Franchise Your Business

Numbers Don't Lie: Why 77.8% of Budding Entrepreneurs Say "Start Now"

• Big Sky Franchise Team | Tom DuFore

Share episode

This is a recording of a live webinar recorded on May 23, 2025, starting at around 2 PM Eastern Time USA.   

Ready to talk about franchising your business or help with your franchise efforts? Book a complimentary consultation with one of our consultants: https://bigskyfranchiseteam.com/consultation-routing/#call

Subscribe to our other podcast: Multiply Your Success: https://www.multiplyyoursuccesspodcast.com/

Subscribe to our other podcast: Franchise Your Business: https://open.spotify.com/show/7Ff8rTBR1Oykv4dIOOBdhn

Links from the episode are here:   

  • https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/ 
    • https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/pmi/t4iff202504pmi.pdf
    • https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/nmi/apexrob202504svcs.pdf
    • https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/hospital/sprtrob202505hos.pdf
  • https://tradingeconomics.com/united-states/unemployment-rate
  • https://tradingeconomics.com/united-states/inflation-cpi
  • https://www.sca.isr.umich.edu/files/chicsr.pdf
  • https://www.census.gov/econ/bfs/current/index.html
  • https://www.uschamber.com/sbindex/summary
  • https://www.vistage.com/vistage-ceo-confidence-index/
  • https://www.guidantfinancial.com/small-business-trends/
  • https://www.linkedin.com/pulse/entrepreneurs-agree-now-much-better-time-startups-than-bkjie/?trackingId=1DQPHtzvzHEEIgElg8OyNw%3D%3D

In our latest Franchise Your Business podcast, we analyze current economic indicators and their impact on franchise development, revealing a stable economy with significant entrepreneurial interest despite mixed signals from manufacturing and consumer sentiment.

Per the links provided and data sources cited in the video:
• Manufacturing PMI at 48.7%, showing contraction but with improving trend compared to last year
• Services PMI at 51.6% and Hospital PMI at 55%, indicating overall economic expansion
• Unemployment rate steady at 4.2% with improving labor force participation
• Inflation decreased to 2.3%, lowest since February 2021
• Nearly 450,000 new businesses formed in April, showing strong entrepreneurial interest
• Consumer sentiment dropped sharply, potentially due to recent tariff impleme

ABOUT BIG SKY FRANCHISE TEAM:
This episode is powered by Big Sky Franchise Team. If you are ready to talk about franchising your business you can schedule your free, no-obligation, franchise consultation online at: https://bigskyfranchiseteam.com/ or by calling Big Sky Franchise Team at: 855-824-4759.


The information provided in this podcast is for informational and educational purposes only and should not be considered financial, legal, or professional advice. Always consult with a qualified professional before making any business decisions. The views and opinions expressed by guests are their own and do not necessarily reflect those of the host, Big Sky Franchise Team, or our affiliates. Additionally, this podcast may feature sponsors or advertisers, but any mention of products or services does not constitute an endorsement. Please do your own research before making any purchasing or business decisions. References to external data sources, studies, statistics, or other third-party content are not claimed as our own unless explicitly stated. We do our best to provide proper credit and citation where due. If we unintentionally fail to cite or credit a source, please let us know, and we’ll gladly correct it and provide the appropriate acknowledgment."

Tom DuFore:

All right, everyone. Thank you for joining us for another edition of our Franchise your Business podcast and webinar series. My name is Tom Dufour. I'm the founder and CEO of Big Sky Franchise Team and this session is always a fun session. This is our current franchise, sales and marketing trend session and, if you've been with us for a while, we've been doing this for oh, probably about three years or so, maybe a little bit longer, and the last few months have just been gotten away from me, so sorry for missing the last couple of months here. If you've been missing me. Well, here we are, we're back. I think our last session was maybe two or three months ago, so looking forward to get going on this. Thank you all for tuning in here and what we'll do. If you're new to us here or just looking for an overview, big Sky Franchise Team we help companies franchise their business and we work with existing franchisors to help them expand and solve some of their market needs or market challenges that they're facing. And then this session here in particular, we take a look at some broad economic data and then help give us a sense of what in the world's going on in the world of, in the broad business world to see how that might be impacting franchising. And even if we can't discern or tell exactly how it's impacting franchising, well then maybe we can at least have the knowledge to understand that maybe some of these things are concerns or some fears of potential franchise buyers and this could very well be on the hearts and minds of some of the franchisees in your franchise system. So let's go ahead. I will share my screen and for this session I tend to do a pretty quick, rapid fire here to go through this. So we'll just go ahead and get going. If you're joining us live, please feel free to ask any questions and you can feel free to share this once we repost it.

