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Franchise vs. Start-up: Entrepreneurs Can Enjoy All the Benefits Without the Risk

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Franchising is a popular option for entrepreneurs pursuing business ownership. However, franchising and start-up businesses are two distinct concepts that share many aspects while also having significant differences.

Many aspects of the start-up model are shared by franchising. For example, both involve businesses that sell goods or services, and the start-up owner or franchisee is in charge of the business's day-to-day operations, such as hiring and supervising employees, ordering inventory, marketing the business, and keeping financial records.

One significant difference between the franchise model and start-up businesses is that franchisors provide extensive training for all aspects of the business. As a result, you receive a ton of assistance and direction on managing the business on a daily basis rather than having to figure everything out on your own.

The level of support franchisees can expect from the parent company far exceeds that of a typical start-up business owner and includes supply agreements, national marketing campaigns, and administrative support. Because of the franchisor's support, the franchise model is much less risky than other types of businesses.

The franchise system was created to maximize profits for all parties involved, including franchisors looking to expand their brands and franchisees striving to operate successful businesses.

Consumers win because the franchise system has made it possible to market a wide range of products and services more reliably and affordably than start-up owners could have done alone.

For those looking to reduce their risks while still benefiting from a successful business, the benefits of franchising clearly outweigh the benefits of other business models.

If you want to explore your entrepreneurship options, please schedule a brief call here.

Top 6 Financial Questions to Ask Before Buying a Franchise

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Finding out how much money you need to invest is an important step in the franchise research process. Here are my top six financial questions to ask when considering purchasing a franchise:

1. What kind of revenue can I expect from this franchise?
Many factors will influence the answer. A range of incomes may be found in the franchisor's FDD (Franchise Disclosure Document), which the franchisor will provide. This information, however, is not required, and the range may be too broad to be useful. Validating with existing franchisees is your best path to get more information on revenue generated by existing franchisees at the brand you are investigating.

2. How much money is needed to start this franchise?
It is critical to know your upfront costs for purchasing and operating the business until it turns a profit. Reading the estimated investment section of the FDD will provide you with general information about these costs.

3. How long will my new franchise take to break even?
During the start-up phase of your business, you may not make money. The important first step is to find out when you can break even. This is when the business is covering its own expenses. It’s important to go in with the mindset that you must first build your customer or candidateele, which can take some time for some businesses, then scale to grow the business’ profitability.

4. How much working capital will I require when my business launches?
Working capital is the money you will need to put into your new business after it opens until it begins to earn as much as you are spending. Some items to consider are the following:

  • Operating costs
  • Your lease
  • Cost of employees
  • Equipment and utility costs
  • Personal living expenses

5. What options do I have for financing my franchise?
There are numerous ways to finance the purchase of a business.

  • Bank loan
  • ]SBA (Small Business Association) loan
  • Borrow money from your retirement account
  • Loan from family and friends
  • Take on a business partner/silent investor partner

6. How financially strong is the franchisor?
When looking into franchise opportunities, this might not be the first question that pops into your head, but you should still ask it. The franchisees will be supported by a franchise company with solid financial standing.

One of the most important steps in your franchise research process is to get the answers to these financial questions. Then, if the answers satisfy you, you can be confident that you are making the right decision when purchasing a franchise.

If you have questions about what to consider for franchise investment, please schedule a brief call here.

Franchising Fears? Learn The ABCs of Fear Management

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When considering business ownership, it's common to have competing voices in your head. "Go for it!" says one. "It's too risky," says the other, louder voice. Fear takes over and causes paralysis.

With any major life change, fear is normal. But do you want fear to make decisions for you? How do you make it work for you rather than against you?

Follow this ABC model to ensure you have the right mindset:

A: Acknowledge

Acknowledge that there can be a lot of emotion involved when thinking about starting a business. To manage all of those emotions, you must make strategic and tactical decisions.

  • Explore the ideal methods for running a business.
  • Determine why you decided to take this route in the first place.
  • Acknowledge the importance of staying on track to achieve your goals.

B: Base Knowledge

Fear can be reduced with knowledge. The information you gain will put you in a better position to succeed. Examine the business model by learning more by asking questions. Furthermore, it is critical to understand that you will not be able to get all of your questions answered; however, you will be able to get enough of your questions answered to make an informed decision.

C: Courage and Purpose

You will face many decisions as a business owner. Allowing fear to paralyze your decision-making process can lead to frustration and a loss of confidence. Therefore, it's crucial to master the technique of progression.

Making no decision is a decision not to move forward. Consequently, fear management is a skill that you must practice.

