Category: News

Beware the Ambush

It’s a jungle out there!

A wise man once observed that everyone is an expert in at least two areas: raising your kids and leading your life. Maybe we should add: owning your business. It’s just human nature. We have opinions and we love to give them, valuable or not. The only event more flattering than being asked to give our opinions is having the requester follow the proffered advice!

Free advice is plentiful. The problem is it may be useless or even dangerous! It is not a matter of motives or good will – although sometimes envy or jealousy can taint a free-adviser’s  remarks.

The motivation may be noble, genuine concern about our well being, but good motives do not change bad advice into good advice. The presumed good will of the advice giver presents another hazard: it causes us to lower our defenses, and to turn off our critical faculty. We accept the advice without proper examination. We are caught off guard. We are ambushed!

Most people give you their opinion with the best of motivations. That does not make the opinion valid. I once had someone tell me that he had decided not to go into a franchised food business because he was discouraged by a cousin who had operated an independent restaurant and had failed. This man had just had his dreams AMBUSHED and he did not even know it.

The fact that his cousin had failed should have meant nothing. His cousin may have been in the wrong business, the wrong location or may have simply been a poor business person. His cousin was an independent, and my client was thinking about joining an established, and successful chain. There was no relevance to the client’s decision.

A Dream Denied

Just like my client, many people find a franchise that captures their interest. The feel that at last they have found something that might, just might, be the vehicle for business ownership that they have been seeking. After a short time, a few days or a week at most, that interest and even excitement vanishes — even before they have done any serious research on the opportunity. What happened? They were ambushed!

Sound silly? Are you feeling just a little bit smug, confident that you would never step into an ambush? Do not smirk just yet. Ambushes come in many forms and from many places.

What kinds of ambushes are there? Unfortunately, there are quite a few. Below is a sampling of some of the most common ones.

The Spousal Ambush

This is a familiar event. The business seeker claims, “I’ve talked it over with my spouse, and he/she says it’s my call. Whatever I want to do is just fine!” Well, it is “fine,” until the hopeful owner comes home and starts talking about the franchise. Suddenly, the objections and concerns begin to flow. Soon, the task of business ownership becomes complicated by marital disagreement, and what was so promising now appears impossible.

The Solution 
Owning a business, franchise or not, is a family decision. If it’s scary for you, imagine how it must feel to those around you. They have less information about what you are thinking of doing than you do. You may have neglected to keep them informed. Even before the search begins, a married couple needs frank, honest discussions about the benefits and problems of business ownership. When there is agreement to go forward, both parties should attend any discussions so each has the same information. Added benefits include better retention of the discussion and a shared pool of knowledge for the partners to review.

The Friend/Neighbor Ambush

It is flattering to be asked for your opinion. Most of us readily respond, even if we do not know anything about the subject. So friends and neighbors will cheerfully provide their (uninformed) opinions when asked.

The Solution
Without being rude or close minded, try to limit the input from well meaning, but non-expert people. Give each opinion the worth it deserves based only on the knowledge and business experience of the opinion giver.

The Trusted Advisor Ambush

Ah…our trusted advisers…we look to them precisely FOR their opinions when making big decisions.  And it’s a good thing to have these people in our corner for their expertise!  The problem here is that so often they also like to add their personal opinion, sprinkled in throughout the actual expert advice they are giving.  Many years ago, I was guilty of this myself as an Outplacement Consultant – occasionally clients would say that they were looking at a particular franchise and, regardless of what franchise, my advice at the time was “oh, that’s risky, let’s work more on your resume!”  That opinion was based on my own fears at the time and my own misunderstanding of the difference in risk between franchising and a pure independent start up.  But it didn’t stop me from voicing my opinion…and probably discouraging some people in the process.

The Solution
Pretty much the same as the “Friend/Neighbor” Ambush.  Give each opinion the worth it deserves based only on the knowledge and of the opinion giver.  But make a point to differentiate between their professional opinion within their area of expertise and the opinions they have that may have nothing to do with their degree, certification or professional area of expertise.

The Envious Associate Ambush

It’s not pleasant to contemplate, but sometimes your decision to explore new horizons may create envy, resentment, or fear, from people you know. It sounds silly. Why should someone else resent the step you are about to make? Sad to say, envy and jealousy are common human failings, and may exist even in your circle of friends and acquaintances. So, if you are taking a giant step forward, your “friend” may feel he/she is being left behind!

Rather than join you on the journey to new successes, however, the “envious associate” will find good sounding reasons to justify doing nothing. By stopping you from moving forward, your associate justifies his inability to move.

The Solution
Keep yourself focused on your goals, and protect your goals from uninformed or ill reasoned advice, whatever the source. It does not matter whether the person who is trying to hold you back is doing it for the right reasons or not. All that matters is if the advice or information is accurate and solid. If it is, then pay attention to it. If not, ignore it.

