Many candidates try to figure out if they can afford to quit their job and jump in and start their franchise business as full-time owners. They run numbers, calculations, and proformas. Of course it’s important to feel confident that you can afford to make an investment before you move forward… but in my experience, EBITDA is not everything.
A key variable in whether you can afford a franchise investment depends on how quickly the business will cash flow and what kind of money they make from a franchise business. My candidates often focus on the EBITDA of the business and exactly how much money they can make from this business so that they can leave their job and jump into the business. This approach is dangerous, unrealistic, and not necessary!
Sometimes franchisors will show the EBITDA of the business, meaning all of the expenses that come off of the gross revenue minus the taxes that the owner has to pay himself. It’s an unrealistic expectation, however, that you can walk away from the validation process of exploring a franchise and know what the net margin of a business is going to be. The reason it’s unrealistic is because YOU are the biggest determining factor in your success in your business.
Steer clear from that line of thinking. I want to empower you with a better approach. This better approach is something that I call the ‘Daly Plan.’
So, what is the Daly Plan?
The Daly Plan gets the owner focused on exactly what drives the greatest result in a business, rather than hyperfocus on a revenue number that doesn’t tell you what owners are waking up and doing, how hard they’re working to produce that number on the page, how many hours a day they have to put into the business to produce that financial result. When you understand what owners are waking up and doing, what skills are necessary to drive those numbers on a page, you have infinitely more information that’s going to help you decide if this is the right business for you. In this Daly Plan, I want to understand: what is the revenue goal that you want to achieve? You’re building a business for freedom, for control, to have that improved quality of life. So, if you want to have that improved quality of life, you must be disciplined to take the time away from your business.
You may be pondering: Well, if it’s that easy, why doesn’t everybody have a business the size that they want? Well, because it’s not always easy to stay focused on the plan. Sometimes, when you get momentum going in your business, it becomes easy to lose focus of that prospecting of the sales process. Whether it’s customer complaints, or employee issues, or other things, you react to them. As a business owner, it can be easy to lose sight of what’s most important: waking up and driving that activity.
All of this comes back to why validating an EBITDA; it’s so small in comparison to what I’m teaching you to do because the numbers on a page are just numbers on a page! They don’t mean anything! But when you’re validating with franchise owners, real information like this so that you can build a simple plan for yourself that helps you understand. If you want to have a two million dollar business, you need to double your numbers or three million dollar business, triple your numbers. But it gives you, with clarity, exactly how you have to perform to produce the numbers. It allows you to say yes a lot more confidently than just looking at a perfect pro forma—numbers on a page—that you have no understanding of what you’re going to be waking up and doing. It’s called working smarter rather than harder! Unsuccessful business owners would say, “If I could do it over again, I don’t know if I would.” It’s not necessarily a function of the franchise, or the toolbox, or the plan. It’s a function of their plan or their focus on their plan.
If you are exploring a franchise, and you’re trying to break down the earnings potential, and you now fully understand why validating net margins or EBITDAs really is a waste of your time, but you want more clarity with this Daly plan, this one thing will help advance your learning curve more than anything else during your franchise due diligence process. I know how to do this because I’m the inventor of the Daly plan. I was the first one to use this plan to create a history-making business, to replicate what I do so that there’s a science to what I do that I can teach other people.
It’s a millionaire mindset that I’m going for, and I want to coach you in that. If you are interested in learning more about the Daly plan and how I can coach you to that million-dollar or multimillion-dollar mindset, I would love the opportunity to meet you. Please contact me now for a FREE CONSULTATION using the form below!
