchises will work closely with you, not just over your first few months or years, but for as long as they are your partner. Give priority to any franchise that has a solid support team and has a genuine interest in helping you to grow your business for the next five, 10, 20 years or more.
With that same long-term strategy in mind, you should also be considering how a franchise helps you increase the value of your investment over time. Make sure their products and services are something that has long-lasting appeal and pay close attention to brands that invest a lot in R&D and innovation so that you can continue to enjoy added value far into the future.
When is the right time to join a franchise?
There’s no upper or lower age limit on who can benefit from being part of a franchise, there is certainly no such thing as too early to start planning for retirement. So, really it is all about what stage you feel you are at in your life and career. Despite being one of the safest and most reliable ways of starting your own business, franchising is still no golden ticket to success. You’ve still got to work for it and be someone who has the skills, experience and confidence to run their own business.
For this reason, your 40s and 50s can be a real sweet spot when it comes to starting a business that will help you build that all-important nest egg for the future. You’ve gained the skills and self-discipline necessary to make it work for you, probably have easier access to the funds necessary to get started, and still have plenty of time to really build something worthwhile.
Of course, if you’re 25 and have what it takes, or are 65-plus and just looking for a retirement income, there’s no reason to hesitate. Basically, there’s no time like the present to start thinking about franchising.
Danny Hanlon is the UK COO of TREND Transformations.