The Cold Feet Ambush

This is the most common ambush, and it is a self-ambush. That’s right, we do it to ourselves. Most serious, major things that we do for the first time are at least a little bit scary. Going into business is a big thing, and it is definitely scary. So, we set up a way to avoid having to make a tough and scary decision. In this self-ambush, we find reasons to justify not going into business. We allow our fears to get ahead of our hopes. We deprive ourselves of the opportunity to achieve the very thing we most want…the independence, security and freedom that comes with being the boss of a successful business.

The Solution   
We must give ourselves permission to be scared, and use the fear factor to our advantage by letting it add an extra element of caution and care to our research. After you have clearly set your goals, you must compare several different opportunities to each other to see which one most closely matches your “perfect model business.” Don’t compromise on items like cost of acquisition, or what skills have been needed by those people who are already successful in that business

The ‘Looking in the Wrong Places’ Ambush

Often people destroy their own dreams of business ownership by confusing casual inquiry with real research. It is another version of self-ambush, a classic case of “shooting yourself in the foot.”

For example, a person considering a retail business tries to find out how many similar businesses are listed in the Yellow Pages. That is interesting — but tell him/her nothing about the true size of the market, or the market niche the retail business targets. It may be the market is under-served!

Another example: a person asks a competitor about the business opportunity. Does she expect encouragement to enter the field? Does she expect a favorable assessment of the franchise? What she should not expect is an unbiased opinion! Anyway, none of this “looking around” is valuable research. It falls into the “interesting, but so what?” category.

Another example:  a person has a valid concern about a business. Perhaps he has heard that staffing is a challenge. Or maybe he fears the market is already crowded with competitors.  Then, without any attempt to confirm the validity of these concerns, he concludes that they are accurate.  He has not explored these concerns with the true experts in the business, the franchisor and the franchisees.  Instead he makes an illogical leap to a conclusion without any intervening facts! And so his dream is lost.

This self-ambush reminds me about the hummingbird theory.  Years ago, according to then current scientific theory, hummingbirds cannot fly.  Yet, they can. The theory fails.  So the rule is: the theory, or the assumption, or the concern, all yield to reality.

The person who is concerned about staffing at least owes it to himself to find out how the many franchisees do handle staffing.  The prospective franchise owner who is worried about competition should not assume that competition is greater where he lives.  Instead, he should talk to the experts  —  the franchisor and franchisees  — and find out how they fare in competitive situations.  He may learn that their superior marketing power is consolidating the industry.

The Solution
You must do serious and intelligent research about the industry and the franchise. The best source of information about the franchise is the franchisor and the franchisees. To conduct that research, you must get a copy of the Franchise Offering Circular, which only the franchisor can supply. Not only does the Circular provide a good deal of information about the opportunity, it also supplies the list of current franchisees. You need to speak to several of them to get more data about the franchise.

Information about the industry size, stability, and growth may be available from business journals and books available at local and college libraries. Ask the librarian for assistance.

Paralysis By Analysis Ambush

Another form of self-ambush; this describes people who never make a decision because their research never ends. It is another form of avoidance. Now, we, at Success Franchising are devout preachers of the doctrine of doing intense personal due diligence on any business opportunity. We strongly advocate doing everything from talking to business owners in like businesses and/or franchises, to consulting professional advisors.

We are all in favor of you seeking out qualified advice. That’s the key! It must be Q U A L I F I E D. If you get advice from someone who is not qualified, then you are heading straight into an ambush. Guess who is going to be hurt? Of course, talk to others in the same type of business that you are contemplating. Seek out attorneys, CPA’s, and other qualified business experts. Stay away from “expert opinions” from people who are not experts.

There comes a time, however, when you have done enough research. It is time to make up your mind and make a decision. Acknowledge that research cannot answer every question. Some questions cannot be answered until you actually commit to a business and do it. To try to avoid this, some people keep looking for ways to do more research, even after they have uncovered virtually all the information that is available. These people let their caution overtake their vision! It’s a simple fact that the last piece of the getting into business puzzle, namely “How are you actually going to do in that business,” will only be answered when you have actually worked the business.

The Solution
Clear focus on your goals and faith in your own judgment are the best tools to avoid the indecision that can come from over analysis. So, make a sensible research plan. Make it complete, and do every single step of your plan. After you have done them all, review the data, and ask yourself these questions:

1) Do I still want to go into business for myself?

2) Have I discovered what it takes to be successful in this business, in terms of others who have already done this business, and in terms of opportunity in my marketplace? If so, do I fit the business? Am I like the people who have already succeeded in it?

3) Assuming I succeed in this business, will it allow me to reach the personal, professional and family goals that I need from my business?

4) Is this the best business I have found to help me achieve my goals?

If the answer to all the above questions is “yes,” then we recommend you buy the business. If the answer to even a single one is “no,” then it is not the business for you. Only if the answer is “I don’t know,” should you do more research.

