Archive for March, 2009
Value is the number one concern of many prospective business owners. The first thing new business owners typically ask is, “Can I afford this business?”
The answer to this question is one of the key factors that will ultimately determine the entrepreneur’s business decision. Franchising – as opposed to many other business opportunities – has an advantage for cost-sensitive entrepreneurs. By law, the franchising company must disclose all costs and fees up front in their Franchise Disclosure Document (FDD) before anyone signs on the dotted line.
Some of the key things to look for when reviewing the company’s FDD are the following:
- Initial Franchise Fees – Most franchise companies require a new franchisee to pay a one time initial fee to become a franchisee. These costs can vary significantly, so it’s important to research if carefully if you’re looking for a low-cost franchise.
- Royalties - These are the ongoing fees you pay back to the franchisor. This fee is normally expressed as a percentage of the gross revenue of the franchised business, but can also be a fixed periodic amount, regardless of revenue.
- Marketing – Franchises often require participation in a common advertising or marketing fund. This fund is frequently a national program, but it can also have a regional or local market focus. As with royalty fees, this can be a fixed contribution or calculated as a percentage of revenue.
- Required Purchases – Franchisors often require you to buy certain products from them or specific vendors. Just make sure the prices are competitive.
When determining the best low-cost franchising option, you need to really look at which option delivers the better value. Who is more fair and reasonable in relation to the fees and costs that are charged?
One franchise that meets these standards is Instant Tax Service, which was recently named by Entrepreneur magazine as the number one low cost franchise opportunity. Also named the number one new franchise and one of the fastest growing franchises in the country by Entrepreneur, Instant Tax Service is now actively seeking qualified candidates who are interested in working just 17 weeks a year in a recession-resistant industry.
In addition to a low cost entry point, Instant Tax Service also provides comprehensive training, marketing support and all the resources necessary to get business owners up and running – with or without initial experience in the tax preparation business. Instant Tax Service can also provides franchisees with the flexibility to work just 17 weeks a year during the January-April tax season.
Check out the Instant Tax Service digital brochure for more information, or fill out a request for information here to see if this is the right opportunity for you.
Deciding to go into business is one of life’s major turning points – and a very exciting one at that!
There are a lot of franchise models out there, and choosing the one that best fits you is critically important to ensuring long-term success and personal satisfaction. Here are some key factors you should think about as you explore the world of franchising.
Define Yourself
The first step in finding the right franchise is to look inward. What are your strengths and weaknesses? Are you a team player, or do you prefer to work alone? What are your skill sets? Are they easily transferable to a variety of industries, or just one or two in particular? Only after you’ve done a thorough self examination will you be prepared to make a major business decision that could impact the rest of your life.
Choose an Industry that Interests You
We all know people who hate their jobs. One of the greatest advantages you have when buying a franchise is the freedom to choose an industry you’re interested in. The very first thing you should do when investigating a franchise is to narrow down your choices to just a handful of industries. If you don’t like pizza and are allergic to cheese, it’s probably not a good idea to buy a pizza business – no matter how good the investment may look.
Popularity Doesn’t Always Equal Profitability
Another big mistake people make when deciding what kind of franchise to buy is choosing a franchise based on popularity. Just because you see the same burger joint on every corner doesn’t mean that burger franchise is right for you. Don’t get caught up with popular trends or popular concepts. Always keep your objective in mind – and that’s to make money and have fun with your new franchise investment.
Do Your Research
Study the franchise concept you’re interested in. Find out about their history, pace of growth and potential geographical areas of expansion. Find out how many franchises in that business were opened during the last several years and how many – if any – have closed. This will give you a good idea of the stability of the operation.
Decide what you can Afford
Remember that there’s no harm in asking a lot of questions. In fact, you should ask a whole host of questions before you jump into a franchise system. The biggest question you should be asking is the amount of your overall investment. Is an initial investment the total amount required to get into the system or is it just a down payment or part of the franchisee fee? There are many other costs you’ll want to consider, including build out, legal fees, supplies and working capital. Know what all of these costs are – and what you can afford – before you move forward.