Tom DuFore:

So the first reports we like to dig into and go through are from the Institute for Supply Management. They have three reports. If you're looking at my screen here, there is the manufacturing PMI, the services PMI and the hospital PMI. We'll take a look at each of these. So the first report we're going to take a look at is the manufacturing purchasing managers index, or manufacturing PMI. Now, this one was. This is from the. Here we go. This is for April. This is showing April's numbers and it says the US manufacturing sector contracted in April for the second consecutive month, after two months of expansion, preceded by 26 months of contraction. The manufacturing PMI registered 48.7 percent, 0.3 percentage point lower compared to the 49% reported in March. After reversing its recent momentum, in March the manufacturing PMI again registered below its reading in December. Of the five sub-indexes that directly factor into the PMI, two the supplier deliveries and inventories were in expansion territory, the same as last month. So what I like to look at here is this is just taking a look at what is going on with purchasing managers, specifically in manufacturing. Are they getting more orders? Are more orders getting placed for products and purchases? And so what you can see here is we're below the line for the manufacturing breakeven, which is at 50%, and the overall economy breakeven line is 42.3%.

Tom DuFore:

I like to take a look at manufacturing because it tends to be a leading indicator. What I like to see in general is, if you look at the last six months, just in general, it was much better than it had been really in about a year, from a year ago from now. So, while the trend is still below that 50%, if you were to add these up and average it out over the last six or seven months. The trend does look like it's just ratcheting up, inching up just a little bit. You can see that trend line. It's pretty easy to see there. Inching up just a little bit. You can see that trend line. It's pretty easy to see there. Okay, so well, in general, what does this mean to me? This is kind of where we've been for several years now, which is we're just kind of hanging out, we're in this kind of middle spot, okay, so let's take a look at the services PMI. Okay, and the US is largely a services-driven economy in today's world.

Tom DuFore:

And this is a report, the services PMI. This one was written by Steve Miller, the manufacturing report was written by Timothy R Fior and we have here, we have in April this is for the services PMI. It says says in April the services PMI registered 51.6%, a 0.8 percentage point increase compared to the March reading of 50.8. So this is good. If we just look at it 0.8%, it's an improvement. And it says then it could get back to this paragraph. It says a reading above 50% indicates the services sector economy is generally expanding. Below 50% indicates it is generally contracting. A services PMI above 48.6% over time generally indicates an expansion of the overall economy. Therefore, the April services PMI indicates the overall economy is expanding for the 59th straight month. So we can see these numbers here and it's in a positive territory, just over positive, but nonetheless it's still positive.

Tom DuFore:

And then the third report here is the hospital PMI. This is their newest report. This one was written by Nancy LeMaster and it says hospital PMI at 55%. I'm going to jump to the second paragraph and it says the hospital PMI registered 55% in April, a four percentage point increase from the March reading of 51%. The business activity index remained in expansion territory for the sixth straight month, the New Orders Index expanded for the sixth consecutive month and the Employment Index returned to expansion territory in April after two straight months in contraction. So as you look at this chart comparatively to the other two that we've seen, you can see that the hospital PMI is much more. There are much bigger jumps month to month and season to season and personally I think it's largely has some indication and impact, based on seasonality, of cold, viruses and flus and things like that that might be going through and just an indication of what that might look like here. So if we take all three of these combined and we look at manufacturing at 48.7, services, 51.6, and hospital at 55%. In general, it looks like it is tipping the scale into a positive direction, but it looks like it's tipping it just slightly. So, to me, what I can take from this is that, overall, the economy is neutral or it's moving along, and so, for prospects that you might be bumping into, to me what this says is that likely the economy is going to stay kind of right about where it is and has been for the last little bit, and same for your franchisees. What to expect and what's going on. I think that this is just some interesting data to look at to show that probably a bit more of the same of what we've typically seen the last couple of years, all right.

Tom DuFore:

Next up is the unemployment rate. This is from the tradingeconomicscom, the United States unemployment rate, and I'll go down here and we can see that for April it was 4.2%, for March it was 4.2%, for February it was 4.1% and for January it was 4.0%. So all very, very close 4.0% to 4.1%. And the article reads here the US unemployment rate was at 4.2% in April of 2025, the same as in March and in line with market expectations. The number of employed individuals increased by 82,000 to 7.165 million, while employment grew by 436,000 to reach the 163.944 million. The labor force participation rate also edged up to 62.6% from 62.5% and the employment population ratio to 60% from 59.9%. Additionally, the U6 unemployment rate, which includes those marginally attached to the labor force and those working part-time for economic reasons, decreased to 7.9% from 7.9% the previous month. So, as we take a look at this here, this is the unemployment rate. Oh, it's asking, will the unemployment rate be above expectations, yes or no? What if I say, oh, you have to log in. Okay, just seeing if it'd give us some real-time answers here if we clicked one, okay.

