January 2025

Leadership is no longer just about overseeing tasks or meeting short-term goals — it’s about creating a lasting imprint on your organization. According to Deloitte’s 2024 Global Human Capital Trends report, only 3% of leaders believe their organizations are fully capturing the value of their workforce, despite recognizing the need for change.

Leaders who stand out move beyond managing processes to shaping people, cultures and futures. The transition from manager to mentor defines impactful executives as they focus on nurturing growth, sparking innovation and building environments where their influence endures long after they’re gone.

Reaching the pinnacle of leadership isn’t automatic — it’s intentional, and the following strategies can help you make the leap and leave a legacy of your own.

Related: If You Want People to Follow You, Stop Being a Boss — 8 Steps to Truly Effective Leadership

The stages of leadership evolution

As professionals rise through the ranks, the focus of your leadership shifts. What starts as a desire to manage well becomes a mission to inspire and mentor.

The manager: Leading by execution

At the early stages of leadership, managers are judged by their ability to get things done. The focus is on ensuring tasks are completed on time and with high quality. Success is measured in output, and validation often comes from solving problems and being recognized for competence.

Many leaders stay stuck here, believing that effective management is enough. But the truth is, focusing solely on tasks can only take you so far. While many find fulfillment here, growth requires evolving from a task manager to an inspiring leader.

The leader: Inspiring and collaborating

As you step into more senior roles, the focus shifts from managing tasks to inspiring people. You must motivate and nurture collaboration across the different departments and not just within your own team to create a shared vision that the team rallies around. Harry Kraemer, the former CEO of Baxter International and current Clinical Professor of Leadership at Northwestern University’s Kellogg School of Management, expressed this well when he said, “Leadership has everything to do with the ability to influence people to do things that they may not ordinarily do. The only way I know how to influence people is that you have to be able to relate to people.”

At this stage, people begin to trust your judgment and follow your lead because you show them how their work connects to a bigger purpose. It is here when leadership shifts from individual contribution to a focus on collective success.

The executive leader: Visionary strategy and innovation

When you reach the executive level, leadership is about more than immediate results. Executives guide companies through long-term strategy, making decisions that shape the future, taking into consideration all departments and key external stakeholders. At this stage, leadership shifts to creating systems and structures that fuel innovation and ensure sustainable growth.

Making this leap requires rethinking practices like viewing people as costs instead of assets. According to Deloitte’s report, while only 33% of leaders cite insufficient understanding as a barrier, most identify internal constraints — like limited resources and misaligned leadership — as the biggest obstacles to progress. Overcoming these challenges demands a different set of skills at the executive level, including the ability to lead by influence, strategic thinking, emotional intelligence (EQ) and a growth mindset.

The C-level: Legacy and mentorship

At the C-suite level, the ultimate goal is to leave a legacy that transcends day-to-day operations. Leaders at this level understand that true success lies not just in business outcomes but in how they influence and shape the organization and the communities it serves for years to come.

Kraemer emphasized self-reflection and values-based leadership, focusing on long-term growth and trust. As CEO, his decision to pull a faulty product despite a $185 million loss showed his commitment to integrity and setting a lasting example. Even after his 2004 departure, his leadership principles laid a foundation that continued to guide Baxter’s culture, despite some post-transition challenges.

By consistently embodying values and mentoring future leaders, Kraemer made sure his influence at Baxter continued well beyond his tenure. His legacy is a perfect example of how admired leaders don’t just manage; they mentor, inspire and create a culture that endures.

Related: How To Build A Legacy For Your Company You Can Be Proud Of

4 tactics to help to help you evolve from manager to mentor

First of all, be patient with yourself — it does not happen overnight. To successfully transition from a manager focused on operational efficiency to a mentor who leaves a legacy, here are four simple tactics you can implement in your daily leadership to help you speed up your leadership evolution.

1. Ask how they’re doing, not just what they’re doing

As a manager, getting caught up in the day-to-day tasks and outputs is easy. However, admired leaders know that people are more than their performance metrics. Instead of merely focusing on what your team is doing, ask how they’re doing. Genuine check-ins cultivate trust and show that you care about the individual, not just their work.

For example, when I began regularly asking my team about their well-being and job satisfaction — beyond deadlines and tasks — morale immediately improved. People felt supported and, in turn, were more engaged in their work. The small act of asking how someone is doing and how the leader can help can profoundly impact team dynamics.

