TGA's 10 Year Story

The following story was published this week in TGA's newsletter and on our website.  Hope you enjoy.

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My name is Steve Tanner and I’ve been with TGA since the company was launched in 2003, hired first as an overnight camp counselor, then as a coach, then as the first full-time employee, and now as COO and one of two equity partners. 

To kick off our 10 year anniversary celebration, I wanted to tell the story of how TGA came to be what it is today through my eyes.  But the story of TGA goes back much further than 10 years, beginning in the early 90s like so many other entrepreneurial journeys with the simple notion of “I wish _____ existed because it would be awesome and I’d be all over it.”

This was the thought Joshua Jacobs had as a teenager growing up in Los Angeles.  Josh was a competitive and accomplished junior golfer – AJGA, college, the whole nine yards.  But he found junior golf to be so SERIOUS.  He went to a variety of overnight camps as a teenager and had a good experience but never did what he was truly passionate about – play golf.  If only there was an overnight golf camp that traveled to great courses but focused first and foremost on making friends and having fun.

After graduating from Emory University, Josh’s early career path took him to New York City where he worked for an AV company and lived in Hoboken, NJ.  It was from his apartment that he watched the atrocity of 9/11 unfold across the Hudson River.  Like all of us, the tragedy made him reflect on what was important.  More than anything, he missed his family back in Los Angeles so he packed his bags and moved home.  

In reflection, all of us involved with TGA hope that the daily impact our organization has on kids and communities across America has become one of the many stars that shines today in the darkness of that time in 2001.

Wondering what to do next with his career, Josh sat down with his family – which includes several generations of accomplished entrepreneurs – and was encouraged to follow his dreams.  With the support and mentorship from his grandfather Lee Warner and father Michael Jacobs, Josh thought back on his idea for an overnight golf camp and decided to take the plunge of trying to create as an adult that which he wished for as a kid. 

Teen Golf Adventures, LLC was incorporated, camps were scheduled for the summer of 2003, a few kids signed up, and the company was officially in business.  That first summer went well all things considered, but as it wore down Josh found himself thinking about how he was going to generate revenue over the next nine months until it was summer again.

The answer came in the form of the after school golf enrichment program that has been the catalyst for bringing TGA to a 10 year anniversary and introducing 225,000 kids to golf and tennis.  But, ironically, it was conceived almost by accident.  One evening in early fall, Josh found his elementary-aged sister reviewing her options for after school enrichment programs for the upcoming school year.  He asked, “is golf an option?” to which she responded, “nope” … and the light bulb turned on.  Golf at schools would solve so many of the problems that keep kids from trying the sport – transportation, information, cost … it just made so much sense.  Josh bought some clubs, put together a curriculum, got six schools in West Los Angeles to agree to offer a program, and off he went.

The program grew quickly, from 6 schools in the fall session of 2003 to 13 in the winter and 18 in the spring season.  Enrollment was great.  Demand grew.  Summer day camps came in 2004, along with a multi-level program and more and more schools.  But it wasn’t for almost two years that anyone understood the magnitude of what Josh had created.  That happened when people started calling the office to ask how they could start the program in their region of the country.

We started by licensing the curriculum and trademarks but quickly learned that we needed to provide business support as well, so we filed our first Uniform Franchise Disclosure Document in 2006 and became a franchisor.  Our market evolved from Los Angeles to the U.S. and now to the international community.  First-of-their-kind training programs, curriculums, student handbooks and software systems were developed.  Golf’s sister sport, tennis, became an opportunity and then a reality.  A 501c3 Not-for-Profit was birthed.  So much has happened in the past 10 years, it’s too long of a story to tell but also too much of a blur to really tell correctly.  But the vision has always remained the same – make golf and tennis accessible for all kids and provide a fun, positive experience that instills a passion for the sport within each student and then provides opportunities for them to pursue that passion.

