Money Grows on Trees and a Well Planted Money Tree Always Blooms
As an entrepreneur of franchiser, do you know how much everything costs? More than you think; is the answer. When you start out your business, you will logically lay out a nice business plan. You’ll hire the right people and be ultra-disciplined about staying to your budget. It will take you about three weeks to figure out that you budget was way off the mark and there are 50 things you didn’t budget for and 500 things you didn’t realize would cost that much cash. Of course, right about the time you realize this, you will also become aware that you are destined to go broke and that ain’t no joke.
An entrepreneur in the western US, Harry, came up with a great concept for a franchise. It was one of those ideas that literally everyone fell in love with the minute he told them about it. In fact, without trying, he had a list of wanna-be entrepreneurs that wanted a store if he would only franchise. Harry could practically see himself at the stern of his yacht, docked out back of his 800 room mansion, from all the money that would pour in. He knew he needed money to put together a franchise system, so he went out to market, business plan in hand, to raise capital. To his great fortune, he didn’t have to look far, as an investor had been seeking him out. This was a dream angel investor, who was more concerned with the idea then the immediate return. Harry happily signed a deal with him for a big chunk of change, with a promise of a bigger chunk of change when he completed the first steps in his business plan.
With cash in hand, Harry went balls to the wall, working, hiring and spending. He did everything according to the business plan and was laser focused on doing the right thing, the right way. Finally everything was in place. Sure all the money had been spent, but a magnificent system had been built and they were ready to launch their, sure to be monstrous hit, on the world. All they needed was the second round of funding the investor had contracted for.
Unfortunately, Harry made the terrible mistake of thinking that money grows on trees and a well planted money tree always blooms. Harry’s Angel had been busy investing at the same time as Harry was building the business. As sometimes happens, the Angel’s investing hadn’t gone so well. When Harry approached the Angel for the contracted money, the Angel no longer had it to give; oops! Harry was dead in the water. His expenses were far too great to sustain until the business got off terra firma. Literally, dead on arrival, or was it.
As fortune would have it Harry was approached by a second investor. This guy was decidedly savvier and Harry had to make some sacrifices for the good of his franchisees, but he was wise enough to put his franchisees first. Today they are a thriving sophisticated franchise system with tons of successful entrepreneurs profiting from Harry’s original idea. No Harry doesn’t live in the mansion and his yacht is more like a couple of wave runners, but he sleeps well at night, has happy calls with his franchisees during the day and will likely never have to worry about money again. French Fry Heaven gained from Harry’s experience and though expensive we put together arguably the most advanced system of franchisee support, we did so with an eye on the future and our franchisees success.