The American Dream is Alive and Well!

by Kapil Manocha, Consultant, The Franchise Consulting Company

What do Elon Musk (Tesla), Sergey Brin (Google), Jan Koum (Whatsapp), Vinod Khosla (Sun Microsystems) and Arianna Huffington (Huffington Post) have in common? They are all immigrants and they are entrepreneurs. Can you imagine what America would be like without them and hundreds of thousands of other immigrants who have started small businesses here.

TODAY 900,000 OUT OF APPROXIMATELY 4.9 MILLION SMALL BUSINESSES ARE OWNED BY AN IMMIGRANT (THAT’S ALMOST 1 IN 5!).

In fact, immigrants are the fastest-growing group of people achieving the American dream through small business ownership. According to the International Franchise Association®, immigrants are taking on a significantly increasingly role in the business environment. Today 900,000 out of approximately 4.9 million small businesses are owned by an immigrant (that’s almost 1 in 5!). Not only that, but immigrants are twice as likely to become entrepreneurs than nativeborn Americans!

One of the most popular avenues for many emerging entrepreneurs towards the path to business ownership is Franchising. This is also true for established entrepreneurs looking to diversify their investment portfolios. There are several reasons for this. For one, franchising provides a proven model of success.

The management team has made good and bad choices and fine-tuned the model by learning from their decisions. As a result, it reduces the risk and shortens the learning curve for franchisees. Franchise companies also have brand equity that has been built over time. This name recognition helps franchisees grow faster than they would had they gone it alone. Finally, franchisors also have systems in place – everything from partnerships with realtors to help find the ideal location, to architects and contractors to help with the build out, proprietary CRM software, marketing plans, social media platforms, computer systems, etc. – that come as a playbook so the franchisee can plug and play.

One of the largest population groups that intersects Immigrants and Franchising is Indian Americans. India leads the list of immigrant founders who have started billion dollar companies in the United States, according to a study done by National Foundation for American Policy, a US-based non-profit non-partisan public policy think tank. They make up only about 1 percent of the US population (about 3.9 million) but have disproportionate numbers of professionals such as physicians, corporate executives, and successful entrepreneurs. Their median annual household income is $100,000, which is significantly higher than other immigrant groups or the US population as a whole.

Economics Professor Nirvikar Singh, coauthor of The Other One Percent: Indians in America, also adds – “Indian immigrants who were shut out of corporate jobs and professions because of discrimination followed one classic immigrant path, starting out in retail, hotels, restaurants, and convenience stores. Nevertheless, many of them emerged as entrepreneurial success stories. Someone who started out working in a gas station might end up owning twelve of them." 1

There are many reasons Indians make successful entrepreneurs. For starters, they tend to be more daring and risk tolerant, considering they were brave enough to migrate to a new country, learn the systems, assimilate, and raise families here….it’s like a brand new start in life. They also tend to be extremely hard working. For many there is no boundary that exists between work and life. They are also likely to be resilient to stay the course until they achieve success. Another big success factor is the lack of entitlement. They don’t care if they had to skip an annual vacation one year or couldn’t visit a salon to get their nails done. They know all that will come with entrepreneurial success and they are comfortable with that delayed gratification.

One such success story is that of Leena and Yogesh Khandelwal. Based in Columbus, OH Leena and Yogesh own a successful Technology business. But success didn’t come easy to them. It was a lot of toiling, a lot of lows with intermittent highs, and a lot of sleepless nights. Leena recalls working 18 hour days and sometimes spending the night at work. All this while raising two kids without any family support. There was never any time to celebrate. But their hard work paid off. With the technology business well established and the kids in college Leena was ready to do something for herself. With a wonderfully supportive husband, and a bundle of energy herself, she wanted to start a new business…something she could call her own. Leena is a fitness freak and loves to work out. She is also a huge dance fan and accompanied her daughter (quite an accomplished dancer herself) to dance competitions. We talked about all of this and the choice was clear – Club Pilates® and AKT Dance®. Leena has partnered with both these brands and plans to open 6 studios in the Columbus market. Leena is a multi tasker and has the ability to be in ten places at one time. “She runs a 100 miles an hour. Sometimes I need to pull her back and say slow down honey”, laughs Yogesh. Leena has already opened her first 2 studios in January 2020. In fact, I just attended the launch of her AKT studio today!

ABOUT THE AUTHOR

Kapil Manocha grew up in India and worked in the Indian business environment, Kapil understands the culture, constraints, and excitement of doing business in India. He now resides in the US he has helped several Fortune 500 companies grow their business by identifying gaps in customer needs and delivering superior operational efficiency. kapil@ thefranchiseconsultingcompany.com

1 https://news.ucsc.edu/2017/06/singhbook.html