And this is what gets us so excited about where we’re at and where we’re headed as an organization.  TGA is a family of entrepreneurs and we’re not great at reminiscing or sitting still, so we currently have our foot on the accelerator doing things like:

• Building a management team for the TGA Sports Foundation after receiving a generous grant from a TGA vendor, with the goal being to exponentially increase financial aid and scholarships offered to under-resourced kids.

• Preparing to open new international markets in 2013 while YTD new franchise openings in the U.S. have been double any previous year.

• Securing and activating major industry partnerships that will change the way the company looks when we celebrate our 15 year anniversary.

• Continuing to expand our HQ team, soon to be more than double what it was two years ago, with awesomely talented and passionate individuals like Nate Wright, LeeAnn O’Donnell, Bradley Fontaine and Patrick Yarrow giving everything they have to the organization every day.

We continue to push harder and further because we have a unified vision – the belief that we have successfully pioneered a critically important model that breaks tennis and golf’s traditional barriers, can reasonably be scaled to every school and child in America (and beyond), and is something that has proven to add significant value to our students, parents, schools and partner golf and tennis facilities, as well as the industries and communities we serve.

While ten years is a milestone, we are far from satisfied.  Still, less than 4% of kids in the U.S. play golf and tennis.  That is unacceptable.   And we are doing everything we can to break down the barriers and solve the problems quicker and better than ever before.  Ten years from now when we celebrate our 20 year anniversary, we fully expect to have 10x the impact we’ve had so far.  Please hold us accountable to this goal.

But today, we’re pausing for a moment to celebrate the journey that brought us here as it has been paved by thousands of amazing and dedicated individuals, most importantly our instructors and franchisees.  TGA has reached the point where it is above any individual or team – it is the brainchild and creation of everyone who has contributed in their own way, big or small, to making the organization what it is today – 70 franchises, 225,000 kids empowered, thousands of jobs created, 2,500 schools impacted, and much more.  For that, I speak for everyone at TGA HQ when I say THANK YOU!

I’d like to close by recapping the journey our three favorite letters, TGA, have taken over the past 10 years.  In many ways, their evolution tells the company story on their own:

2003: TGA = Teen Golf Adventures

An overnight golf camp for teenagers.

2004-2006: TGA = Total Golf Adventures

Shift to after school programs for kids primarily 5-10 years old.

2007-2011: TGA = TGA Premier Junior Golf

Making TGA nothing more than an acronym because “Total Golf Adventures” made us sound more like a travel company than a school-based junior golf organization.

2011: TGA = Tennis & Golf Adventures

Marking our expansion into tennis.

2012-Present: TGA = “Teach Grow Achieve”

Coming to a clear understanding of TGA’s identity as a youth enrichment organization that marries athletics with academics, and applying an appropriate meaning to “TGA” that we believe will last for decades worth of anniversaries.

Thank you for listening to my version of the TGA story and offering your continued support to our organization.  Cheers to a great past, a brighter future and always remembering to KEEP SWINGING!  

Create, Know & Obsess About Your KPI's

Please note that a variation of this blog catered towards franchise candidates first appeared in the Franchise Business Review.  You can read it here.

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1.    Efforts made in marketing (i.e. Are you doing the work?)

2.    Conversion Rate (i.e. How effective is your message?)

3.    Profitability

A good set of KPI’s addresses these three topics. 

If you’re running a business, your KPI’s should be central to your thoughts and actions at all times.

If you’re thinking about starting a business, figure out what your KPI’s will be in advance so you can make an honest assessment of the opportunity.

If you’re analyzing a business as a potential investor or franchise candidate, ask about KPI’s to quickly ascertain the health and key drivers of the business model.

Hopefully this outline provides some guidance on recalibrating or creating these incredibly important measurements which will serve as the lifeblood of your business.  Good luck and happy entrepreneuring.

In working every day with current and aspiring entrepreneurs I often find that metrics and data don’t receive the attention they should.  I often hear comments like – “How much money can we make?” or “How long will it take to do so and so?” but these are cursory questions that often don’t scratch the surface of a business model.