2. Tell stories that inspire and connect to the mission

Leaders who inspire are storytellers. By sharing stories that tie back to the organization’s mission and the greater purpose, or “the why” — a concept popularized by Simon Sinek — you create a narrative that helps your team see the bigger picture. Relating their daily work to the impact they make gives them pride and illustrates what matters and why.

Most organizations that consistently outperform competitors focus on the value they deliver to customers and communities. Their leaders ask, “How many did we ‘help’ today?” versus “How many did we sell today?” and underscore what matters by sharing stories that illustrate the impact of their work. These stories connect daily tasks to the larger mission, making work more meaningful and aligning efforts with long-term goals.

3. Be the connector

Great leaders understand that growth often happens through relationships. As a mentor, your role as a connector involves helping team members find the right people and resources to grow. Understand everyone’s “superpower” and create connections that complement strengths in a positive, encouraging way.

In my experience, introducing people to others who could provide new insights or mentorship often catalyzed significant professional development. By connecting your team with individuals who can expand their horizons, you promote a culture of learning and collaboration.

4. Reserve judgment, listen, and offer insights

One of the most important traits of a mentor is the ability to listen without rushing to judgment. When team members come to you with ideas or challenges, fully hear them out. Offer feedback but ask questions that encourage reflection and dialogue.

I once worked with a leader who never offered quick answers. Instead, they listened intently and asked, “What do you think we should do?” This simple question turned a one-way conversation into a collaborative problem-solving session, making the other person feel valued and respected. Allowing people to explain their rationale, guided by thoughtful questions, fosters ownership over their actions and outcomes. It’s a technique I’ve adopted to build stronger relationships and develop more thoughtful leaders.

Related: 22 Qualities That Make a Great Leader

The journey from manager to mentor is one of continual growth. The goal isn’t to abandon operational efficiency but to enhance it by balancing people and purpose with performance and profit. Leaders must inspire, mentor and create a lasting impact. The most admired leaders understand that their influence is measured not just in profits but in the people and cultures they leave behind.

True leadership means ensuring others are ready to carry on the mission without you. The time to start that evolution is now.

In 1958, Joe Foster co-founded Reebok and helped grow the company to be worth $4 billion, he says, before exiting in 1991. (Adidas bought Reebok for $3.8 billion in 2005 before selling it in 2021.)

Now the 89-year-old entrepreneur is helping launch a new high-tech shoe brand with slides that are fully 3D printed, meaning they are printed out, not assembled, from layer after layer of stacked plastic filament.

It’s also the first commercially available shoe designed by AI, the founder tells Entrepreneur.

^{Credit: Syntilay}

The shoe is the first from Syntilay, a brand being advised by Foster. Syntilay’s founder and CEO is serial entrepreneur Ben Weiss, 25, who has previously released a weekly podcast, an NFT company, and a sneaker brand.

Weiss and Foster launched the slides on Thursday to the lucrative U.S. footwear market, which generated around $78 billion in revenue in 2021 and is projected to reach $104 billion in 2028, according to RunRepeat.

The shoe comes in five colors — blue, black, red, beige, and orange — and is custom-made to fit each buyer.

Related: This 27-Year-Old Started a Side Hustle on Facebook Marketplace — Now the Gig Earns Over $500,000 a Month

Weiss and Foster said that they plan to manufacture around a few thousand pairs, enough to make Syntilay a more recognizable name, before shifting gears and creating unique AI-designed shoes that brands and content creators can sell as their own.

Entrepreneur talked to the founders about how they got into the business, how AI contributed to the shoe’s design, and what Foster learned from Reebok.

How did this partnership start?

Foster: Ben [Weiss] came to us with an idea. I think what inspired us was Ben’s enthusiasm. This partnership has been in the works for 18 months.

Weiss: I just reached out, and a couple of months later, we met up in person and had some great chats. I just explained the opportunity here.

There’s no traditional sizing with these slides. How are people getting a custom fit?

Weiss: The shoes are scanned to fit via your phone camera app. Our partner, Zellerfeld, powers this method. They have a great way of getting the best-fit shoe for you that takes your measurements from your phone camera and 3D prints it specifically.

Related: I Tried 3 AI Headshot Generators and There Was a Clear Winner

Can you tell me more about the design of the shoe?

