Archive for category Franchisees

I’m thinking about going into business, should I?

A friend and I were chatting, he is to be made redundant, and after many years in his role with a big multinational he stands to get a good pay out. He’s still got plenty of time as an able bodied worker and wants to work… But.

There have been a number of larger businesses fold up their operations locally and he’s not about to move out of the area. He could invest the money and watch it grow, his wife is still working a fair bit so that could be useful, but he would probably get bored (in fact I know he would…)

Doesn’t take long before his mind turns to business. “Hey Steve what do you recommend? One of those franchises or???” Well it’s like this it depends on what you want to do I thought.

It turns out someone had given him the hint that a franchise could be useful, I set him thinking by asking… “What do you currently earn per hour, and do you think you could earn that in a franchise, especially if there are people being put off work in the area…” It got him thinking.

But the temptation is there, to the untrained eye it could look okay, you get the system, you milk it and the planning side is partially done, the brand image is there? What more could you want? In all honesty a LOT more.

And here is where most people seem to go astray, they get emotionally wound up in the idea “Be my own boss? YEAH!” and the rest they say is history… It’s all very well for me to say “Go do your homework…” But what if you don’t know what to REALLY research?

So the short answer is to ask lots of questions, check out lots of options, and get savvy on the language, biz speak can be daunting for those not in the know.

In any business there are risks, so before you commit your funds find as many people as you can in that field then ask them lots of questions. In fact I suggest you get to more than 10 in any one group, and then more in other groups as well.

So do the due diligence, and make sure the full on emotional satisfaction you feel in the beginning is something that will last well into the future, just in case things go “belly up”.

Watch where you step…

Another franchise buying tip for the non business person.

You are excited about the business you are looking at and in most cases you have gone out on a limb  and “emotionally bought in” to the business and no matter what someone tells you, you are going to buy it. BUT to be sure you have made sure and made an appointment with the franchise groups marketing and sales dept and want to find out more.

In essence  you have already bought and the more details you seek from the company (who’s main interest is to sell you a franchise) the more they know you are interested. However the smart person will take this step and make it just another part of their research… but watch out for the things that some people would say are sneaky habits the sales crew might use.

– There are limited opportunities – We are selling x No of territories per week, so don’t miss out. This is often true but how long has the territory you are after been on the market? is it a resale and if so why? Get in touch with the previous owner and hammer them for info, the real info not the trumped up “Oh I have a back injury and can’t continue…” ask about the turnover, the profits, and the customers perhaps even the staff they had or still have etc.

– A good operator can make a real go of this franchise – Then ask them to define a good operator, if its a person that works 16 hours per day, 7 days a week then you might need to rethink things. Call up existing franchisees and see what sort of commitment they are putting in and the payola for that.

– Your time is your own – Sure you might have time flexibility but at what cost? If you take a day off to go to kids functions, performances etc will the income drop for the time you are not there (especially if you are a one person franchise).

– We support and train you – Okay what sort of support do they really give, ask the other franchisees when you do your research… find out how they practically put in to make your business be all it can be. Do they hep your with business plans, do they review business plans? and the list goes on.

– It’s a great lifestyle choice, you can be your own boss! – So what’s the advantage in that? Often it means more headaches than just working for someone else. Start asking people in business about being a boss and what that might really mean to you.

These are just a few, but I  hope it helps  you to “see through” the surface information to find the real  meat in the sandwich, not just the fillers.

Watch your language!

If  you are out to buy a franchise watch out for this trick designed to lure the non business person into their lair…

– Income guarantee –

You currently have an income with a job, you get $$ to take home and spend… that’s the usual definition of income, but in business circles this can be used to have you thinking that, but in fact  you get income that you then have to pay the costs of doing business out of. In fact it should be stated that it’s a turnover guarantee, then once the costs have come out you are left with some $$ (if you are lucky!) and then you can take your income out of that.

The lesson know your business terminology, get a glossary of business terms and make sure you  have a solid understanding of this important area so you can talk turkey and not feel like one!

So you are in business… Are you making any $$?

You have the business set up and things are running ok. You handle customers well, you pay the staff, you keep things ship shape in the bookkeeping area, all seems well, but are you making any money, real money, real income?

In the scheme of things those that have gone from an employee to a business operator will no doubt note there is a big difference between turning up and getting paid and turning up and wishing for more customers, the hassles to stop, and the seemingly endless challenges that creep up and take you by surprise.