Every business, whether real or in creation, has key revenue and expense drivers.  All entrepreneurs should translate these drivers into “Key Performance Indicators” (“KPI’s”) or something similar to measure the company’s performance.

KPI’s are the heart, brain and central nervous system of a business.  Want to know if you’re investing your time and money in the right places?  Know how these investments relate to your KPI’s.  Want to know when to crack open the champagne or hit the panic button?  Know the ceiling and floor of each KPI and create reasonable goals/milestones.  Want to know if a key employee is the right person for the job?  Look at their impact on the KPI’s relative to what they’re costing the business.  And so forth.

I was speaking recently with Brian Destarac, a business coach and founder of Cobalt Business Solutions, and he had a great outline for looking at KPI's that I wanted to pass along.  He identified three categories:

TGA is Now TENNIS & Golf Adventures

I’m pleased to announce that TGA has officially launched a second franchise company called TGA Premier Youth Tennis that closely replicates the model of TGA Premier Junior Golf.

The decision to enter the tennis industry has been under consideration for at least a year and it brought up a host of issues that drilled to the core of our company and its entrepreneurial spirit.  I wanted to share some of them with the hope that they’re applicable to you as you consider, pursue and/or manage your entrepreneurial endeavors.

Core Competency – What is the company really good at? 

Most people think of TGA within a golf context – that we’re really good at running golf programs on elementary school campuses.  For many years, we saw ourselves in this way too. 

But as the company evolved, we recognized that anyone can walk onto a school campus and try to teach golf.  Many have.  But no one has achieved anywhere close to our type of size and impact.  The reasons for this are twofold – 1) we created a viable business model for scaling a school-based youth sports business; 2) we focused heavily on being an “enrichment” program – i.e. building a classroom environment with instructors trained on educational concepts who deliver programs that include character development, life skills, physical activity and the integration of academic subjects such as math and science. 

Thus, our core competency is not about golf but rather the ability to deliver enrichment programs through a business model that is viable, replicable and scalable.  As such, we believe that any popular sport/activity not traditionally done on a school campus (e.g. tennis and golf) can be plugged into this model with success.

I believe that understanding a company’s core competency is probably the single most important factor to building long-term sustainable growth and I’m confident that we got it right.

Organizational Values – What does the company stand for?

Everyone involved with TGA is hugely passionate about golf.  Most people get involved with us to pursue this passion and it's one of our single most unifying values.  However, while some of these folks are also tennis enthusiasts, just as many are not and have no emotional interest in being involved with a tennis company. 

We put tremendous thought and research into whether a voyage into tennis would fracture the foundation of our organizational values.  We determined that the answer is “no.”  The reason is because we believe there is a deeper value we all share than golf, and that is a stronger passion to positively impact kids, families and the communities we serve.  We feel that tennis adds opportunities for us to do this in greater scale and effectiveness.

Additionally, franchise law forced us to offer tennis as a separate franchise from golf so people can choose which programs and passions they want to pursue – golf, tennis or both. 

I believe that having a corporate identity with clear core values is critical to building a strong organizational culture and I think tennis keeps ours intact while offering opportunities to make it stronger.

Risk vs. Opportunity – How much are we willing to gamble?

We ran pilot-programs for tennis in six markets nationwide and the early results were encouraging, albeit preliminary.  Then, various opportunities of high intrigue within the tennis industry started arising as people took note of what we were doing.  Joshua Jacobs, TGA’s CEO and my friend/partner, is an ambitious visionary who operates mostly based on experience and instinct so he wanted to move full steam ahead.  I am more of a quantitative, process-driven individual so I wanted to proceed slowly, if at all.

Ultimately, I remembered something my dad always says which is: “Things either get better or they get worse, they don’t stay the same.”  And I think that is very relevant here.  Josh was right – we have an opportunity to do something great with tennis and opportunities like this are few and far between.  So we compromised by slowing him down and speeding me up. 

