The Future is Now
Tech franchises are hot. Whether you're teaching kids all about computers or consulting for big business, don't get left out of this great opportunity.
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The franchise industry is all abuzz, and the talk is abouttechnology-for good reason. Technology is paving the way to thefuture, leaving a need for entrepreneurs who can help lessen theimpact of today's rapidly widening digital divide. Stepping upto bat are technology consulting, service and training franchisesoffering a broad range of services, such as hardware repair,networking, software/security consulting and website development.We talked to some of the franchise players about what factors arecausing this demand, how the digital divide is shaking things upand why the time is ideal for franchisees in particular to enterthe scene.
People are becoming increasingly dependent on technology, usingcomputers for a range of activities from shopping online to findinglove. A 2004 survey conducted by the Stanford Institute for theQuantitative Study of Society determined that the average U.S.internet user spends three hours a day online. The internet hasactually caused a decrease in the amount of time these users spendwatching TV and doing other activities. The study also confirmedthat Americans are more connected than ever, with as much as 75percent of the U.S. population having access to the internet eitherat home or at work.
Chip Reaves, 35, national director of Decatur, Georgia-basedComputer Troubleshooters USA, a computer services and supportfranchise, has noticed that residential users have become a higherpercentage of the franchise's customers in the past two years."More home users are willing to pay to have us come out andwork on their computers," he says. "People are becomingso dependent on e-mail and [the internet], with kids using it forhomework and parents balancing the checkbook on it."
Businesses have also discovered an online presence is necessaryfor brand awareness and company sales. A 2004 survey by marketresearch firm Harris Interactive estimated that 70 percent of U.S.small businesses have an online presence, a sharp increase from theSBA's 2002 figure of 35 percent. "Technology not onlyhelps you run your business more effectively-sometimes it's theonly way you can do it," says Camille Hamilton, 44, who hasbeen a franchisee of on-site computer training and supportfranchise CM IT Solutions, based in Austin, Texas, for nearly fouryears. "When companies don't have internet access, thatcan impact their bottom line."
Long gone are the days when viruses only affected humans, andthe words spyware and spam were not a part of our everydayvocabulary. A 2004 survey conducted by America Online and theNational Cyber Security Alliance, a public-private partnershipfocused on promoting cyber security and safe behavior online,revealed that 80 percent of the users surveyed had spyware oradware programs on their computers. And this estimate isconservative-some surveys report numbers as high as 90 percent.These elements have forced computer users to face the sobering factthat, while computers can be helpful, they come with their fairshare of problems-which often require professional assistance. SaysHamilton, "Technology is becoming something the brother-in-lawcan't come in and fix on the weekends."
Naturally, the misfortune of some has become the fortune ofothers; and largely due to the onslaught of such problems,technology consulting franchises grew by nearly 50 percent in 2004.Franchises like CM IT Solutions, Computer Troubleshooters USA andExpetec Corp. are eager to come to the aid of frustrated computerusers. "It's not getting easier for people to dig theseworms out," says Lonnie Helgerson, 42, co-founder of Expetecin Aberdeen, South Dakota. "As we compete on what you'dcall an electronic scale with the internet, that's going tobecome a cost of business."
As a result, businesses are increasingly turning totech-oriented companies for solutions to their computer needs.Helgerson notes that the biggest growth in clients in 2004 camefrom small and midsize businesses, as businesses realized it'scheaper to contract with a tech company than hire a full-timecomputer technician.
Meanwhile, Reaves of Computer Troubleshooters USA believes thatcustomers tend to have more confidence in calling a franchise forassistance than an independent consultant. Says Reaves,"Working through a franchise structure, the customer gets alot of peace of mind that [he or she is] dealing with a credibleorganization, not just a fly-by-night operation."
Bridging the Divide
One of the main factors spurring growth in certain tech-relatedfranchises is the threat of an ever-widening digital divide betweenthe computer literate and illiterate. With the threat of thisgrowing gap, the spotlight is being directed toward educatingyouth, thereby bringing together two rapidly growing forces:technology and children. And as the forces meet, opportunitiesabound for franchises like Computertots/Computer Explorers, whichspecializes in offering technology education for schools, kids andadults. "There have always been four core subjects ineducation: social studies, science, math and language arts,"says Art Coley, CEO of Cypress, Texas-based CTCE. "Nowthere's a fifth subject-and that's technology. Technologytouches our lives every day."