Create a Business Plan
Designing a business plan can serve many purposes. It can be a road map for business success or the crucial document you present to a lender to assist you in getting financing. Either way, a business plan will help you keep on track and set both business and personal goals.
These are just some of the many factors that should go into making the right franchise decision. Remember, buying a franchise is a big business investment, and should be approached like one. Don’t get caught up in the moment!
Is franchising right for you? Explore more franchising opportunities here.
Are you looking for a new start in a recession resistant industry?
Career planning has taken on a new urgency for much of the country amid the current recession. The U.S. – and much of the world – faces record-breaking stock market plunges, a devalued net worth, and high unemployment. As the financial crisis continues to take its toll, the natural tendency is to hold your ground and hope that better days are on the horizon. Unfortunately for many, that’s not a prescription for long-term success.
Times of great change and upheaval have historically resulted in some of our greatest innovative business opportunities. Where do you want to be 5 years from now?
Throughout history, you’ll see numerous examples of entrepreneurs who have succeeded in the face of a bad economy. Hewlett-Packard and Texas Instruments were launched during the Great Depression; DuPont was applying for patents to the secrets behind neoprene and nylon at the same time.
But how can you succeed in the face of this current recession? Not everyone is a chemical engineer with a secret to patent! The good news is that most economists and historians would agree that there are plenty of industries out there right now that have done historically done well in tough economic times. Specifically, it’s those businesses that will continue to serve our society’s most basic needs – like taxes, food, energy and health care.
For many new companies – especially today – just getting to the breakeven point is tough. That’s why industries like tax preparation have grown so much over the last ten years. Every American pays taxes. No matter what the economy’s doing, the need for tax preparation services will always be there. As our population continues to climb and our tax code becomes more complex with every new piece of legislation, there will continue to be a need for the tax preparation business model.
Additionally, business owners in the tax preparation industry benefit from the ability to work just 17 weeks a year during tax season. This seasonal flexibility and the potential return on your initial investment allows business owners to enjoy the rest of the year pursuing other interests. That means more time for family, friends, vacation and other business endeavors.
Of course, discovering the right recession resistant industry – like the tax preparation industry – is just the beginning of picking the right investment. You’ll also want to align yourself with a competent and trustworthy management team that can help you create a financially sound system with the ability to offer high quality products or services. Tax industry franchisees benefit from corporate training programs and support structures.
If you’re interested in owning your own tax preparation business, working an average of just 17 weeks a year, and want to join Entrepreneur magazine’s Top New Franchise, #1 Low Cost Franchise and one of the Top 10 Fastest Growing Franchises of 2009, click here.
As the first quarter comes to a close, the economy is obviously at the top of everyone’s minds. We’re faced with financial challenges that have not been seen in over a generation as the business landscape has changed dramatically amid the current recession.
But if you look around and talk to people in the know, they’ll tell you that positive signs are emerging. Three major banks at the center of the crisis, Bank of America, JP Morgan Chase and Citigroup, all reported last week that they were operating at a profit. General Motors, who many thought would not even make it this far, told US officials that they did not need $2 billion in aid originally requested to get them through March. While it’s certainly way too early to signal the end of hard times, if you’re thinking about starting new business, it might be a good idea to hurry up and do it before the recession ends!
That’s right: For some entrepreneurs, a recession is the perfect time to reevaluate goals and launch a new business. Owning your own business frees you from the burden of corporate control and allows you to call the shots. And while a recession is hard on everyone, franchising allows a new business owner to become his or her own boss while benefiting from a proven business model, infrastructure and support of an established brand.
What if I told you that there is a franchise out there right now that is actively seeking qualified candidates who are interested in only working just 17-weeks a year in an industry that will continue to grow despite any economic condition. Would you be interested? I thought you would. That’s why I want to introduce you to Instant Tax Service, the #3 fastest growing franchise, the #1 new franchise, and the #1 low cost franchise according to Entrepreneur magazine’s “2009 Franchise 500″ ranking.
Since 2000, Instant Tax Service has rapidly grown into a dynamic presence in the income tax service industry. Their nationwide locations are operated by hardworking, entrepreneurial income tax franchise owners just like you.