 

 

Knowledge of yourself, your goals, and your priorities is critical to making a good decision, and avoiding an ambush. Intelligent research is the greatest single weapon against ambushes. Include those around you who will also be involved. Avoid those who truly have nothing of substance to contribute. Seek out the professional and experienced advisers that can help you evade that ambush on the way to your goal.

Most of all, remember that you can only be ambushed if you allow yourself to be.

Going into business is about owning not just the opportunities, but also the responsibilities. One of the most basic responsibilities you have to yourself is to do your business search in the best possible way for you.

After all is said and done, remember that if you allow others to steal your dream, by scaring you away from it, you will have ambushed yourself! And instead of holding on to your own dream, you will be working for someone who held on to his.

Avoid the ambush, and seek out your dream.

If you do not seek out your dream, you will end up working for someone who did!

 

Living a Life Without Regret

One of Mark Twain’s many sayings is:  “Twenty years from now, you will be more disappointed by the things you didn’t do than by the ones you did do…..”  And if you think about it in your own life, that’s probably true.  I know it is for me!  Of course, it is also how my daughter talked me into bungee jumping in South Africa.

I had been adamant that not only was I not going bungee jumping, but no one in our family was going bungee jumping.  In fact, I was so adamant, I had planned our route so we didn’t even take the road near the bridge for bungee jumping.  But we had so many people telling us what an amazing experience it was, I finally relented enough that I wasn’t going to tell other family members what to do.  So my husband and 20 year old daughter were ready to jump…and then my daughter came to me with the same pleading eyes that got her ice cream when she was little and she said, “mom when are you ever going to have a chance to bungee jump with your daughter in South Africa ever again?  Please do the jump with us!”

Well…a deep breath (and a shot of tequila) later, I did make the jump.  And you know what?  It’s probably one of the best things I’ve ever done in my entire life.  No, not the bungee jump itself – although that actually did turn out to be fun in an exhilarating, memorable, and I-have-no-need-to-ever-do-that-again kind of way.  But what made it such a fantastic, cool and really emancipating experience is what I took away from that jump.  Every time I think about it, it makes me smile; and it makes me proud…and it makes me know I can do more than I think I can.  It’s a reminder of how limiting my fears can be and what a joy it is to conquer them.  That one jump gave me confidence I didn’t know I had and a different outlook on doing things that look scary or risky.  And I know absolutely that if I hadn’t jumped, I would still be regretting that choice.  So it has also given me a new way to look at other opportunities and ask myself which choice I will be happiest with a month or a year or 10 years from now.

Jim Carey’s movie ‘Yes Man’ rather brilliantly illustrates a couple of points related to living without regret as well.  Jim plays “Carl” who attends a motivational seminar and reluctantly makes a covenant to answer “Yes!” to every opportunity, request, or invitation that presents itself. And say yes he does! And (spoiler alert) he gets himself out of the rut he had been in, meets a girl, and finds enjoyment in living.  He also discovers that the covenant was never a real thing where he should say yes to everything… but rather be open to saying yes and use some discernment before committing.  Discernment is definitely an important element and really means getting the facts and evaluating opportunities based on those facts rather than on fears and what may be misperceptions.

Jumping into business ownership can be kind of like bungee jumping.  It can look scary when you are just looking at the idea of business ownership without perhaps even knowing what kind of business or what the potential can be.  But exploring franchise ownership does give you the opportunity to explore the pros and cons and facts in detail before you ever make that leap into ownership.   And the pride and the joys and the rewards of ownership can lead to other opportunities as well.

By the way, the end to that Mark Twain quote is:  “So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”  Here’s wishing you smooth sailing, adventure, and a life without regrets!

Job Security Is A Thing Of The Past….So Now What?

Rob had grown up with the mantra of his parents about how to be successful firmly entrenched in his mind:  “Go to college – Get a job – Pay off the house – Retire.”  But after being laid off for the 5th time in 7 years, that model was losing its ring of truth as the way to be successful.  There are a lot of paradigms that are shifting these days and perhaps we older folks can learn something from the Millennials who have never had the same kind of expectation of job security we grew to expect.

After being laid off 5 times, Rob started to ask himself, “is going to work for someone else really ‘safe?”  Sure, in the short run – there’s a paycheck and benefits and the structure he was used to in the corporate world.

But what about the long run?  Rob did a little research and found that after age 45:

  1. The average length of time an employee was able to stay in a job was 2.4 years.  The layoffs were not due to anyone doing a “bad job” but reorganizations and reductions in force due to technology and other factors.  While older workers used to be valued for their corporate knowledge, our smartphones now have more memory than the computers that sent the first rocket to the moon and that knowledge is not as necessary.  Moreover, older workers cost companies more in health care costs so eliminating this more expensive workforce can reduce expenses – so yes, age discrimination is alive and well despite any laws against it.
  2. The amount of time it takes to find a job increases exponentially with age and a search of a year is not uncommon over the age of 50 (even though most don’t believe it will take them that long).   So, doing the math, we see that at Rob’s income of $100,000, if he is laid off for 1 year and then employed for another 2.4 years, his actual earnings over that period is not $100,000 but rather $70,588 – or almost 30% less than his salary.
  3. The salaries paid to people over 50 begin to decline rather than continue to grow.   In fact, a 20-30% decline after 50 is not uncommon.

