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Is Finance a Good Career Path for Owning a Business or Franchise?
Written by: Rongjie Zhao
Last Updated by
Ailen Faiad: March 21, 2023
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Download NowA career in finance-related industries like Investment Banking, Consulting, and so on is often a good starting point for newly graduated students. The experience in these jobs will bring graduates a new view of their careers and the industries and a rich experience in many respects. Today, we are going to discuss whether experience in finance will contribute to people’s success in owning a business or a franchise in the future.
Multiple Perspectives on Business Management
With experience in finance, people will have contact with many different cases. No matter whether they are successes or failures, they will learn from working with different business models, business ideas, leadership, and so on. This experience will inform them as they explore future opportunities.
Let’s see some study cases:
FitDog Sports Club
Andrea Servadio and partner Brandy Han launched Fitdog Sports Club, a premium dog care facility in California. Servadio was a banker in New York before launching the Fitdog Sports Club in California in 2008. Then she quit her previous job because of the financial crisis. Then, because of her passion for pets and her love for California, she moved to California and opened the Fitdog Sports Club. The pet sitting industry were extremely lagging at that time in California, and it was far less developed than the industry in New York. Servadio grasped this opportunity with her passion. However, things did not go well all the time. In 2011, they found that staffing was a serious problem. Nearly half of their handlers left, which created great challenges.
Because of this, Servadio reconsidered the traits and training in the company based on her past experience. She realized that all successful companies own their training system to retain employees and create a unique but stable working environment in the business. Hence, she improved the treats and training system in the company. They gave employees more responsibility, which required the company to invest more. The company now has monthly meetings, which allow staff to air grievances as well.
The monthly meeting rule in Fitdog Sports is just like the daily meeting during Servadio’s career in finance. Because of this improvement, Fitog’s workforce now is stabilized at 16 staff members. Furthermore, because of the success of this system, which is based on her experience in the finance industry, to a certain degree, Servadio is planning to hire more in the future, and she also has the confidence to retain even more staff in the future.
Legacy Capital Partners
Aneil Lala and Neal Wadhwa formed Legacy Capital Partners, but they made an unexpected acquisition. They acquired 10 Wendy’s restaurants. Which ranked No. 14 on the Franchise Times Top 500, in Maine, where they hope to use their experience in management gained from their finance experience to empower employees. Since their acquisition of the 10 Wendy’s restaurants, they have grown the EBITDA by almost 60 percent and raised the customer satisfaction scores from the mid-70s to the low 80s.
Good strategy leads to good results
Additionally, the servers in fast food restaurants are always unstable. And the turnover rates are always extremely high, but with their new system of management, they have been able to bring the turnover down to 82 percent, even though the turnover rate is as high as 150 percent in the fast food industry as a whole. After the acquisition, they tried to humanize the business, as well as pay competitively and look beyond compensation to build a culture of engagement. These are all important strategies in a finance company. Finance companies use high salaries and positive company cultures to try to retain their employees and attract new ones.
Specifically, after the acquisition, they revamped the employee benefits program and opened up healthcare coverage to all employees. These have given the employees the feeling that they are cared for by their employers. Which increases their passion for work. Thanks to these efforts, not only did they get lower turnover rates, but they also increased the participation rate in the restaurant, which now is 80 percent.
Willingness to Take Risks and Accept Failures
Neel Patel founded his skincare brand Après Pacific because of his personal experience as a teenager who suffered from acne. Which caused him both mental and physical trauma. When he set up his own brand, he realized that it was important to broaden the distribution of his brand. He learned from his experience in finance that no matter how good the product or service is, if no one knows about it, the business or the franchise is destined to be a failure.
When he decided to set up his own brand, people thought that he was crazy to leave his lucrative financial career. His decision wasextremely risky for him, as the future of his brand was not as clear and bright as his career in finance. However, in his experience, he learned that “no risk means no gain.” He decided to take the risks and do the things that he was interested in and had a passion for. Thanks to this courage, possibly gained from his experience, some of his former colleagues who thought he was crazy for taking this risk see how the brand has quickly evolved and gained great traction.
Additionally, in the beginning, although Patel had a strong finance background, he had never started an e-commerce brand before. However, with his experience in the Finance industry, he learned that people can not avoid mistakes. As they will always happen. The important thing is to be open about your mistakes, learn quickly, and adapt. His positive attitude in dealing with potential mistakes has given him the opportunity to correct them. And improve the business model of his brand.
Red flags of Finance
When working in finance-related industries, people are forced to face many inevitable risks. They might have to face the risk of a failure in investment in stocks. Failure in assisting a firm to complete their IPO or merger and acquisition process, and so on. However, through their everyday “training,” they know that risks are the beginning of success. And they also know how to deal with the risks and their potential failures.
Therefore, a finance career will contribute to several aspects of owning a business franchise in the future. Like the multiple perspectives in management and the willingness to take risks and accept failures.