Weiss:  The design is pretty unique in that we’ve generated the shape of it with AI. That was an inspiration for what we’ve built.  We had a sketch done by our [human] designer, and then we just AI-generated a 3D shape from that.  The patterns on the shoe are also all designed by AI; we generated the patterns. We played around with lots of different versions of that. And so it’s very detailed.

^{Credit: Syntilay}

So would you credit AI as the designer of the shoe or was there more human involvement than that?

Weiss: It’s pretty split, I would say. This is the most AI-designed shoe that we’ve ever seen being produced so far. It very much is an AI shoe. We still had a human designer helping us in making it and leading it along the way. I think that’s probably the best that can be done in this current state.

Related: Here’s How Much It Costs to Own a 3D-Printed ‘Fortress’ Home in Texas

What advantages and disadvantages do 3D-printed shoes have?

Foster: The advantage is that it speeds up development. You can produce a product within days, and if it’s wrong, you can get a new sample. So development is so much faster. Now, how much you can develop it and what the process is, we’re still learning. The disadvantage is that you can’t do volume 3D printing, but you can get a product on the market, and you can make sure that the product does its job.

^{Side profile of the slides in red. Credit: Syntilay}

^{Top of the shoe in orange. Credit: Syntilay}

^{Bottom of the shoe in blue. Credit: Syntilay}

What are some lessons you learned at Reebok and how are you going to apply them here?

Foster: We learned that you can get problems,  you can get challenges, but those challenges are opportunities.  We started our business as Mercury Sports Footwear. We couldn’t register it so we came up with a better name. We also had to change our silhouette because Adidas didn’t like our two stripes and a T-bar. We changed it to the vector, which you now see in Reebok. I think this is what you do with anything. If you’re in a business, you’ve got to be ready to change, willing to change. In fact, you’ve got to look for change. And if somebody challenges you, that is a good opportunity.

How are you hoping to expand Syntilay?

 Weiss:  We’re starting with this pair of shoes now in different colors, but this is a fairly limited run overall. We ultimately want to give a lot of brands and content creators a shot at the footwear space.  What we have today is a faster method to make shoes with artificial intelligence and 3D printing. Our approach as we go is to make brand-new, original designs for brands and influencers.

^{A pair of the slides. Credit: Syntilay}

What is the end goal of this launch?

Foster: It took me 10 years to get Reebok into America. But when we got 5-star ratings from Runner’s World, there was a change. They wanted us then — America wanted Reebok. We got credibility. Somewhere along this process, Syntilay is going to get credibility. It could be very simple. It could be one person. The thing now is just getting these shoes out and getting people’s imaginations to go, “Wow, this is brilliant.”

This interview was lightly edited and cut for clarity.

Related: When His Dad Died, He Took His Grief to the Mall and Shopped Sneaker Sales. Now His Hobby Is a $10 Million Side Hustle.

While seasons of high demand bring excitement to small business owners, they often create additional stress that prevents them from providing the best customer experience possible. Regardless of your situation, here are five ways to sustain your business and yourself in the midst of chaos and keep the customer experience top of mind.

Related: How To Find the Right Time Management Method for You

1. Plan ahead

Poor planning usually leads to less-than-desirable results and dissatisfied customers. Whether you’re a seasoned professional or a newcomer to the rush of high demand, careful consideration of the steps ahead is essential.

Use all the resources available to manage inventory and order needs, set schedules, consider a new promotion or marketing campaign and invest in customer service by reviewing protocols with your staff. If a plan isn’t possible due to constraints, make a list of what you can accomplish with what you have. As a wrap-up to the season, use hurdles as a learning experience for future planning.

Related: 6 Simple Ways to Build Wellness Into Your Busy Workday

2. Maintain positivity

Alongside a plan, keep your employees engaged and positive by staying calm when unexpected events arise (which they will!). A positive attitude in the face of adversity can mean the difference between a minor setback and a complete disaster. Some additions to your bustling routine could include:

• Celebrating small wins for you and your employees, such as verbal recognition during a team meeting or a small gift.
• Reframing negative thoughts as opportunities to improve or additional steps to success.
• Encouraging collaboration to solve complex problems.
• Customizing your workspace with objects that bring you joy and peace (e.g., motivational quotes, photos of loved ones, mementos).