Rob decided that it was time to take his financial future into his own hands and invest in himself rather than only investing in the stock market.  He used a portion of his 401k funds (using a “ROBS” program that allowed him to take those funds with no taxes and no penalties) and started a franchised staffing business.  That business was certainly not without its challenges to get off the ground – but Rob enjoyed the challenges as well as the rewards.  After 8 years in the business, Rob was diagnosed with cancer – but fortunately, his employees were able to keep the business running while he was undergoing treatment over the course of the next 8 months.  After that, Rob really did not want to return full time to the business and seeing how well his employees had done in his absence, organized things so he would only need to work about 20 hours a week.  After another 4 years of part-time work, Rob decided to sell the company – generating a return over 2 times greater than he would have generated in the stock market based on his prior earnings.

As Rob’s story illustrates, business ownership is one of the few areas where one can often gain greater control of one’s own destiny and provide greater long-term security.  In a franchise that is a good fit for the owner, it is possible to achieve not only a superior income stream but long term security, stability and often also produce equity, and wealth protection NOT provided with many jobs.

Is Franchising Right For You? 

And are your misperceptions keeping you from a great opportunity?

A lot of people tell us, “I’m just not a franchise kind of guy (or gal)”

Let’s look at why people say that.  First, they confuse franchising and French fries.  The truth is less than 26% of all franchise businesses are food-related.  Those just happen to be the most visible.  And food & beverage is not an easy area to succeed either!  It’s one of the more expensive areas of franchising to get into with the narrowest margins, and has some of the longest hours; perishable product; high employee turnover…there are easier ways to make a living!  But if we eliminate food, there are still 74% of all the franchise opportunities out there to choose from.

Some people believe franchises aren’t capable of growing to meet their income needs.  But we have had clients who have been earning $50,000 and we’ve had clients that had previously been earning $500,000 – and they have all found a place in franchising.

Others believe that franchising is just “buying yourself a job.”  And there are some franchise opportunities that do fit those criteria.  And in today’s economy, if you could buy an opportunity where you could ensure your own ongoing income stream all the way through to retirement and get into the business for a very low investment, would it be a good idea?  For SOME people it’s not a bad idea.

But there is certainly more to franchising than just “buying yourself a job!”  What we hear more often is people wanting to invest and really grow equity.  They ALSO want that ongoing income stream…but the real goal is to build equity and sell it sometime down the road and have that money for retirement.  And franchising offers the opportunity to buy into a successful business model at a relatively low investment compared to buying an existing business and paying for someone else’s growth of the business.  And when you do go to sell the franchise, it may also sell for a higher multiple of income than an independent business (particularly if there is no other franchise territory availability in your market other than for someone to buy an existing one) and you may also find it easier to get bank financing rather than having to provide owner financing — since bank’s know that the franchisor will be there to support the Buyer as well.

Another myth that makes people think franchising is not for them is:  “The franchisor makes all the money”– the truth is…if franchisees weren’t making money, the franchisors wouldn’t stay in business.  There is a rather famous quote that states:  “Franchising is an industry that has made millions of people millions of dollars.”  Of course, you pay a royalty and the franchisor does make money – but if you can make the kind of money YOU want, does it matter that the franchisor is also making money?  You WANT them to be profitable and continue to grow and provide support and build the brand!

The idea that it will take 2-3 years before you can start making money is another misperception we hear.  That is a statistic that is much more applicable to a truly entrepreneurial start-up business than it is to a franchise.  In a truly entrepreneurial start-up, the entrepreneur is frequently so busy reinventing the wheel and developing the systems that even if their business does not fail – which statistically 50% do in the first 5 years and 90% do in the first 10  years – it still can take not only 2-3 years to make money, but frequently is just getting by 5 and 10 years into the business.  In a franchise, because you have the systems from the start, you can ramp up far more quickly…and you can also talk to other franchisees prior to becoming a part of any particular system and determine what the returns and ramp-up time should be before you even start.

And finally, we hear people say that they don’t want to work 24/7 – again…this applies far more to entrepreneurial start-ups than it does a franchise.  When you are given the systems from day 1, you don’t have to work as hard…or as long…because you can work smarter.  And there are many B2B types of franchises that are only open Monday – Friday

So…for all the ideas you may have had…ask yourself…is this what I think or is this what I know?  You may find that franchising holds a great opportunity for you.

 

 

Passion: Friend or Foe?

 

We all want to be passionate about what we do for a living, right?  After all, with the amount of time we spend working, we’re a lot better off if we feel passionate about our work, right?  And if we’re thinking of actually starting our own business, well, heck, we better really feel passionate about the business… right?!

 

Well… maybe.