Lets do a basic sum here, if you were on $700 a week income (take home) in a job, you had few hassles, in fact you got paid if you were sick, or on holidays… Now as a business owner you are the boss and you only get holidays if your business earns enough, if you trust the staff to run things while you are away etc… the list probably goes on AND ON!

In your business you need to be able to take into account a range of things to ensure viability, the cost of overheads, materials, marketing and so on, then have a margin on top of that to cover wages… then a profit (remember to pay yourself from the wages area!)

So the way forward is to project the cash-flow for your business and see if the amount you have to earn per day is do-able, and not outside your threshold for earning… As an example, if you are used to earning $700 per week, imagine how it might be if you have to turn over $700 in two days, just to make ends meet. For some that trips their mental threshold on money and they fail fast in the business stakes due simply to this psychological hurdle.

Once you establish the cash-flow for the business and how it fits with your money threshold, then ask are other businesses in this industry area able to do that with ease… or is it a struggle?

Answering the vital questions on cash-flow will either open a “Pandora’s box” of issues and hassles, or show the way to prosperity from being in business.

Here’s a tip, if you are currently employed and are thinking about going into business on your own, take a few days leave and check out what similar business types do… if it’s a retail store do some serious spying on them to see how many customers walk in the door, and at what time. Then check out their marketing, is it enough? Is there too much competition? Or is there scope for a new player in the game to take the lead and give it a good shot.

So if you go into business and take the inherent risks that go with that notion, consider the above points carefully, otherwise you may find you will work flat out and get nowhere fast, in fact it may cost you a great deal more than the initial investment.

How to train to Win/Win

From an original article on various business success pointers, here are the individual “how to” possible options for you to explore.

Training to win/win
You and your staff should be trained to make the whole show win, then the customers can win too. A great position to get to and stay in.  For some the idea of training staff means showing them the bare basics of their job, but go a bit deeper and encourage thinking around the idea of Win/Win, when they get the idea the concept will probably become infectious.

  • Find out more about win/win and how you might create some examples you can discuss with your team.
  • Look for examples of win/win already at play in your business.
  • Use the concept to develop a team get together every so often to ask about and pass on ideas in business development.

Getting all this together is a great way to cause the team to work effectively together and can build the business to a strong position where people feel valued. This will then pass on to the customers and cause them to feel valued as well, in the end that’s what we all want.

How to create a business with great values

From an original article on various business success pointers, here are the individual “how to” possible options for you to explore.

Upholding great values
People love it when you are on a positive footing and in the values area it’s a great place to start (integrity – honesty, truthfulness etc.).

Start the business with a strong stance on the rights and wrongs, if you get caught by a staff member or a customer ripping people off, word will spread fast, not a good thing to have happen. Make your act squeaky clean and others will follow.

Make a list of the sorts of values you want the business to uphold, google them on your computer and find out more about what other businesses have as values, then find ways to integrate them into what you do, yes even if you have a one person business.

You may find you already have these values, they are automatic and things that inherently are of interest to you. But there may be areas you want to tweak so you can be better at those ones as well.

Over time the staff and customers will be certain to know your business has high integrity, honesty etc.. In a highly competitive market place these things can set you apart.

How to create a business where the overheads are easily covered

From an original article on various business success pointers, here are the individual “how to” possible options for you to explore.

Covering overheads easily…
Overheads are often the thing, which can break the camels back, so make it easy for the camel and take the pressure off. In this case keeping the turnover and cash flow up so the overheads are not a challenge EVER! (I know, easier said than done…)

  • Sell things which are wanted by your target ‘ideal customers’ this will mean you have things moving in and out again fairly quickly, and that’s good for business.
  • Set your pricing right, sure beat your competition if you want, but make enough to make a profit too, then you are sure the overheads are covered.
  • Know what your industry average is for turnover and profits, this way you can measure (benchmark) against the industry average and see how you fit in the scheme of things.
  • Ask your customers what they want more of, it might be as simple as “better service” then you will know “It’s not the products or after sales service it’s the SERVICE!”
  • Know exactly how much your overheads are and how many things need to be sold per day to cover them, then anything over this amount puts you ahead.
  • Know what is selling and what’s not, aim to make every square inch of your sales area sell well, (even if it’s an online page!) simply by providing more of what your customers want. perhaps just moving something to another spot in your ‘store’ will make a difference.

Getting an objective view of your business is vital to figuring out which areas to focus on to improve cash flow and keep your overheads under control, so ask lots of questions, observe thoroughly what’s going on.

Now put these things into action and watch the results alter in a positive direction.

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