When practicing optimism, be mindful that dismissing negative emotions is more harmful than helpful. Continue to validate genuine emotions and experiences from yourself and your team. Highs and lows are part of the human experience.

Related: How Optimists and Pessimists Can Get Along

3. Delegate often

A culture of success is a collaborative effort, one that rests on everyone’s shoulders. As a business leader or owner, you may find sharing the workload especially challenging when tasks need to be handled in a specific way. However, a healthy workplace should be teamwork-centric.

By delegating, you play to your employees’ strengths and provide ample space to focus on more important needs. Start by establishing a system that empowers your team to take pride in success. Then, motivate them to actively pursue that success. Finally, uphold personal and team accountability to ensure lasting results.

Also, consider outsourcing tasks beyond your immediate team to the community, such as other small businesses. For example, your neighborhood The UPS Store provides a convenient, one-stop shop for items that are missing from your to-do list – from printing marketing materials to packing and shipping thank-you gifts to select customers or returning online purchases.

Related: Why Proper Delegation Guarantees Team Success

4. Balance rest and productivity

As a business owner, doing right by your business requires doing right by yourself. As The UPS Store President Sarah Casalan would say, “If you don’t listen to your body, it will speak for you eventually.” By acknowledging that being productive requires setting aside time for rest, you will find enduring success in greater amounts than you would by prioritizing output alone. Some other helpful tips to get started on balancing time off with work to-dos:

• Take short breaks to reset and recharge yourself.
• Focus on one or two large projects at a time or several small ones.
• Delegate nonessential tasks to your team members.
• Set clear, firm boundaries on when you plan to stop working (e.g., I must be home by 7 p.m. and will not answer messages or calls until tomorrow). Follow this up with a physical boundary, such as turning off notifications or devices.
• Schedule time to be with family and friends during off-peak moments.

5. Express gratitude

When stability resumes, and even during busy moments, don’t forget to say thank you. A study by University of Miami researchers found that gratitude is strongly associated with people feeling happier, healthier and more grateful. It can even improve relationships and make stressful moments easier to manage and overcome.

Unsure where you should start as the busy season winds down? Write letters to your coworkers expressing your appreciation, call a former boss and share how they made a difference in your life, or take a quiet moment to reflect on what you’re grateful for from the past year. To take it a step further, make gratitude a regular part of your personal and professional life. Keep a gratitude journal or spend a day each month sharing thanks and seeing what these new traditions bring you and those around you a year later.

The hustle and bustle of peak business seasons can bring a mix of emotions and priorities. To create lasting success for yourself, your business and the people you serve, plan early, lean on coworkers, family and friends and prioritize self-care when possible. When the last checkbox is marked complete, say cheers and thank you to those who helped you get there.

Though Tesla had a record-strong quarter in the final months of 2024, it wasn’t enough to stop the electric carmaker’s annual sales from dropping for the first time in its history.

Tesla posted record-high numbers for the final three months of 2024, delivering 495,570 EVs compared to 484,507 shipped at the same time last year.

However, Tesla’s annual numbers were down. The carmaker delivered 1,789,226 electric vehicles in 2024, a decline from the 1,808,581 EVs the company sold in 2023 and below analyst estimates by about 20,000 units, according to Barron’s.

Related: Tesla Sales Show Demand Could Be Speeding Up For Electric Cars

Tesla’s quarter results, while record-breaking, were also below Wall Street estimates of 504,800 deliveries, per Wedbush Securities.

Tesla shares were down nearly 6% on Thursday following the news.

Following President-elect Donald Trump’s win in November, Tesla’s market cap surged to over $1 trillion for the first time since 2022. Tesla’s market cap is $1.2 trillion at the time of writing.

One reason for the decline is increasing competition from international companies.

According to Bloomberg, a Chinese Tesla competitor, BYD, sold 4.25 million EVs and plug-in hybrid cars in 2024 compared to the 1.79 million EVs Tesla sold.

The U.S. EV market has also shifted to include more players. Clean Technica noted that Tesla commanded less than 50% of the U.S. EV market for the first time in six years in 2024. Ford, Kia, Hyundai, and BMW were all rising competitors that encroached on Tesla’s market share.