 

If being passionate about the business is being passionate about the product, we’ve got a problem.  A client of mine, Chris, told me that he wanted to be passionate about the business he got into.  And although he had never held a sales position in his life (he was, in fact, a Chiropractor who had tired of the hassles of medical insurance companies and the increasing cost of malpractice insurance), he insisted that he could sell any product or service that he was passionate about.  But he discovered a problem.  Although he was passionate about health and wellness, he was not at all excited about getting up in the morning and going out and “selling” his new franchise’s gym memberships – and very quickly got out of the business.

 

The school teacher who looks into Kumon, the IT professional who looks into “Geeks on Call”, and the hairstylist who looks into Great Clips are all making the same mistake.  They are mistaking the business itself with the role they will have in that business.

 

So what happened to that old saying “focus on what you’re passionate about and do what you enjoy and success will follow.”  Well, there’s the catch.  The product or service itself has very little to do with what the owner’s role in that business will be.

A Passion…for What?

With all that said…passion IS important.  But be careful what we are talking about being passionate about!  I want you to be passionate about what you do!!  I’m passionate about what I do… and I think that if you are going to invest money in a business that you are going to work in, it’s great if you can be as excited and passionate about it as I am about mine!  But the difference is…you want to be passionate about what you get to go DO…not about the product or service.  And you want to be passionate about what the business will do FOR you.

 

I can promise you if the business doesn’t make money, it won’t be long before you will no longer passionate about it – so making money is important!

 

I can also promise you that if you’re working more hours than you want to be working (after some time learning the business) that you aren’t going to be happy either – lifestyle IS important. So look at whether the hours required are going to fit!

 

There are a whole host of other elements that are probably important to you as well such as the kind (white or blue-collar?) and number of employees you have; whether you have business or individual customers, etc.  This is where “building your Entrepreneurial Profile” becomes so important – so that you really know what you are looking for before you start picking franchises wildly off the internet, and you can assess them by pre-determined criteria.

 

Passion is more about what you are being (a business owner) than it is about what you are doing (selling gym memberships).

Overcoming the Fear of Starting a Franchise

Alex had been successful in the corporate world and had no intention of leaving it.  Sure, there was the inevitable corporate politics, bonuses that didn’t come through, and periodic moves to multiple cities to climb the corporate ladder.  But it was familiar.  Comfortable.  “The Devil You Know.”  So when Alex lost his job in a corporate reorganization, it was no surprise that his first inclination was to start sending out resumes and looking for that next job.  He started exploring franchise opportunities on a whim on a slow day, but never really intended to make an investment in one because he saw that as too risky, too different….too scary!

Change from what we know is always scary.  And if you’ve been in the corporate world a long time you are probably much more accustomed to doing your job well, knowing that a paycheck is coming for that work.  But starting a franchise is different.  There is no paycheck for your work when you first start.  And there are no guarantees.  Find me someone who wasn’t afraid the first time they started a business and I’ll show you someone that had nothing to lose.  But for most of us, there is indeed “something to lose” as we embark on something different and that’s what makes the change appear scary.

Fear of starting a business is scarier than jumping out of a plane for 1/3 of Americans according to a 2014 survey by Wakefield Research.  So what do you do if, like Alex, you are nervous even thinking about leaving the perceived security of the corporate world?

What makes the difference in people who move past their fear to become successful business owners is NOT that they aren’t fearful, it’s the way they manage that fear.    They don’t let the fear rule them – they focus on their goals, get the facts, and have a positive mental attitude.

 

  1. Focus on Your Goals – Remember the “Why”

What is the reason you thought about investing in a franchise to begin with?  For most, the top items include many of the following:

  • Having control of your own destiny
  • Work-Life balance and a flexible schedule
  • Potential increased income potential
  • No more corporate politics and no more layoffs
  • Enjoyment of your role in the business (not to be confused with loving the product or service)
  • Being able to call your own shots
  • Making a positive contribution to your community and/or providing employment opportunities
  • Building equity to have something to sell when you want to exit, or to leave to your kids

Picture what your life will be like in 5 years if you go the corporate route…and what it will be like in 5 years if you invest in a franchise.  Where do you have a better opportunity to reach those, or any other, personal goals?

 

  1. Get the Facts – Do Your Research

FEAR can be seen as an acronym for False Evidence Appearing Real.  So many times we let our perceptions (or misperceptions) keep us from our dreams.  Are you checking your perceptions along the way?  Ask yourself, “is this what I think…or is this what I know?”  Get the facts and do your research!  In franchising, unlike starting a new business from the ground-up, the nice thing is that you really do get to do an incredible amount of research before signing an agreement or embarking on your venture.  Before you make a decision and sign an agreement, check yourself – have you:

  • Had numerous conversations with the franchise rep to understand the model, the marketing, the site selection, the support, the IT infrastructure, the fees, the owner’s role?
  • Talked to other franchisees to get details about “a day in the life”, and learned about what successful franchisees are doing as well as what the ones who aren’t successful?
  • Developed your own proforma so you have some reasonable expectation of what it will take to fund the business and what it will take to get it to break-even…and what the returns should or could be? (a conservative as well as potential projection?)
  • Met the franchise team that will be there to support you at either a “Discovery Day” or “Meet The Team Day”? Does the company feel like a good cultural fit? (a gut check matters!) Do you believe that you will get the support you need?