Yes, there are definite risks and significant challenges with our decision.  But we’ve been diligent about our preparation and feel confident with our decision.  And that’s the key – understanding risk tolerance and making educated decisions.  For us, it’s time to take the leap and see what happens.  “Ready Fire Aim.”

Or, as we say at TGA, “Keep Swinging!”

"Owner's Discretionary Income"

Everyone wants to know the same thing when analyzing a business – what’s the profit?

Prospective business owners want to know a company’s earning potential.  If analyzing a franchise, candidates should (and often do) ask existing franchisees how much money they’re making and what the financial viability of the system is.

Business owners want to know how much value they’re deriving from the company.

Investors, board members, franchisors and other interested parties want  to know the operational efficiency of the business.

The problem is that determining “profit” isn’t as simple as looking at the bottom line of a P&L – especially when analyzing a private company like TGA Premier Junior Golf that is usually home-based with a single owner/operator.  That’s because the P&L often includes a variety of benefits to the owner that are entered as expenses, such as an owner’s salary/draw, entertainment, etc.

At a recent conference, I learned of a financial calculation from a fellow franchisor that solves this problem.  It’s called “Owner’s Discretionary Income.”  Here’s the equation:

company profit (Net Income line of the P&L)

+ owner’s salary (including draw, dividends, etc.)

+ fringe benefits (things you’d likely pay for out of your own paycheck if not a business owner)

= Owner’s Discretionary Income

This calculation tells you exactly how much value a business is delivering to its owner.  It also tells you how well the business is functioning from an operational standpoint.  That, in my opinion, makes it extremely relevant and important for business owners and prospective entrepreneurs alike.

Perception Trumps Reality

I attended a “Franchisor Boot Camp” last week in Denver that was hosted by Greg Nathan, a well-respected expert on franchising and psychology.  The goal of the conference was for franchisors to learn techniques for building more profitable partnerships with their franchisees.  It was a great learning experience with lessons that apply to both business and life, and I’ll likely touch on many of them for a long time in this blog.

One of the first and most frequent things Greg Nathan said was:

“When perception meets reality, reality comes in second place.”

This resonated with me because I recognize it as being very true but it’s a difficult concept for me to wrap my mind around. 

“Reality” is defined as the state of things as they actually exist, rather than as they may appear or might be imagined.  “Perception” is defined as the process of attaining awareness or understanding of the environment by organizing and interpreting sensory information.

My tendency is to look at facts, analyze them in black/white terms and come to a logical conclusion.  Meaning, I focus on “reality” and place a lot of value on it.  And I’m a big believer in taking responsibility for this reality.

What can be missed in this process, however, is an analysis of how people perceive these facts/terms/conclusions.

For example, when a franchisor rolls out a new initiative, have they taken into account how the franchisees will receive it?  Let’s say the initiative will create long term value but it requires an initial investment of time and money.  How will the franchisee feel when he hears about this required investment?  Maybe his cash position is strong so he sees it as a great opportunity.  Or, maybe his margins have been squeezed during the recession, the financial stress of which has caused stress with his spouse, and this new expense will be perceived as the proverbial “straw” that breaks not only the business, but the marriage. If the franchisor is unaware of this, the messaging and execution will be way off.  Now, while the franchisor feels good about themselves for this new initiative, the franchisee blames the franchisor for ruining his business and his marriage.  The seething franchisee then becomes vocal about his disdain for the franchisor and starts eroding the culture of the entire organization.  Meanwhile, the franchisor doesn’t know what the hell just happened.  They deployed an initiative that creates long term value, which is what the franchisees pay royalties for, right?

This is extreme, but it demonstrates how a mismatch between reality and perception can spin out of control pretty fast.  Whether you’re a franchisor, franchisee, entrepreneur, manager or anyone else in the workforce, you can probably think of your own similar examples.