Related: Tesla Reports ‘Record’ Earnings as Musk Predicts It Will Become ‘the Most Valuable Company in the World’

“If they [Tesla] want to continue to see the growth they had, they need to expand to other sizes and price points,” Jeff Schuster, vice president of automotive research Global Data, told AP.

Analysts also told ABC News that in the U.S., early EV adopters have already purchased vehicles, but mainstream car buyers are still hesitant to do so; they are worried about the technical aspects, costs, how many miles they can go on a single charge, and where to find charging stations.

Related: Elon Musk Announces the ‘Cybercab’ and Other Surprises at Tesla’s ‘We, Robot’ Event. Here’s What to Know.

As the cost of living continues to rise in the U.S., a family of four needs to earn more than ever to live “comfortably,” according to a new report by GOBankingRates.

Using data from the Bureau of Labor Statistics and the Missouri Economic Research and Information Center’s 2024 Cost of Living data series, GOBankingRates researchers analyzed annual living expenses for a family of four in all 50 states. For the report, a “living wage” is defined as the income required to cover 50% of necessities, 30% for discretionary spending, and 20% placed into savings.

The data tells an expensive story.

Every state’s living wage was at least $82,000 a year. In 26 states, a family of four has to earn at least $100,000 a year to be considered “financially secure,” while in four states, a family of four would need to earn $150,000 to have a living wage: Hawaii ($259K), Massachusetts ($200K), California ($188K), and New York ($155K).

Related: Millions of Americans Are Getting a Pay Bump This Year. Here’s Where.

States once considered “affordable,” according to the report, (Florida, Virginia, Wisconsin, and North Carolina) now require a family of four to earn more than $100,000 to be “comfortable.”

Here are the most and least expensive states with living wages needed for a family of four.

Least expensive:

1. West Virginia

• Living wage for a family of four: $82,338
• Annual cost of housing: $13,454
• Annual cost of groceries: $5,731
• Annual cost of healthcare: $7,465

2. Mississippi

• Living wage for a family of four: $87,564
• Annual cost of housing: $15,846
• Annual cost of groceries: $6,750
• Annual cost of healthcare: $7,373

3. Alabama

• Living wage for a family of four: $87,607
• Annual cost of housing: $15,670
• Annual cost of groceries: $6,675
• Annual cost of healthcare: $6,949

4. Kansas

• Living wage for a family of four: $87,944
• Annual cost of housing: $15,517
• Annual cost of groceries: $6,610
• Annual cost of healthcare: $7,141

5. Arkansas

• Living wage for a family of four: $88,312
• Annual cost of housing: $16,504
• Annual cost of groceries: $7,030
• Annual cost of healthcare: $6,617

Related: Young People Earning More Than $200,000 a Year Are Fleeing 1 U.S. State — and Flocking to 2 Others

Most expensive:

46. Alaska

• Living wage for a family of four: $136,990
• Annual cost of housing: $25,854
• Annual cost of groceries: $11,013
• Annual cost of healthcare: $11,290

47. New York

• Living wage for a family of four: $155,738
• Annual cost of housing: $37,354
• Annual cost of groceries: $15,912
• Annual cost of healthcare: $8,607

48. California

• Living wage for a family of four: $188,269
• Annual cost of housing: $45,891
• Annual cost of groceries: $19,549
• Annual cost of healthcare: $8,213

49. Massachusetts

• Living wage for a family of four: $199,671
• Annual cost of housing: $49,600
• Annual cost of groceries: $21,129
• Annual cost of healthcare: $10,033

50. Hawaii

• Living wage for a family of four: $258,918
• Annual cost of housing: $66,412
• Annual cost of groceries: $28,290
• Annual cost of healthcare: $9,540

Read the full report to see where all 50 states rank, click here.

Nvidia shares grew 171% in 2024, leading to newly minted billionaires.

Tench Coxe, 66, a member of Nvidia’s board since 1993, has earned a place on the Bloomberg Billionaires Index for the first time, the publication reported on Thursday.

According to the Index, Coxe is now worth $5.4 billion. He’s Nvidia’s third-largest individual shareholder, with 32 million shares, behind Nvidia co-founder and CEO Jensen Huang (75 million shares) and fellow board member Mark Stevens (38 million shares).

