It’s with a heavy heart and gratitude that I write this post. The world lost an entrepreneurship champion on February 28, 2015 when Thomas J. Stanley, Marietta GA resident and author of the New York Times blockbuster bestseller, The Millionaire Next Door, passed away in a fatal car accident. He was 71 years old, the same age as my father. My Dad met him when he was a Georgia State University marketing professor and we both have been referencing his teachings and recommending his book in our seminars about business and franchise ownership for over 15 years.
Many of the values Stanley professed including frugality, practicality and conservatism mirror those taught in my own upbringing and are expressed in my personal franchise ownership experience and that of my family’s since 1982. While his work was not specifically about entrepreneurship through franchising, there is a timeless truism to be gleaned from his work that has proven true in my experience as a franchise owner and I believe of important value to anyone exploring business ownership as a career, investment, and lifestyle.
In his research, Stanley found that most American millionaires are self-made people; their wealth is not inherited. Also, he found overwhelmingly American wealth is achieved through business ownership. And...
“The real way people make money is hard work for 30 years, six days a week.”
What does this have to do with the franchise model of business ownership? A lot actually.
While franchising is responsible for approximately 40% of the service and retail dollars in our economy, only approximately 12% of service and retail units are franchised. That means most small businesses, past and present, are independent, mom-and-pop operations, of which only a small minority live to see their 10-year anniversary. In fact, according to the US Census Bureau for Small Business, a third of small business start-ups do not survive even two years. Those that do succeed often do so against the odds and through enormous toil, building every system in their business from scratch and surviving a string of mistakes (often expensive) along the way. Hence, Stanley’s reference to the 30-year runway to achieve wealth for most independent business owners.
I don’t know about you, but I’m not that patient. Most people don’t want it to take 30 years to realize their goals and many don’t have 30 years to make it happen.
If you could invest $30,000 - $50,000 to establish a successful business with high equity value in 5-8 years while experiencing a shorter learning curve, faster runway to profitability at a lower personal risk…would you consider that a good deal? We do. That’s why my family has stuck with business ownership through franchising for three decades.
I’m referring to the one time up front franchise fee that franchisees pay to gain access to all the business systems a quality franchise company has developed over time through trial and error. While some resist the idea of paying for the privilege of furthering someone else’s businesses model, those who appreciate the cost of time, see it as a bargain.
There is a non-variable here; it’s hard work. Whether it’s working 6 days per week for 30 years to grow your own business invention from scratch or investing in a proven business model through franchising, you’ll work harder than you probably ever have before. But the difference can be the time it takes, the risk potential along the way and the end result.
What also strikes me in Stanley’s work are his lessons on the importance redefining our long held beliefs, such as passion and achievement. The business owners who make it often define success in terms of the pride they have in owning their own business, the freedom they have from being their own boss and not the size of their house of the make and model of their car. This is a pivotal shift in our thought processes and, in my opinion, a critical one.
We have lost a man of great wisdom and contribution, a man whose life’s work touched millions. He will be missed.
Thank you, Mr. Stanley.
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