So how do we build a better understanding of people’s perceptions?  According to Greg Nathan, the answer is to connect with them on a personal, human level.  Talk to them.  Ask questions.  Understand what’s going in their lives.  How are they feeling?  What are they nervous, excited, etc. about?  Let them tell you where they’re coming from.  Empathize, and be authentic.  Not only does this help you understand their perceptions, it develops trust and commitment.  And this makes all the difference in your ability to communicate, assist, lead and motivate.

Developing healthy relationships is a critical component of business success, especially for an entrepreneur when the company is young and fragile.  Understanding that perception often trumps reality is a key part of building these strong, healthy relationships.  I’ve added another post-it note to my desk to remind me of this “reality” and hopefully the advice helps you too.

Are COO's Really Needed?

Mark Suster wrote a blog last week about the role of COO's in startups and basically argued that they're not needed. You can read it here. He got such a strong flood of opinions in response (check out the comments) that he wrote a follow-up this weekend, which is here.

As a COO myself since 2006 of what for many years was a startup (and some could argue still is), and as an avid follower of Suster's blog,I found the discussion quite interesting. I don't want to argue the merits or lack thereof of Suster's comments but rather touch on a bigger issue. The one that I think Suster was really getting at.  And that is the role of building a management team at a startup.

It is well chronicled in the annals of entrepreneurship that success of a company is determined by the management team. Great ideas come and go, strategies change and competitive landscapes shift. These are all things that are inevitable. Successful companies aren't the ones with a great start out of the gate but rather the ones with the personnel to manage this ever-changing path and stay a step ahead of the others.

I interpreted Suster's point as being that it's important to have razor-sharp focus with your employees and ensure that investments in employees are producing maximum returns.  His assertion is that COO's are like Chiefs of Staffs to the CEO - and in a startup, is that really necessary when you need folks focused on sales and marketing, product, engineering, business development and finance?

I agree in principle with Suster's point while at the same time defending my title of COO as being accurate.  In a young company, all employees wear several hats and mine include corporate strategy, franchise development and operations management. COO fits that job description better than "VP of Sales or Franchising or Business Development." And I think that’s the thing with the COO title – there isn’t a clear-cut job description and the roles look differently from company to company.

So are COO's really needed? Well, it depends. When it comes to your startup, I encourage you to look hard at the duties you need as opposed to hiring based on preconceived notions of the titles you need. Then hire accordingly.  Some of you may need a COO while others may not.  The key is to invest in employees who have job responsibilities that provide the greatest return to the company. And at the end of the day, titles within a startup are mostly inflated and don’t make a lot of sense anyways. It’s the job function that counts.

Given the importance of management teams and the reality of limited funds and resources at a startup, it's imperative that you get your initial hires right. That, I think, was Suster's point ... And as a COO, I agree with it 100%.

Franchisees are the QB & Franchisors are the Coach

(Please note - this blog originally appeared on the Franchise Business Review website and you can read it here.)

We were reviewing franchise performance at TGA Premier Junior Golf recently when the conversation shifted to the universal components of the top performers – the crème de la crème.  There were three:

1.    They get out of TGA what they put in (an adage hugely relevant to franchising), and they put in a lot.

2.    They follow the model. 

3.    They are engaged in the system.

As the discussion transitioned to what we at HQ can do to better facilitate these qualities, we found ourselves engaged in an age-old conversation about the role a franchisor plays in managing its franchisees. 

On one hand, we take personal responsibility for the success or failure of each franchisee and our instincts are to do everything we can to help.  On the other hand, each franchisee is the owner and boss of his or her TGA franchise, so we at HQ have to respect the fine line between being supportive and overbearing.

My colleague LeeAnn O’Donnell made a great analogy for this relationship that really stuck with me.  She said: “Franchisees are like the quarterback and we’re like the coach.”

Yes, exactly.

Coaches utilize years of experience and proven results to create the game plan and in-game support.  The franchisor.

Quarterbacks combine the coach’s game plan, natural talent and years of skill development to lead the team to success.  The franchisee.