Coxe isn’t Nvidia’s only billionaire board member. Stevens made the Bloomberg Billionaires Index for the first time in July 2024 and has a net worth of $9.3 billion at the time of writing. Another board member who joined Nvidia when it was founded in 1993, Harvey Jones, has a $1 billion stake in Nvidia, per Bloomberg. Huang, also a board member, is worth over $120 billion. He was first recorded as a billionaire by Forbes in 2017.

Related: He Bought Nvidia Stock in 1993. Now It’s the Backbone of His $8.8 Billion Net Worth.

Coxe, Stevens, and Jones have each been Nvidia board members for more than 30 years. According to Bloomberg, their net worth coupled with Huang’s fortune makes Nvidia’s board one of the wealthiest in the world.

^{Nvidia CEO Jensen Huang. Photo by Chip Somodevilla/Getty Images}

It’s not just Nvidia’s top brass that has benefitted from the company’s stock jump — Nvidia’s over 2,200% surge over the past five years has made long-term employees multimillionaires.

Related: Employees Who Worked at This Company for the Past 5 Years Are Now Multi-Millionaires in ‘Semi-Retirement’

A June poll of over 3,000 Nvidia employees showed that 76% were millionaires and one-third were worth over $20 million. Nvidia has around 30,000 total employees.

Even though the majority of respondents were millionaires, an August Bloomberg report indicated they were still working hard. The report unpacked the culture and expectations at Nvidia and concluded that the company had a “pressure cooker” environment.

Still, Nvidia has no problems holding onto employees. Its sustainability report for fiscal year 2024 details that overall turnover was 2.7% compared to the industry average of 17.7%.

Related: ‘Pressure Cooker’: Why Millionaire Nvidia Employees Are Still Working Until 2 a.m.

As a busy professional, finding time to invest in your education can be challenging. But what if you had lifetime access to an online learning platform that lets you learn whenever and wherever you want? That’s exactly what StackSkills offers—and right now, you can get lifetime access for just $19.97 (reg. $600).

How StackSkills fits into a busy life

StackSkills is an intuitive, user-friendly platform that’s perfect for anyone looking to enhance their skills without committing to a rigid schedule. Whether you’re a parent returning to the workforce, a business owner looking to gain new skills, or simply someone looking to keep up with ever-evolving industries, StackSkills provides the tools and flexibility you need to stay ahead.

With instant access to a library of more than 1,000 courses (and new ones are added every month), there’s something for everyone. The platform’s range of beginner to advanced courses covers professional topics like IT, development, graphic design, finance, business, marketing, and more.

There are even personal growth courses like mindful meditation. And with more than 350 of the web’s top instructors, you’ll be learning from some of the best in the business.

One of the greatest advantages of StackSkills is its flexibility. Instead of being tied to a specific time or place, you can access the platform from anywhere and learn at your own pace. Whether you have 15 minutes during your lunch break or a few hours on the weekend, StackSkills is designed to fit seamlessly into your busy life.

Consider a business owner looking to improve their finance skills to manage their company’s growth better. They can browse the available finance courses, find what suits their needs, and immediately start building the expertise necessary to take their business to the next level. And with course certifications, they can demonstrate their newly acquired skills to clients and stakeholders.

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The following excerpt is from Mark Siebert‘s book The Franchisee Handbook: Everything You Need to Know About Buying a Franchise. Buy it now from Amazon | Barnes & Noble | Apple Books | IndieBound

While every item on the franchise disclosure document (FDD) is important, some may be more important to you than others. One of the big-ticket items you should be paying attention to is money: what you must put into the franchise and what you get in return.

It would be wonder­ful if there were a simple calculation to figure out your cost ben­efit, but there just isn’t. Unfortunately, because the FDD is such a complex document, many prospective franchisees try to simplify it, and nowhere is this more apparent than in the items dealing with fees and services (Items 5, 6, and 8).

Frequently, prospective franchisees will focus on either the franchise fee or the royalty and compare it to the competitors’. At a glance, the lowest fee seems the most attractive. Unfortunately, that’s the equivalent of going to a used car lot and buying the cheapest car you can find.

Related: Smart Tips for Successfully Navigating the Initial Franchisor-Franchisee Interview

Focus on royalties

It’s a huge mistake to make your investment decision based on the initial franchise fee alone. While you want a franchise fee that’s reasonable and competitive, it’s only one component of your total investment, and in most franchises, it represents a relatively small fraction of that investment.