Tom DuFore:

Next is the inflation rate. So let's go ahead and take a look at this and we can see for April here, as we look at this chart. This is a 12-month chart we're looking at. As we look at this chart, this is a 12-month chart we're looking at, and in April of 2024, it was 3.4% and then declining down into September at 2.4%, then rising to January of 2025 to 3%, and it's been declining every month since, month since and into last month at which it had the unemployment rate or, excuse me, the inflation rate at 2.3%.

Tom DuFore:

So this is from tradingeconomicscom, the United States Inflation and Consumer Price Index. It says the annual inflation rate in the US eased to 2.3% in April 2025, the lowest since February 21st, from 2.4% in March and below forecasts of 2.4%. And so I think what's very interesting here is this is the lowest rate of inflation in more than four years. That's pretty substantial and pretty significant. So let's take a look at the five-year marker so here we are at 2.3, and we have to go all the way back to here's March of 2021 at 2.6. So this is the lowest it's been since March of 2021, which is pretty incredible. And right before that, 1.7, 1.4, 1.4. Okay, and we can see, here we're at 2.3. So all things indicating positive. So hopefully, what that means is the cost to buy stuff is staying relatively stable. Relatively stable despite some of the things that are going on and what we're seeing with some of the tariff conversations and things that are going on. I think all things stated, this is interesting data to take a look at to show that, well, inflation it's actually going down right now. Again, we'll see what happens in the coming months but see if this trend continues, but as a whole, it looks like it's leveling off and maybe continuing to reduce a bit here.

Tom DuFore:

Okay, next up is we're going to take a look at the survey of consumers, which is a consumer sentiment, or they have an index of consumer sentiment that we take a look at, and this is a 10-year report that's put together by the University of Michigan, and what we see here is that for this most recent month, april that it's showing here we had a steep decline in the consumer sentiment, and I would imagine that that largely has quite a bit to do with the tariffs getting implemented in April and seeing what goes on from there. In my opinion, I think that this tariff stuff is still pretty early on for us to see what's going to happen, if there's going to be any real lasting or significant impact from it. We'll see if it's just a short-term blip or if this is more of a long-term thing. It remains to be seen. Certainly we want to watch and monitor it, but it looks like a lot of the topics and conversations at least what's transpired so far from it getting implemented in April through today that a lot of these continue to get eased and relaxed, as hopefully some trade negotiations and trade deals continue to happen here. So you can see we're starting. They bottomed out here in the middle of 2022, and consumer sentiment started steadily increasing for the last three years almost three years and then really fell off here. So we'll see if next month or the month after we see a big rebound, if the tariff thing calms down or there seems to be some improvement there. But it'll be interesting to see Generally what this would indicate at least as I look at this, and how you can interpret it is that some folks are going to say, well, it might be harder to be selling your product or service today, that it's harder to get to a.

Tom DuFore:

Yes, some people are concerned about it. I would say, for people that are looking at maybe buying a franchise or purchasing something people that are looking at maybe buying a franchise or purchasing something, especially a substantial purpose now might be a time where there might be an opportunity or a potential deal to be made, depending on what you're looking at doing. I can tell you on our franchise front, with clients that we've worked with, just today I had a client email me and I'm not even making this up. She emailed me and said that she sold her first franchise and it was a multi-unit purchase for her very first one and had a client just a week or two ago email me and tell me that they just sold their first franchise as well. So we're definitely seeing some activity happening. So we'll see where this transpires and obviously those are some anecdotal cases, but still interesting to see that first franchises are happening and are being sold.

Tom DuFore:

Okay, now we're going to take a look at business formation statistics. This has become one of my most favorite reports and it says this is for immediate release, wednesday May 14th from the United States Census Bureau and they released new business formation. So here's zoomed in statistics of this and on this chart you can see that it shows that the total US business applications for new business filings for April of 25 was almost 450,000 new businesses started. So 449,508 new businesses across the country, with 156,170 of them considered to be high propensity businesses. So all of that me continues to be a great sign, especially if you're in franchise development or new franchise recruitment efforts. You can see here the interest in entrepreneurship and self-employment is high, with all of these new businesses continuing to be formed. So I think it's just a reminder that, while there may be economic conditions and things going on, so much that's happening here indicates to me, the behavior is showing that people are starting businesses. So, in my opinion, anyone you're speaking with that has about your franchise. I think you have to assume that their interest is serious for opening or starting a business right now.

Tom DuFore:

Okay, next up is the Small Business Index Q1 report. This is presented by the US Chamber of Commerce and MetLife and the summary and highlights here is that inflation continues to be their biggest challenge and the small business index score for 2025 reduced a little bit. So you can see Q4 of last. Actually, if you look back to last year, q1 of 24 was 62.3 and Q1 of 25 is 62.3. They're almost they are an identical number and so interesting to see that we had a nice little rise in throughout 2024, and then it's kind of cycled downward here. So we'll see if this continues to be a trend or if it pops back up in Q2. It says 57% of small businesses say that their recently hired entry-level employees are prepared to enter the workforce. I think that's interesting.