Coaches/franchisors cannot control a QB's decision-making and actions during a play - nor should they want to.  But, they can provide a strong system that a great QB can become a legend in (i.e. Tom Brady, a 6th round draft pick, winning three Super Bowls with Bill Belichick) and an average QB can execute with success (i.e. the Baltimore Ravens winning the Super Bowl with Trent Dilfer).

If you’re thinking about starting a franchise, I encourage you to consider three questions:

1.      Are you a QB comfortable with leading a team of role players (your employees) while shouldering responsibility for the execution and ultimate success/failure of your business?  If yes, proceed to #2.  If no, then employment with an established company is likely a better fit for you.

2.      Are you a team player who wants an experienced coach creating the game plan and helping you out?  If yes, proceed to #3.  If no, then starting a business alone from scratch is likely a better fit for you.

3.      Is the franchise system you’re considering a Bill Belichick (great), a Lovie Smith (decent) or a Josh McDaniels (poor)?  How does this match up with your own talents? 

a.      If you’re highly experienced, you can likely succeed in most competent systems, whether it’s Belichick or Smith’s, so you should probably pick whichever business is a better personal fit. 

b.      If you don’t have a lot of business experience, you can likely succeed with Belichick but you may struggle with Smith. 

c.      Under no circumstance should you continue looking at a Josh McDaniels system.

If you answered “yes” to the first two questions and your talents properly align with the quality of system in question 3, then you very well may be looking at a great business opportunity. 

Good luck and happy entrepreneuring.

Let's Solve Pains & Problems

Summer at TGA Premier Junior Golf is synonymous with one word for me – sales.  I’m responsible for the company’s franchise development and this is always our busy season as franchise candidates want to start the business prior to the new school year.  This year we decided to significantly increase our advertising budget, so the quantity of leads is even larger than normal and the profile of inquiring candidates has changed due to these efforts.

Thus, right now I’m doing little besides thinking about – and talking about – sales.

Sales skills are worth developing because everything in the professional world involves them.  Whether you’re selling a product to a customer, selling a service to a business, selling a co-worker on the best way to do something, selling a superior on a project idea – everyone in the workforce is selling something to someone. 

And sales is not the dirty concept that many make it out to be.  When people think of sales, they often think of that caricature of a slick, slimy and shady used car salesman.  But in reality, sales is a beautiful thing.  It generates the revenue that makes business possible and creates the jobs in finance, accounting, HR, etc.

Additionally, the best salespeople are a customer’s best friend because they solve problems and kill pains.  How great is that?

I’ve been fortunate to have had several recent conversations with folks who are very talented at sales.  Since this is the lifeblood of any entrepreneurial endeavor, I wanted to share with you a couple of the key points (in addition to the 10 Commandments of Sales featured above, which I LOVE) that have been helpful to me.

Sell to a Pain

Figure out what the customer’s pain/problem is. 

Sometimes the pain is obvious – i.e. a lady goes to McDonald’s because she is hungry. 

Sometimes the pain is not obvious – i.e. a lady goes to a car dealership … but why?  Is she starting a family and in need of a bigger car?  Has her old car deteriorated to the point where she needs a new one?  Is she going through a midlife crisis and in need of a sportscar to make her feel better?  Was she recently laid off, causing her to need a cheaper car?  Did she get a big promotion and now she wants to show off her new status class?  Etc.

The best way to sell to a pain is to ask questions and engage the customer in a two-way conversation.  Focus not on the product’s features or your standard “pitch,” but rather find out what pain/problem is driving the customer’s motivation to talk to you – and then focus on how your product or service solves that pain.

Some great initial exploratory questions for the customer (with the corresponding question being answered for the salesperson in parenthesis) include:

• What brings you in today? (What’s the pain?)
• What about this product/service caught your attention? (What features of our product/service should I focus on?)
• Have you been looking at other similar products/services?  If so, which ones and what have been your feelings so far? (Who am I selling against and how much do they know about the market?)
• Are you looking into this for you or someone else? (Is it your pain or someone else’s I need to solve?)