With all that research, you should have a pretty good idea of whether you can do what it takes to be successful….and if you want to do those things.  You should have a good idea of what the challenges are as well as the rewards and a good picture of the funds needed.

 

  1. Keep A Positive Mental Attitude

When we first embark on something new, it’s easy to focus on all the things that can go wrong.  And it’s easy for someone to respond with the platitude, “yes – but what if they go right?”  Fear is part of our survival instinct and it’s natural to still have concerns and to think about worst case scenarios.  At the end of the day, here’s the question:  is there any logical basis for those fears or is that our lizard brain – (the part responsible for primitive survival instincts, that “flight or fight”) acting up?  Have you been successful in your prior endeavors?  Have you done your research and determined that your role in this business is a good fit for your skills?  If you’ve been a top performer in your prior roles and you are a good fit for this one, is there any reason to believe you won’t be a top performer here?  One of the greatest traits successful people share is an optimistic outlook.  Douglas Grant (and many other inspirational speakers) remind us that “In life we don’t get what we deserve, we get what we expect.”  Focus on the positive!

 

 

At the end of the journey and all your research and all your introspection, are you still feeling fearful?  You’re in good company!  There is always at least some leap of faith in embarking on a new business venture and if you had no fears or qualms at all we might need to question your sanity.  Actually, we have yet to talk to a client who, at the finish line, didn’t express some degree of nervousness.  But if you’ve set your goals, gotten the facts through your research, and visualized yourself in the business, and liked what you saw…you can be prepared to soar.

So what happened to Alex?  He took the leap, invested in the franchise, and more than 10 years later he has grown his business to multiple units.  He has bought a lake house, put the kids through college and is debt free.  He takes his family on at least 2 major trips a year and he and his wife take long weekends regularly.  “It wasn’t always easy,” he says, “but it has taken me to heights I never would have dreamed of when I first started.”

Here’s To YOUR Success!

   “Every great move forward in your life begins with a leap of faith, a step into the unknown.”

Myths vs Facts when Deciding if Franchising is Right for You – part 2

There are a lot of myths and misconceptions about business ownership and probably more still about franchising. This week, we’ll look specifically at the myths related to the kinds of franchises available and what makes a “good” franchise.

MYTH: : Franchising isn’t for me because I am not interested in food or automotive franchises
FACT: There are franchises in most industries you can think of from clothing to cosmetics, senior care, printing, educational services, taxservices, fitness, florists, consulting, advertising, personnel, residential cleaning, packaging, pet services, sign products, computer services, hair salons, dry cleaning…and the list goes on. If you were going to make a decision as to what business to go into based on the product alone, you would certainly be able to find something that was of interest to you. More importantly though is what your role as an owner will be.

MYTH: : Franchising isn’t for me becauseI don’t want to work 24/7
FACT: Most people don’t! And the fact is that most franchises don’t require it. In fact, there are many Monday-Friday 8-5 type opportunities in B2B realm, providing needed services to business consumers. Even in the start-upphase of a franchise, it is NOTthe grueling 80-100 hour weeks you hear entrepreneurs complain of since the systems are already in place for you and the owner is not required to innovate systems in areas they are not experts in. I’m not promising you a 40 hour work week either in those start-up days…but when did you get that promise in the corporate world? And after the business is up and running, it frequently IS possible to put a manager in place and spend less time in the business.

MYTH: : Franchising isn’t for me because I can’t replace my big corporate income without having a lot of employees –and I don’t want a lot of employees!
FACT: Managing a lot of employees is not required to make a lot of money. Managing a lot of employees –or not–is simply one of the choices you have in evaluating what franchise might be right for you. For some people, having a lot of employees is how they measure their success and they enjoy having the complexities of a large business. For others, if they could make the same amount of money with 2 or 3 employees they would be happy. Fortunately there are options like that available.

OK…so you’ve decided franchising actually might be a good way to help you achieve your goals. There are still some myths and misperceptions that can ambush you as you look at whichfranchise represents a good opportunity for you.

MYTH:The market is already saturated–there’s a business like that on every corner
FACT: If there’s one on every street corner, there’s both demand and profitability. So if you invest in a franchise that competes with all the independents that are “saturating” the market, do you think you can compete effectively given the
sophistication of a franchisor’s expertise compared with the mom and pops relative lack of resources and sophistication? Look at where you got a massage 20 years ago (if you got one at all)…it was a high end spa or resort. But now Massage Envy is everywhere and there are all kinds of other franchises in the market as well that are taking vast market share away from all the independents. Finding an industry that is still dominated by the independents –even if you perceive it to be saturated by them –may represent a great opportunity.

