The JoelPost. January 22,08 The "R" Word and Franchising

{www.Thefranchiseking.com}
If the US goes into an economic recession, do consumers still need products and services? Or, does the world stop?

Well, the world does not stop, and consumers still spend on things they need, and yes, even things they  want.  In a recent franchise consultation with a couple from suburban Cleveland, we discussed a couple of personal service businesses. We got into an interesting discussion concerning residential cleaning service franchise opportunities. I suggested to them that consumers who use a cleaning service for their home, were not readily willing to give up those services...even during tough economic times. Guess what? There was no debate whatsoever in my office, that morning. The better half of that particular couple cemented my observation on that subject by saying that I was right! She said, "There is no way I am giving up our cleaning service"! {By the way, the reason they were in my office in the first place was because the male part of the couple was downsized from his middle management position back in October}

So here we have an upper middle class couple from the robust Midwest {kidding} part of our country, who are in a rather unpleasant temporary financial situation, because of a downsizing, who are telling me that even with a salary missing from the equation, and no job prospects in sight, their cleaning service is not going anywhere soon. That tells me two things:

1. People are not willing to give up services that make their lives easier.

2. Small businesses that provide meaningful products and services will do just fine during an economic slowdown-recession.

One of my first posts this year was on a probable economic slowdown. Read.

In a post back in November, I discussed my prediction for our economy this year...The "R" word was mentioned. Read

I am not an economist. But I read a lot, and always watch the markets, the politics surrounding the markets, and I listen very carefully to the folks I meet with to discuss opportunities in franchise/small business ownership. Everything will be OK. Really. The world won't stop spinning. Money will still change hands. People will still invest in their own businesses. Consumers will still spend money.

Please feel free to add your comments today. I am curious to know how you feel about our economy, and it's direction.

{If you or anyone you know would like to discuss some alternative career options, and explore franchise/small business ownership, please call me at 216-831-2610 locally in Cleveland, or 1-800-460-8299 Toll Free, on our Franchise Line to discuss what trends in franchising could just work for you, this year. You can also email me at franpro@sbcglobal.net}   

Comments

[Laura Westenkirchner]

I am at the brink of obtaining a pet service franchise and I am worried about the economy. I formerly was a graphic artist, but before that I managed a large boarding stable (100 horses.) Never did we lose a boarder because they couldn't afford their board, but now when it is a hefty sum of my money I am worried about a recession.
I know I want to do this job, dog training, but am worried about my return on investment. A financial advisor told me that not only should I make a wage, but that I should see profit, that even if I didn't buy a franchise I would be making a wage and my money would be sitting relatively untouched and making me money. Is that the correct way to look at it?

[The Franchise King]

Hi Laura, Sorry about the delay getting back to you..had some typepad tech problems this morning..I am not sure what your advisor means, but getting into a biz of your own requires a long-term view of personal income. If you expect to make money right out of the gate, don't do it. Get a job. But..if you can take some risk now, in order to gain some possible equity in abiz of your own, make sure that the biz is the right one for you. You can call me at 216-831-2610, or in The US 1-800-460-8299 to discuss.
Good luck!
Joel Libava