Instant Tax Service’s average third-year income tax franchisee is thirty-six years old and started franchising on an initial investment of less than $50,000. Most franchisees had no initial experience in income tax preparation or the income tax franchise business. Instant Tax Service provides all the tools, training, and resources you need to open your own business.
If you’re worried about not having any tax experience, it’s not a problem. Instant Tax Service’s comprehensive tax software is simple and easy to use and they provide all the income tax franchise training you will need to get started. Worried about your initial investment? Instant Tax Service’s franchise startup fees are reasonable, and they have funding options available to qualifying candidates.
As for marketing, Instant Tax does not expect you to spend all day on the sidewalk waving signs. You have a business to run and that is why they support all franchisees with a multi-million dollar national advertising campaign, comprehensive local area marketing resources and marketing plans that have been effectively proven to build an income tax franchising business.
Remember that if you have other business opportunities or need to keep your current job, becoming an Instant Tax Service franchisee will provide you with the flexibility to work just four months a year during the January-April tax season. If interested, check out Instant Tax Service’s online digital brochure for more information, or fill out a request for information here.
It might seem counterintuitive to start a new business when the economy is in the dumps. With consumer confidence plummeting, the unemployment rate rising, and the GDP falling at a rate reminiscent of the 1982 recession, there seems to be little hope of any good economic news on the horizon. But many historians and economists point out that such seemingly unfertile ground has often proven to be the right time to grow the seeds of entrepreneurship.
During a recession, smart CEOs and innovative entrepreneurs dig deep to find new market needs and fill these holes with creative opportunities. Some of our most storied brands today were born in recessions: tough times can make for great startups!
FedEx
Founded during the oil crisis of 1973, Federal Express founder Frederick W. Smith identified a pressing business need at the time: important documents had to reach their destinations within one or two days. On its first night in April, FedEx shipped 186 packages to 25 U.S. cities. While the oil embargo could have crushed the new company, Federal Express stayed alive and became profitable in July 1975, when oil prices finally leveled off.
Burger King
These flame broiled burgers are also another recession startup. The company began in 1954 when James McLamore and David Edgerton opened a Burger King in Miami. During another recession in 1957, the company introduced its signature sandwich, The Whopper. Today, Burger King operates more than 11,000 locations across the globe.
General Electric
Kicking off the Great Depression was the Panic of 1873, which began when investment firm Jay Cooke & Co. collapsed, causing the NYSE to shut down for days. The ensuing financial crisis lasted six years, but this didn’t stop inventor Thomas Edison from setting up his laboratory in Menlo Park, NJ where he produced the first light bulb in 1879. Although the economy remained poor until around 1896, Edison still forged ahead to form the Edison General Electric Company. In 1896, Edison’s GE landed a spot on the first-ever Dow Jones Industrial Average. Today, it is the only remaining company of the original twelve.
CNN
It might be a cable news giant now, but in recession-plagued 1980, it was a little known station called The Cable News Network, the brainchild of Ted Turner. Today, CNN is known for revolutionizing how people received the news. CNN premiered as the first 24-hour all-news channel.
Proctor & Gamble
Candle maker William Procter and soap maker James Gamble joined forces to start a small household-goods business in Cincinnati. Founded during the Panic of 1837, the brothers-in-law had at least six years of financial turmoil, bank failures and inflation ahead of them under the greatest economic decline since the birth of the country. P&G survived, scored lucrative contracts to supply necessities to the Union Army during the Civil War and with $83.5 billion in revenue in 2008, it has built a portfolio of some of the most recognizable brands in the U.S., including Tide, Pampers, Oral-B, Iams, Pantene, Duracell and Pringles.
The credit crunch is affecting everyone. What started out as a crushing blow to the mortgage industry and has now spread to consumer loans and small business financing. Banks have tightened their lending criteria and business owners have had to search for alternative means of financing.
Rising defaults have translated into tougher underwriting standards for home owners and small business owners. So how are you going to finance your small business? Well, there’s a shimmer of hope on the horizon… Washington continues to steer additional assistance to the small business community, and some low-cost franchise businesses are still offering financing to qualifying individuals.