Tom DuFore:

Okay, next up is the Vistage CEO Confidence Index report, and this reads the Vistage CEO Confidence Index is calculated from responses to a set of six questions about the current and future state of the US economy, revenue and profitability projections and hiring and investment plans Measured over time. The index reflects trends in the US economy and leads both GDP and changes to employment, both GDP and changes to employment. So if we look at the last five years, we see Q1 had a big drop to 78.5, and it's the lowest level since Q3 of 2023. So that's been what about a year and a half it's been since it's been that low and Q4 was one of the highest numbers. It'd been since 2020, q2 of 2021.

Tom DuFore:

So a couple of things I wanted to take a look at is the confidence index components? Okay, and the components take a look at these six questions and so it asks about overall economy compared with a year ago. So it's showing that 57% 57, 59% is either neutral, has no opinion or positive. The one I really want to take a look at is you see that the overall economy from these responses shows 41% negative, 42% negative. But what I found most interesting on this report is sales revenue and the question is do you anticipate that your firm sales revenues will increase, remain about the same or decrease over the next 12 months? 58% of the respondents said they expect it to increase, while 25% said neutral and only 15% said negative. So I consider that interesting, because only 15% of these executives think that their sales are going to decline, but 42% of them expect that the future economy is that the conditions are not going to be better than they are now. So I find that very telling. So, while they have this general overall prediction for the broad market, they think, well, it's not going to be as well where it's closer to that. But 58% said, oh well, actually, our sales are going to increase. So I think that, to me, is a more telling sign, or indicative sign, of what are they really truly thinking, especially as it relates to their business. So to me, that's a very interesting takeaway off of these charts.

Tom DuFore:

Okay, this is the 2025 small businesses report from Guidant Financial. They do an aggregate and they take a look at the top industries in 2025, small business plans, top states for small businesses, and they look at the small business types. So in their report and their funding and inquiries for 2025 business types, they found that 35% of the people they're working with are new independent businesses and 10 percent are existing franchises. So it's showing 45 percent franchise of some kind and 55 percent are independent businesses. So I think that's really interesting with what Guidant is showing here and, to me, indicates that if you're in need of finding something for your business, guidant certainly would have some type of solutions for franchise or independent and the top states for small business. It's showing 12% in California, texas at 9%, florida at 8% and Georgia at 7%. And then the last piece here is to take a look at Franchise Insights. So it looks like they've stopped really updating or continuing to update their website with all of this and they're publishing a lot on LinkedIn now.

Tom DuFore:

So let me pull up this recent post and, um, it says the question that was asked on this report. It says how familiar were you with the franchises you inquired? Uh, I get, uh, lots of complaints from clients in reference to some of these franchise lead aggregators in these, these franchise portals, and what I find interesting from the data that Franchise Insight shares is when they ask these questions. This is to me always a little surprising, because it says 46.7% of the respondents said they were completely unfamiliar with the brand, 36.7% said they were vaguely familiar with the brand, only 10% of people said that they were very familiar and 6.7% said that they were already somewhat familiar. So we're looking at this 16.7%. Or, if you want to round up for simple, easy numbers, about 20% of the people requiring just for the 80-20 rule here that applies roughly. It's a little less than that, it's 16.7%. So said that they are familiar or very have some familiarity with the brands they inquired. Vaguely familiar to me might as well be as really unfamiliar. And then 46.7% almost half are completely unfamiliar. So to me, this is the sentiment and reminder that, if that's the case, that means if I were to apply these averages across the board, it means about half the people who'd be inquiring about your franchise likely have no understanding of your business. They don't understand it, they don't know it, they're not familiar with it, which is a great opportunity for you to help educate them, to show them what that looks like.

Tom DuFore:

Let's see if I can get one more here. Ah, this one's good. So it asked, and this was published on March 4th. It said March 4th of 2025,. It says entrepreneurs are agreeing now is a much better time for their startups than three months ago. So 77.8% in March said that now is a good time to start up a business. So let's see here.

Tom DuFore:

So that's our session for today. I'd love to open this up to questions from any of our attendees here to see if you have any questions, anything specific you'd like to share, talk about or request, before we close this out, for another solid session here. Request before we close this out for another solid session here. All right, well, I'm not seeing any questions come through. I just want to thank you all for being here today and wish you all a very happy Memorial Day coming up on Monday, and a happy Memorial Day weekend. Let's remember those soldiers and loved ones that we've lost, who have served our country in battle over the years. So thank you all for being here. Happy Memorial Day, have a great week and we'll see you soon.

People on this episode

Head Shot

Tom DuFore

Host