MYTH: The best way to make money is tobe in a “hot” industry
FACT: The problem with looking at what’s hot today means that by definition at some point in the future, something else will be “hot” and today’s opportunity may no longer fit that bill. We’re looking at investing in a business here –not day trading! So finding a good solid business with consistent demand may actually represent a far greater opportunity than that “hot” new kids play place.

MYTH: Franchising is only good if you can have a big name brand
FACT: Obviously with thebig brand name you get customers to come to you based on that name recognition, you have a long track record of proven success, strong support by the franchisor anda consistent message of what the best practices are. And there certainly aregood opportunities in those big brands out there. However, there is another consideration here which is to look at the potential for growth. By the time a franchise has become a name brand, the opportunity for growth can be very limited. It can be difficult to finda (good) location and territory encroachment can be a real problem as more and more of the same brand squeeze into the marketplace. So buying that big name brand can, in some cases, also be like buying tech stocks in 1999.For my money, I’d much rather look at the strength of the franchisor’s training and support and their ability to grow market share rather than whether they already have the market share.

One of the important things to remember in investigating franchise opportunities is to distinguishfacts from fiction and also to distinguish facts from what may be misperceptions.

Myths vs Facts when Deciding if Franchising is Right for You – part 1

There are a lot of myths and misconceptions about business ownership and probably more still about franchising. To help you decide if franchising might be right for you, let’s separatesome myths from facts.Here, we’ll look specifically at the myths related to franchising and money…

MYTH:Franchising isn’t for me because franchise businesses are too expensive
FACT: According to a survey by Franchise Times, over 50% of all franchise opportunities have a total investment of less than $100,000total. Close to another 33% require investments of less than $250,000. Typically you will need to invest at least $50,000 of your own liquid capital –and also your actual cash investment may besomewhere between 30-50% of the total investment.

MYTH: Franchising isn’t for me because I can’t wait 2-3 years to make money
FACT: The earnings vary dramatically among different franchises, but a broad sweeping generalization would be to expect the business to break even in some 6-12 months and then begin to return some level of income to the owner. There are businesses in which the owner can start to earn a 6 figure income in year 1, some that take 2-3 years, and there are others that will neverearn the owner that kind of income. It’s important to do your research to make sure the franchise you invest in has the potential to meet your goals.

MYTH: If I can’t earn what I’m earning in my corporate job, it’s not worth it
FACT:Before you make thatabsolute determination, you might want to look again. First, it’s not necessarily what you make…it’s what you get to keep. Business owners have tax benefits that enable the owner to have greater spending power with their gross profit than they would from a paycheck by taking advantage of legal tax benefits in which the business can pay for things on a pre-tax basis. Secondly, how much can you sell your job for when you leave it? You business should be developing equity that may better help you reach your retirement goals than simply contributing to a 401k plan.

MYTH: Franchising isn’t for me because I don’t want to just “buy myself a job”
FACT: The goal of many franchise owners is actually notto work intheir business, but to work onthe business. In his book, “Rich Dad’s Cash Flow Quadrant,” Robert Kiyosaki gives the definition of wealth as a relative term depending on how many days you can notgo to work and still maintain the same standard of living. By that definition, the goal of franchise ownership is to have a business that extends beyond your own contributions so that you will still be able to receive income if you are not involved on a full time basis.

MYTH: : Franchising isn’t for me because I can’t replace my big corporate incomewithout investing a lot of money
FACT: There is no automatic correlation between the amount you invest and the amount you can make. There are business opportunities with a total investment of less than $100,000 that can net the owner more than some $1 million investments. One way to minimize your risk is to find the business that will get you to your goals and to invest as little as possible.

MYTH: The Franchisor makes all the money
FACT: Not so! The upfront franchise fee frequently does little more than cover the franchisors cost of getting the new franchisee into business (their time in training, helping with site selection, manuals, support, etc.). As for ongoing royalties, franchisors know that franchisees have a nasty tendency to ask “what have you done for me lately?” And they know that they have to provide ongoing value for the fees they are paid. So the royalties cover their ongoing support costs and, yes, they do make some profit as well (that’s why you’re going into business too, right?)But in a strong franchise system, you should be able to look at the fees that you are paying and be confident that it would cost you more independently than what you are paying the franchisor if youyourselfhad to create the systems they have yourself; create the branding yourself; and get the ongoing support from another source that the franchisor is providing.

Next week we’ll look at some of the other myths about franchising –what the opportunities are and what makes a “good” franchise.