As was reported in the Wall Street Journal, Treasury Secretary Timothy Geithner told members of Congress on Monday night that the Obama administration is working on plans to boost liquidity for small businesses as part of their far-reaching efforts to try and spur lending and fend off additional job losses across the country.
We’re all familiar with the Obama administration’s injection of $787 billion into the economy in the form of the recently passed fiscal stimulus plan. The president is also looking to inject capital into the housing market and continues to prop up major corporations like Citigroup and AIG, which have been deemed too large to fail.
The good news is that $730 million from the stimulus plan went to the Small Business Administration to reduce small-business fees and guarantee a greater share of some SBA loans. The Obama budget would authorize the SBA to support $28 billion in lending guarantees.
Additionally, Geithner also announced on Monday that the Obama administration will launch a plan next week that will provide financing, liquidity and guarantees to open up small-business lending. This is a crucial next step to get credit flowing again and spur our economy’s growth once more. The size of the program is unclear and we’ll have to pay close attention to the details as they are announced, but it is a step in the right direction for small business financing.
Face it, you’ve been dreaming about it for years. The thought of owning your own business has probably kept you up at night. Who wouldn’t want to work for themselves and call the shots, right? Owning your own business is a dream come true for many – and there are plenty of benefits that go along with being your own boss.
One of the best advantages – and the one we probably don’t even have to mention! – is that going into business for yourself means being your own boss. There’s nobody looking over your shoulder or telling you what to do. Gone are the traditional office politics and cubicle living, and in their place is the freedom to make the decisions you alone believe are best for the growth and success of your business.
Another great benefit to owning your own business is the number of options open to you as a potential business owner. In this rough economy, many potential business owners are looking to franchising as a great way to achieve business ownership while benefiting from the proven business model, infrastructure and support of an established brand.
We’ve all heard of restaurant franchising, but what kind of franchise is a good bet when the economy is down? People aren’t going out as much. What’s a great business people are going to turn to year after year?
Did you know that you could be a successful business owner working only 17 weeks season in the tax preparation franchise industry? That’s right, just 17 weeks!
This seasonal schedule and flexibility allow tax industry franchisees to enjoy the rest of the year pursuing other interests. Spend more time with your family, take that trip around the world you always wanted… or even build another business! Click here to learn more about becoming a tax industry franchisee.
Owning your own business also makes you a vital part of the community where you live, work and play. Did you know that, according to the U.S. Small Business Administration, small businesses create two of every three new jobs, produce 39% of the gross national product, and invent more than half the nation’s technological innovations? Imagine the possibilities and contributions you could make to your community!
Another advantage of business ownership is the ability to control your own destiny. Large corporations can be adverse to change, while owning your own business can give you ability to make rapid decisions and implement course corrections when the economy dictates. In the ocean of business, mega-corporations turn like tankers, while small businesses have the speed and agility of a speedboat – something very important in our current economic climate.
Let’s face it – as an employee you can dedicate years of your life to a company only to find yourself out of a job because of some dumb move made by the guys at the top. A recession, management changes, mergers, acquisitions, downsizing and outsourcing all have a tendency to force sudden and unexpected change. However, if you own your own business, you’ll be facing today’s competition and change on your own terms.
You’ll be your own boss. Isn’t that a business benefit worth looking into?
How’s business? It’s the question business owners are probably dreading the most this year. Ask it aloud and you’re sure to be answered with an “uhhhh,” an “egghh,” or even a rolling of the eyes or shaking of the head.
The fact is that the business landscape has changed dramatically because of the current economy. But if you talk to analysts and key decision-makers, a distinguishable and repeatable truth emerges: You can’t afford to do nothing. It’s time to be proactive. Now is the best time to embrace your entrepreneurial spirit and start your own business!
Believe it or not, there are certain business sectors that continue to grow and thrive despite the economy. These industries include: alternative energy, healthcare, tax preparation franchising and technology, among others.
Every entrepreneur will have questions about how to jump start their business – in this economy or any other. Below are some of our top tips for launching a new business in this rough economy.