For most franchisors, the initial fee isn’t a significant profit center. They have costs associated with marketing the franchise, franchise sales, legal documentation, training their franchisees, and providing them with initial support until they’re up and operating — all of which is theoretically covered by the franchise fee. So, while fees in the tens of thousands of dollars just to join the system may seem excessive, this isn’t where the franchisor makes its money.

Royalties should be much more important in your decision-making process. Let’s say you choose to pay a royalty that’s one percent higher than the fee of a comparable franchise offering. On sales of $500,000, that represents an additional $100,000 throughout a 20-year agreement.

But shopping based on royalty alone isn’t the answer, either. If you were to go to that same car lot and someone were to offer you a ten-year-old Chevy for $50,000, you’d think they were crazy. But if they offered you a brand-new Ferrari for that same price, you’d jump at it. The real question, then, is not price, but value.

Related: Never Buy a Franchise Without Researching These 5 Sources

Understand the fees

At this point in your analysis, though, don’t try to assess the value. Just have a good understanding of the fees you’re likely to incur. In addition to the initial fee (found in Item 5), Item 6 of the FDD provides you with a table documenting all the fees the franchisor will collect from you. So, if the franchisor has a 5 percent royalty and a 1 percent technology fee, you’d pay a total of 6 percent. Go through this section closely to determine exactly what your commitments will be.

Also, be sure you understand how these fees are actually calculated. For example, while most franchisors charge franchise fees based on gross sales, some charge royalties based on gross profit (revenues minus the cost of goods sold). Some franchisors may have different definitions of “gross sales” — for example, excluding taxes or gift card revenues.

The one set of fees you may want to view differently as part of this analysis are your advertising fees, referral fees, or national accounts charges. Unlike most other fees, these fees are geared toward driving revenue to your business. As such, you should view them as non-incremental (as presumably, the franchisor has designed them); they’ll benefit you directly and are based on the franchisor’s assessment of what’s been historically necessary to drive business to your door.

This is also a good opportunity to take a look at Item 8 of the FDD, in which the franchisor must disclose any restrictions on the sources of products or services that will be imposed on you. Any franchisor that’s looking to control quality will dictate the sources of any products or services that will impact the integrity of the brand — and that ultimately affects your costs, fees, and bottom line. Frankly, it’s generally in the best interests of the entire network to ensure that the franchisor enforces these brand standards.

Related: Which Franchise is Right For You? Follow These Steps

Item 8 disclosures

On occasion, the franchisor may be one of several suppliers or even the sole designated supplier of certain products and services. Many franchisors will choose to sell products and/or services to their franchisees. This will also be disclosed in Item 8, along with the revenue (not profits) that the franchisor or its affiliates derived from those purchases. Item 8 is also where the franchisor discloses any rebates or other incentives it receives from designated suppliers.

When the franchisor sells to you, it should have the opportunity to make a reasonable profit from those sales. In many systems, the profit a franchisor makes on product sales may allow it to reduce the fees it charges in other areas, such as royalties. Likewise, we’ve seen several franchisors who will redistribute manufacturer’s rebates to their franchisees or who will contribute some or all of those rebates into their advertising fund for the benefit of all franchisees.

If the franchisee is acting as a captive channel of distribution for the franchisor, make a note of it here. Later in your diligence process, you can ask any franchisees you interview whether the franchisor’s pricing is reasonable.

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This Side Hustle Spotlight Q&A features JW Wiseman, founder of non-alcoholic craft cocktail company Curious Elixirs.

^{Image Credit: Nick Kova. JW Wiseman, founder of Curious Elixirs.}

Launched in 2015, Curious Elixirs generated $2.2 million in its first five years — and skyrocketed past $50 million in the past five years. The brand has served millions of customers in some of the best restaurants in the world, including Daniel and The French Laundry; at nightclubs like House of Yes; and in their own homes through its direct-to-consumer business. The brand is projected to do $176 million in revenue by 2030.

Responses have been edited for length and clarity.

What was your day job or primary occupation when you started your side hustle?
Helping clean food startups like Daily Harvest and Chomps get their first million customers through my marketing firm Good Business, along with opening a bar called The Whiskey Brooklyn and the nightclub OUTPUT. It took about five years before we had enough steady cashflow for me to commit full-time to Curious Elixirs.

