New Zealand, at heart, is a nation of entrepreneurs. The tyranny of distance, added with the old number 8 wire mentality has created many a commercial endeavour. The economic and social conditions post COVID-19 will stimulate and feed this national inclination. For many the inclination will morph into franchising.
Why we will see a growth in entrepreneurship
Entrepreneurship – the propensity for people to go into or create a business for themselves – tends to be anti-cyclical to the economy.
This sounds counter-intuitive, but good times and full employment, coupled with a comfort level in the status quo, means fewer people are inclined to take the jump to business ownership.
At the other extreme end, which unfortunately we are now facing, with a recession and significant growth in unemployment as well as under-employment, many will have that push. The post COVID-19 recession will be very different to previous downturns.
Interest rates are low, many would-be entrepreneurs have created equity in property and at this stage they have access to capital.
Also, importantly, the world has suddenly got a lot smaller. Globalisation of the labour market has suddenly ceased.
We are looking at a potentially massive social shift. Few people knew what WFH stood for, or even considered this an option a few months ago.
As the workforce has had to come to terms with this new way of working, a great number of people will be reluctant to return to the daily commute, the stipulated hours and work environment.
Many have tasted having a greater control over one’s day, work and ultimately their own destiny, and will look at exiting the corporate world.
Why franchising will champion entrepreneurship
Growth of entrepreneurship and the growth of franchising will go hand in hand, and I suggest that franchising will both accelerate and take a starring role.
Franchising provides opportunities to use almost any existing skill set.
From cleaning to home loan brokerage, to building and hair styling, there is a franchise system that provides a traditional employee the opportunity to go into business for themselves applying their existing skill set.
If the decision to go into their own business has been one of necessity, this will be highly desirable for many of them.
A franchise system or framework provides the business tools, systems and support around a skill set, turning it from a job function to a business.
The business in a box approach means the incubation period for a start-up franchise business is likely to be shorter than a stand-alone and an established brand and marketing machine is likely to lead to a shorter period to break-even and beyond. Faster will translate to more growth.
The old franchise saying of being in business “for yourself, not by yourself”, has never rung truer.
The safety net and support of being in a franchise is no doubt being felt by many at the moment.
Not only have franchisors sought to support their franchisees, New Zealand’s franchise community has collaborated to seek out cross-industry solutions.
Moving forward, franchise systems will have the skill set and resources required to pivot and capitalize on the changing environment, outpacing the individual or corporate business.
The post COVID-19 New Zealand economic and social environment has created ripe grounds for entrepreneurship and the growth of the traditional New Zealand owned and operated business.
That could be the perfect environment for planting the seedlings provided by franchising.