For the past 20 years, CTCE has largely focused on servingchildren ages 3 to 12 in the private sector, includingindependently owned and chain preschools, child-care centers andprivate schools. Now, says Coley, the doors to the public schoolsystem are opening thanks to two factors: the No Child Left BehindAct, which prioritizes both technological fluency and use oftechnology to facilitate learning in the elementary schoolclassroom, and the fact that computer skills are quickly becoming arequirement in today's job market. "When we look ahead 20to 50 years, the difference between people around the world and inour country won't have anything to do with their age, sex,color, religion or gender," says Coley. "It's goingto have everything to do with technology-how we understand it anduse it."
Technological fluency has become crucial for living intoday's society, and it will only continue to grow moreprominent. CTCE is pairing up with KinderCare, a leading providerof child care and education, to become the technology provider atthe more than 1,200 KinderCare centers across the country. Toaccommodate the demand coming from all sides, CTCE plans to add aminimum of 50 to 100 franchises annually. Currently at about 100franchises, Coley says the company doesn't plan to stopexpanding until it reaches 500. "There are four-and-a-halfmillion preschoolers and 50 million children in [kindergartenthrough eighth grade] across the country," says Coley."Considering [that] today we serve about 30,000 children,there's plenty of room for growth."
Getting In on the Action
Becoming a tech franchisee might be appealing, but can also beintimidating due to the fast pace of the industry. However, thereare a few key facts that might ease your qualms.
First of all, franchisees can set up shop right from theirhomes, since most of the services offered by these tech franchisesrequire franchisees to go directly to their customers, not viceversa. CTCE's franchises are all homebased, and Reaves ofComputer Troubleshooters USA estimates that 90 percent of hiscompany's franchises are run from home. Reaves says potentialfranchisees like the homebased option since it helps keep startupcosts low.
For Hamilton, being homebased was a definite selling point whenshe was considering purchasing her CM IT Solutions franchise; infact, she was even more attracted to the franchise from a lifestyleperspective than a financial standpoint. Before getting laid off,Hamilton had been able to work from home for her previous job andhad grown attached to the lifestyle it allowed her to have. "Ihad been working from home for 18 months," says Hamilton."The whole idea of going back to the corporate grind wasreally nauseating for me." More than four years later,Hamilton is still working from home and loves it. However, shecautions people who are thinking of doing the same to examinewhether they have the space to be able to live and work out of thesame place as well as the discipline to clearly separate work timefrom personal time.
Secondly, contrary to what you might think, being tech-savvy isnot necessary for becoming a tech franchisee. More important thanpersonal expertise is finding dependable and knowledgeableemployees who are capable of handling service calls. ThoughHamilton is a tech whiz herself, having worked for 20 years incorporate IT organizations, she largely depends on her team of fivepart-time employees to tend to her customers' needs and stayup-to-date with all the technological developments. By building askilled team, Hamilton has also been able to build her sales to aprojected $200,000 for 2005, experiencing nearly 100 percent growthyear after year.
Finally, the structure and support of a franchise system cangreatly assist potential franchisees who fear the consequences ofstriking out on their own in such a rapidly changing environment. Afranchise system is crucial for helping tech franchisees staycurrent. CTCE has a team of people regularly updating itscurriculum and developing new materials as emerging technology isintroduced-including robotics, digital cameras and microscopes.Expetec and other franchisors use online forums to keep franchiseesup to speed with developments.
Times Are A-Changin'
In this era where spam fills our inboxes and new viruses arecapable of instantly wiping out a wealth of valuable information,staying abreast of technology has become crucial for computer usersof all kinds. Technology can open the door to success for abusiness, but being ignorant of the dangers and being unprepared todeal with problems can shut the door just as quickly. Franchisesoffering tech consulting, services and training are growingrapidly, offering more opportunities than ever. And franchisees ofthose businesses will find that the skills they possess and thesolutions they provide can be as valuable as gold.
On Your Mark, Get Tech, Go!
Pumped up about starting your own tech business? Begin yourresearch here with the following franchises:
New Horizons Computer Learning Centers
Concerto Networks Inc.
Geeks On Call America