Develop the ability to move forward rather than freeze. The more decisions you make, the further you will progress. The more you try new things, the more confident you become. You will become more aware of your courage, capability, intelligence, and resourcefulness as your confidence grows.

Think about the bold choice you just made. How will you deal with that decision?

You have the option of allowing the challenge to paralyze you or of progressing and building your confidence and courage to achieve success.

If you would like to talk about the importance of fear management in franchising, please schedule a brief call here.

It’s a Myth That You Must Be An Expert In The Franchise’s Field To Be Successful

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Many people believe that in order to buy a franchise, they must be an expert in the field. This is not true. One of the best aspects of franchising is that you can be successful without knowing anything about the industry. All you need is some managerial experience and business knowledge.

There are numerous franchise opportunities available, each with varying levels of training and support. The franchisor will train you on how to run your own business. So to own a successful franchise, you do not need to be an expert in the field.

So, how much experience do you need to start a successful franchise?

The most valuable experience you can bring is that which can be transferred from one industry to another, whether you're making donuts or repairing water heaters. Keep in mind that you’re not doing the physical work. You’re managing the people who are.

Managers must help everyone do their best by having a bird's eye view of the business. From human resources to customer service to sales and marketing, a good manager should be able to deal with various personalities, respond to crises, solve problems, and generally be at ease around people.

In other words, your ability to hire good people and communicate with customers is far more important than your ability to turn a wrench or repair a faulty hard drive.

However, experience alone will not get you far as a franchise owner. You must be driven and motivated. If you don't have a get-up-and-go attitude, no amount of experience will help you be successful.

If you would like to find your franchising path, please schedule a brief call here.

5 Signs That a 9-to-5 Job Is Not Your Destiny, So Consider A Franchise

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1. The Sunday Scaries
Every Sunday night, you have that sinking feeling that the workweek is right around the corner, and you dread it. And you begin to consider starting your own business. Why not a franchise business?

2. You're Stressed Out In A Bad Way
A little stress can go a long way, but too much stress is unhealthy. If your job is the common cause of your moodiness, inability to sleep, or back pain, it's time to make a change.

3. Following The Company Line Causes You To Break Out In A Cold Sweat
The idea of adhering to your employer's values is no longer appealing, motivating, aspirational, or anything else positive.

4. You Simply Don't Care
If you've emotionally left the building, then it's time to move on. We all work for the majority of our lives. Our focus should be on doing something we enjoy so that work isn't just a job but a passion.

5. Obsession With Small Business Content
Your interest in reading blogs about small businesses has turned into an obsession. With so many blogs, podcasts, and Facebook groups devoted to running your own business, you could easily spend your work week consuming content you enjoy.

Are You Checking Off These Boxes? Maybe A Franchise Is For You

These signals indicate that you have subconsciously left your employer and that it is time to make your dreams of owning your own business a reality.

A franchise provides new business owners the security of a tried-and-true system and a well-known brand. From the start, they offer new owners years of experience and knowledge. In addition, a franchise business connects you to a community of fellow franchisees who are also striving to grow and prosper by owning their own business.

Are you bored with your 9-to-5? Please schedule a brief call here.

I Stepped Out Of My Comfort Zone And Found A Passion For Franchising

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I would like to share something personal you might not know about me. Before finding my true passion in franchising, I was working in real estate and started my entrepreneurship with mom-and-pop business ownership investing a small amount with a couple of partners. I quickly realized how much work I was putting into my small investment, building systems and processes with no road map.

Working in real estate got me my start, but working at my mom-and-pop gave me the motivation and allowed me to meet some wonderful people and lay a solid business foundation. But it was when I stepped outside of my comfort zone and invested in a franchise that I discovered the true thrill of entrepreneurship.

Now, franchising is my unwavering passion. Why?

There are numerous benefits to franchising. The first is the tried-and-true franchise processes and systems. These were developed by the franchisor and have proven to be successful. Because you are building on what others have learned before you, franchise systems save you time and money that would otherwise be wasted in an independent small business.

Another advantage of franchising is there are no limits to your opportunities, and you can always have peace of mind knowing you are building equity. In addition, you are creating something that you can pass on to your children.

One of the most important perks of franchising is the reassurance of knowing you aren’t alone on your journey. You have a support network from the start, which reduces stress throughout the journey.

Not only do I appreciate the support of my franchise network, but franchisees are, at their core, local business owners and community members. Therefore, I believe it is critical that we assist those who are new to the area or the franchise.

Last but not least, the most important aspect of franchising for me is the lifetime friendships I've formed with people from all over the country.

There's a lot to love about franchising, but for me, the relationships are what matter most.

If you would like to find your passion for franchising, please schedule a brief call here.