1) Make a Business Plan – The key to your business plan will probably be your breakeven analysis, a profit and loss forecast, and your cash flow projections. Building an integrated and well thought out business plan also allows you to determine potential start-up costs and marketing budgets. Because if you can’t make the numbers work on paper, how do you think it’s going to turn out in real life?
2) Put Agreements in Writing – if you decide to join a franchising system (a good bet because of the national brand power and support resources available) or go out on your own, it’s always a good idea to get everything in writing – even if it is not legally required. Be sure to get things down like contracts for services, employment policies, and even purchase orders. It’s a good habit to get into giving and receiving receipts for everything, no matter how small or large the purchase.
3) Build a Competitive Edge - Building a competitive edge into the fabric of your business is vital to long term success. Know more than your competitors, protect your trade secrets, have a crisis plan in place, and always look out for new ways to drive customers to you.
4) Pay Your Bills Early and Taxes on Time – A good strategy is to always pay your bills up front or early. You gain trust and enhance your credit profile – all good things to have in case things do go poorly. Most importantly, pay your payroll taxes on time: the IRS can hold you personally liable for these taxes – and impose stiff penalties – if they’re not paid. If you have any tax questions, contact a local tax professional near you.
4) Understand How and If You Will Make a Profit - In just a few sentences, you should be able to write in your business plan how your business will make money and – ultimately – succeed. You’ll need to understand your costs, purchasing, inventory, rent, employee salaries, and a host of other costs to determine what you need to do every month to cover these expenses and make an adequate profit.
In his speech to the nation this week, President Obama said that the country will eventually push through this current recession and entrepreneurs would lead the way in turning things around.
“The answers to our problems don’t lie beyond our reach,” he said. “They exist in our laboratories and our universities, in our fields and our factories, in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth.”
And while small businesses and entrepreneurs will be an integral part of our economic rebound, the reality is that the recession is expected to be longer, deeper and deadlier for businesses than our nation has seen in decades.
So, what’s a small business owner to do?
It’s time to reassess your business and look at ways to implement cost-cutting strategies so you can weather this storm for the long haul. Here are 10 money saving tips for you to consider.
1) Protect your personal assets – When you go into business for yourself, you are usually personally liable for all judgments and debts that the business incurs. While you can protect yourself against lawsuits by buying business liability insurance, this won’t help you with business debts. If you anticipate running up big debts, consider forming a corporation or limited liability company (LLC).
2) Review and update your business insurance coverage – If you have sold a truck, car or other insured equipment, call your broker to remove it from your policy. Make sure you take advantage of good-driver, nonsmoking and any other special discounts you may qualify for.
3) Limit business travel - Don’t fly across the country to meet with just one person. Set up several meetings with current and prospective clients to justify the cost. Try videoconferencing instead of a face-to-face meeting.
4) Use U.S. Postal service – Use their Express and Priority mail service rather than private overnight delivery services. The Postal Service will pick up packages, just like the other guys. Pre-sort and barcode your mail to qualify for substantial discounts on postage. The Postal Service also has a suite of products and services aimed at small-business owners. Visit http://www.usps.com/smallbiz.
5) Pay attention to your taxes – Hire a professional. This should be a no-brainer, but with the economy right now, a lot of people are considering doing their own taxes this year. However, while personal taxes are often pretty simple, business taxes are not. Hiring a professional can save you money in the long run. To find a local tax preparer near you, click here.
6) Negotiate lower bank fees – In this competitive climate, no fees are set in stone. If you are a good customer, the time is now to talk to your branch manager.
7) Hire and keep good people – Your goal should be to hire and retain truly excellent employees -not just reasonably competent ones. A highly competent and truly enthusiastic employee is at least two and sometimes even three times as valuable as a person of average skills. It will help you keep a stable and productive workforce while reducing the burdens of turnover.
8) Solicit bids from new vendors and suppliers – Take stock of the materials you use to make or package your products. Compare prices and renegotiate with your current vendors to find the best deal.
9) Become energy efficient – Turn off lights, computers, and air conditioners when you leave the office. Conserving energy saves money and resources. Change your light bulbs to energy-efficient models.
10) Review cell phone and pager use - Take away phones and pagers from employees who rarely leave the office or travel on company business.