The Benefits of Owning a Franchise

It’s been estimated that less than 12% of the businesses in North America are franchised, but they account for over 50% of all North American retail sales –more than four times their share of the dollars. And there’s areason why franchisees get more than their fair share of the market. In general,franchisingoffer you:

  • Experience: franchises already have units up and running. This means that you can avoid expensive start-up mistakes
  • Training: You’ll be taught what you need to know to start and run the business
  • Support: You’ll have the advantage of ongoing managerial, marketing, sales support and research and development to keep up with the changing times and market conditions
  • Support of other franchisees: this is a frequently overlooked benefit, but franchising is probably the least political system going with the vast majority of franchisees really working togetherto “row in the same direction,” build the brand name and contribute to one another’s success
  • Advertising: Professionally prepared and well tested advertising can give you a huge advantage in a competitive market. Cooperative advertising programs with the company and other franchisees can provide national exposure at a more affordable price
  • Site Selection: You’ll receive advice in selecting a site and arranging the interior for your most efficient usage
  • Name recognition: Brand names bring more customers into the business and provide a competitive advantage that independent units can never afford
  • Speed and Efficiency: The franchisor will save you time in starting up so that you can begin working with customers right away instead of trying to work out unforeseen problems
  • Simplicity: Franchisors try to keep your business as simple as possible so that you can concentrate on the activities that will make you the most money
  • Friendship: Because franchises often tend to attract certain personality styles to each type of business, you will find many like-minded people in the group. You’ll make friendships that canlast a lifetime.
  • Friendship: Because franchises often tend to attract certain personality styles to each type of business, you will find many like-minded people in the group. You’ll make friendships that canlast a lifetime.
  • Regulation: franchisor business practices are tightly regulated by the Federal Trade Commission. You will be provided with a good deal of information that is required by law for the franchisor to disclose before you ever make theinvestment. Some of the disclosures include the names and contact information of every single person in the system; any lawsuits or pending litigation; background on the management team and corporate financials.
  • Financing: While franchisors do not provide financing directly for their franchisees, it is relatively easy to get loans for a franchise given the proven track record of success. Having said that, however, you should know that business loans are quite different fromhome loans: in mostcases you will need at least $50,000or moreof your own capital before the bank will finance the rest. Typically, what you will need overall is somewhere between 30-50% of the total investment
    Good franchisors are committed to your success: They are no morethan a phone call away from the day you sign your agreement to the day you sell the business or turn it over to someone else.

7 Reasons To Use a Qualified Franchise Consultant

  1. Education: There are a lot of myths and misperceptions about franchise ownership,and sorting out the fact from fiction can be confusing. A consultant can provide valuable information that will enableyou to make a truly informed choiceabout what your options really are, what the owner’s role in various businesses really is,and what it takes to succeed as a franchisee. The key is to have all the facts and not to make a decision based on emotion, such as someone who thinks: “I love golf so owning a golf franchise will be perfect for me”, or missing an opportunity that could be perfect because the franchise doesn’t “sound exciting” when in fact –if you really knew what the owner’s role in that business was –it might be a perfect fit.
  2. Helping you define for yourself what you’re really looking for: most people start with the premise that they want something “fun” and something that they’re “passionate about” and, of course, something that “makes lots of money”. But what does “fun” mean for you? Do you want to stay in one location and have customers come to you, or do you want to be out calling on customers? Do you want to manage lots of employees, or a few or none? Do you want a casual environment or professional? Do you want a business that’s only open Monday-Friday or are retail hours ok? It’s important to know your criteria before you get started looking for a business.
  3. Saving you time: There are a lot of great franchise opportunitiesout there. There are also a lot of, well, shall we say, not so great ones. And then there are some that could be great for someone, but maybe not for your particular skills, finances, values or goals. Do you really want to spend your time investigating all of them? A franchise consultant can help youfocus your energies on the ones that have good validation by current franchisees, strong reputations within the franchise community and good overall potential…and that are a good fit for you.
  4. Expanding Your Choices: Frequentlypeople are concerned that working with a broker will limit their opportunities. There are close to 5000 franchise concepts here in the United States and, after all, brokers don’t work with allof them. But the truth is that many people findthat brokers actually expandtheir opportunities and introduce them to great concepts they would otherwise have missed. In fact, about 80% of all people who do work with brokers will tell you that they never would have found the opportunity they investedin on their own.
  5. Helping you with the research and due diligence process: In the same way that franchising works because you have a proven system to follow, there is a proven system to findinga franchise. A franchise consultant can help guide you through the process and make sure that you get all the information you need before you sign on the dotted line.
  6. Helping you with referrals: Both before you invest in a franchise and even after you enter into an agreement with a franchisor, you are going to need help in finding good people to work with –a franchise consultant will have good referrals for many of the services you are going to need both in making the decision and in starting your
    business such as a franchise attorney, CPA, lenders –both SBA and other alternative forms of financing as well as many other service providers.
  7. Last but not least, it doesn’t cost you anything: the services of most franchise consultants are free to you, the potential franchisee. If you invest in a franchise that the consultant has referred you to, the consultant receives a commission from the franchisor –in much the same way that an executive recruiter receives a commission when they place a candidate in a job. Your investment is exactly the same whether you use a consultant’s services or go directly to the franchisor. This is a marketing expense of the franchisor to bring them qualified candidates