Earn the right to learn about the customer

Customers control the money and usually have many options, so they come to you, the seller, seeking information.  They expect to be the one asking questions.  They expect to be sold.  They do not expect to be the ones getting interviewed. 

Thus, you have to earn the right to dig down into the secondary and tertiary levels of their pain and their subsequent motivation for talking to you.  To do this, you need to build a level of comfort and trust.  Be an expert on the company and product.  Be friendly.  Show that you’re concerned with solving that person’s problem, not with making a sale (which sometimes requires pointing them in a different direction if you’re not a great fit).  Most importantly, be authentic.

A good process to follow when working with a customer is this:

1. Start the conversation by speaking generally.  Focus on the typical pains your product solves.  Speak passionately.  Get the person excited.  Stay at a 50k foot level.
2. Ask a few gentle questions (reference above).
3. Provide a brief overview of the company and product.
4. Ask questions as a lead in to talking about features.  i.e. “Do you listen to music a lot when you drive?”  If the answer is “yes” you know to highlight the awesome stereo system.  If the answer is “no” you know to move on to other features that the customer will find more relevant.
5. Work on the customer’s timeframe and don’t be pushy about changing it.
6. Say what you do and do what you say.

Keep in mind that everyone in the workforce is a salesperson to some degree and sales is about solving pains and problems.  If you approach sales with this mentality and are authentic about wanting to help people - whether it's a customer, colleague, supplier, superior, etc. - you’ll likely see a lot of long-term success in the business world. 

I hope these thoughts help you down the road to happy entrepreneuring.

The Franchise Option

I’ve been asked to guest blog for the Franchise Business Review (FBR) and I just wrote the first two posts as I travel from Charlotte to LA.  Thus, my mind is thinking heavily about the role franchising plays in entrepreneurship - and it is huge. 

I haven’t talked about franchising much on this site so I’m going to repost my blogs for FBR here as they’re published.

I recently came across a fantastic book (hat tip to Mark Suster) called “Do More Faster.”  The book covers seven main topics in entrepreneurship through short stories written by founders and venture capitalists who are involved with TechStars.

One of my favorite vignettes is titled “Trust Me, Your Idea is Worthless.”  The key line in the story is: “Entrepreneurs (often) overvalue ideas and undervalue execution … one can steal ideas, but no one can steal execution and passion.”

This describes the value of franchising to a T.

I’ve heard many people say: “I want to be an entrepreneur … I’m just waiting to think of that big idea.”  With franchising, you don’t need it.  The “big idea” is already established.  Your investment is in a proven business model where your chances of executing well are strongly enhanced.  And, it’ll likely cost you less than trying to start something on your own.

As a result, the U.S. Department of Commerce has found that 90% of franchises continue operation after five years as opposed to less than 25% of privately owned start-up companies. (Stats here)

Why?  Because franchisors have a tried-and-true model in an established market with identifiable customers.  When you buy a franchise, you leapfrog the first several huge obstacles most entrepreneurs face.  At TGA, we weren't profitable for several years  ... but our franchisees are mostly profitable in their first year because they immediately obtain the blueprint we spent a lot of time and money designing.

The downside to franchising is that you’re one part of a bigger system so you’re likely not going to change the world alone … and you have to deal with the franchisor, who thankfully isn’t a boss but acts like an uber-protective big brother.

Franchising doesn’t guarantee success because it always comes down to execution.  A franchise provides the blueprint and tools to build a castle.  Ultimately it’s up to the franchisee to pick up those tools every morning, follow the blueprint and build.

If you want to be an entrepreneur, franchising is an immediate, viable and less-risky alternative to waiting for your big idea and starting something from scratch.  It’s not for all but is great for some, especially first time entrepreneurs.  I look forward to further discussing the topic on this blog and for the FBR.