Related: How to Start a Side Hustle With Facebook, From 4 People Who Did It and Are Earning More Than $1 Million a Year

When did you start your side hustle, and where did you find the inspiration for it?
Working in nightlife and being a huge cocktail nerd in New York City, I’ve loved hospitality for ages…and ended up drinking too much. One winter’s night in 2012, I had over 20 drinks, and the next day I didn’t even have a hangover — that was so scary. I changed my relationship with alcohol and started drinking less. But I still wanted to be social and have an elevated cocktail experience — it literally did not exist at that time. So I set out to create it.

What we did was craft complex cocktails without alcohol using the world’s best ingredients with inspiration from cocktails new and old. We collaborated with bartenders, food scientists and herbalists. And Curious Elixirs was born.

^{Image Credit: Courtesy of Curious Elixirs}

What were some of the first steps you took to get your side hustle off the ground?
Tinkering in the kitchen, reading books on herbs and taking a chance to make something that had never existed: a booze-free craft cocktail with herbs and adaptogens to help you unwind.

While working on an early hibiscus negroni recipe one Sunday morning, the name just struck me out of nowhere — Curious Elixirs — and I kept working on it until it was finally ready for testing at parties in Brooklyn and Queens.

Related: ‘Hustling Every Day’: These Friends Started a Side Hustle With $2,500 Each — It ‘Snowballed’ to Over $500,000 and Became a Multimillion-Dollar Brand

Back then, we had a hotel in Rockaway Beach called Playland Motel, and for opening weekend, I made a Curious Elixir. I didn’t even label it as non-alcoholic, but people kept drinking that far more than the booze. I knew I was on to something.

To more about the non-alcoholic space, I sought advice from hospitality pros, while also apprenticing with food scientists. I learned how to adapt bartending craft mocktails to then scaling beverage production, with clean-label ingredients of the highest quality from around the world.

Related: Has Dry January Really Lifted Non-Alcoholic Beverage Makers’ Spirits?

What were some of the biggest challenges you faced while building your side hustle, and how did you navigate them?
When Curious began as a business in 2015, many of the alcohol-free ingredient extracts that make a drink bitter or spicy — like gentian in our Curious No. 1 or ancho chili in Curious No. 2 — didn’t exist yet. Creating these extracts and blending them to make sophisticated non-alcoholic cocktails takes years of effort and experimentation.

Another challenge was filming Shark Tank in 2018, and having the segment not make the show. Curious Elixirs was ahead of its time, and the sharks just didn’t understand what a massive opportunity the non-alcoholic segment was going to become. It’s still early even though we’re 10 years in. At the time, we were often running out of product to sell, so it’s a blessing in disguise that it didn’t air.

^{Image Credit: Courtesy of Curious Elixirs}

Related: ‘I Just Hustled’: She Earned More Than $300,000 Wrapping Gifts Last Year — and It All Started With a Side Hustle

How long did it take you to see consistent monthly revenue? How much did the side hustle earn?
Because of my experience taking Daily Harvest national, we launched Curious Elixirs with a monthly subscription called The Curious Cocktail Club. People loved the drinks immediately, so we had consistency from the jump, but it was tiny from the start. During the first five years of side hustling with Curious Elixirs, we earned $2.2 million.

Curious was also ahead of the curve because we were creating the curve. It took five years before Curious could pay me enough to focus on it full-time…that was in January 2020.

When the pandemic hit we had two waves of newcomers to non-alcoholic options: Those who cut back on booze right as lockdown happened, and then a second wave of people who drank too much during quarantine and decided to get “sober curious.”

What does growth and revenue look like now?
Curious is about to turn 10 years old. Our first year we did about $176,000, and now each year we’re comfortably north of eight figures of revenue with 30% CAGR (compound annual growth rate). Curious Elixirs is proud to be just crossing $50 million in revenue in the last five years with a 20.8x brand growth rate — all without any outside investment.

^{Image Credit: Courtesy of Curious Elixirs}

Related: She Started a Side Hustle That Earned More Than $1 Million in Year 1: ‘Manifest Your Best Life’

What do you enjoy most about running this business?
Our mission has always been to transform how we drink socially, and the past few years, it has really accelerated! People are waking up to find that life with less booze can be more fun, creative and memorable.

What’s your advice for others hoping to start successful side hustles of their own?
Start today. Right now. Take five minutes and build a side hustle with small consistent actions. And always stay curious!