Never focus on brand recognition as a primary factor of a franchising its your market-YOUR brand YOUR Positioning to create success!

Small Biz will grow because of freer lending, more money and NOT Social Media! - http://ping.fm/Ox6y6

The Killing of Small Business in American in 2010 - http://ping.fm/LHoPF

12 Quick & Interesting Facts about Entrepreneurs - You'll Love These! Take a look: http://ping.fm/S2Ysx

Mans expansion of God’s original teaching undoubtedly interfere with what God desires to accomplish w/His people in the present! - J Wilson

The years taught me most of the world's richest people began their journey to wealth with the habit of tithing-Robert Kioysaki

Trying to reconcile your failures with God's love and His leading in your life? Check out my latest blog - http://ping.fm/r7EDi

is heading out for a family & biz visit with his brother Al

Hello,

J. R. Sr. invited you to join his professional network on Facebook. Take a moment to create a professional profile, discover more professionals in your industry, and grow your network!

To get started, follow the link below:
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Thanks,
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Hello,

J. R. Sr. invited you to join his professional network on Facebook. Take a moment to create a professional profile, discover more professionals in your industry, and grow your network!

To get started, follow the link below:
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Thanks,
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Hello,

J. R. Sr. invited you to join his professional network on Facebook. Take a moment to create a professional profile, discover more professionals in your industry, and grow your network!

To get started, follow the link below:
http://ping.fm/S8Hd0

Thanks,
-The ProfessionalProfile Team

Align your faith and your tasks to your goals and watch God work in your life! - J Wilson

If our faith isn't the basis for our goals and the desires of our heart then we'll constantly struggle to believe we can reach them.

Congruity in life must begin by aligning our faith with our future. - J. Wilson

To find out more about Twitter, visit the link below:

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-The Twitter Team

About Twitter

Twitter is a unique approach to communication and networking based on the simple concept of status. What are you doing? What are your friends doing—right now? With Twitter, you may answer this question over SMS or the Web and the responses are shared between contacts.

This message was sent by a Twitter user who entered your email address. If you'd prefer not to receive emails when other people invite you to Twitter, click here:
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Thanks to my Aussie hosts for a wonderful time, amazing learning exp & exemplary hospitality at ActionCOACH Global Conference 2009 in Sydney, AU

Bless & thank you guys who sent me birthday wishes. It made being out of the country a lil less painful and much more like home...hugs n' Love

and now I have a cough...just in time to go home...ughhh

with the ActionCOACH team and psyched to learn more about Master Licensing model on my Aussie Version of my Birthday...

John wrote an "Out of My Heart" at http://ping.fm/l1S2B on Nick Vujicic-the Living Life Without Limits (Limbs) guy...check it out

Happy Birthday (the first time) to me!

ActionCOACH Global Conference Award Banquet just ended...a good time was had by all...

You need to see this man: http://ping.fm/4Isbc
http://ping.fm/sb9J9
http://ping.fm/FaQ8h

at a global conference - Sydney, AU - We'll be teaching & learning best practices in operating a coaching business, firm & as a Master Lic

I'm moving my franchise blog! Find my latest updates at http://ping.fm/qd8nD for past posts: http://ping.fm/zqMBV

Went and saw "My Life in Ruins" - Not bad - Richard Dreyfus saved the day...

wjmaajdpmg

Make a difference!-draw on your inner entrepreneur-watch the clip! http://ping.fm/083hj

What Will You Feed - New Business Ownership

I recently read that there are approximately 13.7 million people unemployed as of April 2009. 3.7 million of those have been jobless for half a year or better (27 weeks or more).

It is no wonder why so many have begun to turn to franchising or small business ownership as an alternative. We all have grown weary in the workplace of the lack of security and even-handedness in the career market.

Franchising certainly can be a solution for joblessness. The unemployed today are some of the most highly skilled executives in the history of any civilization. The challenge is they also have developed lifestyles to match with a need for a high income.

My grandmother used to say to me, "John, you cannot talk your way out of a situation you have acted your way into." Our current executives will forever find it hard to replicate the life, lifestyle or income they had just left behind. They cannot do some simple thing and *poof* be made financially whole. I realize that it is possible but to a more extreme example, so is winning the lottery. Typically you are NOT made financially whole with the acceptance of your next "job." Also, you are not at all more secure than you were any more than the ostrich is more safe who just stuck his head into the warm sand. THAT is the greatest challenge to business ownership for the displaced executive. Will I or will my wife and I decide to make the investment to create the security we have just lost; the security which after all was said and done was not at all that secure?

Most will ultimately say no to business ownership. And, to their discredit, they will also eat through their life savings trying to create the quick fix to find the job that will provide the dubious next job.

Other however will have an epiphany. They realize, given the current economy, and job trends, it may take a very long time to find a new position in corporate America either that provides them with the same earnings level or any security at all. The trend is likely to replicate itself. In a few years they will once again be displaced. This time remember they do not have tenure. They have not built up a resume of accomplishments.

Joblessness and the uncertainty that comes with working for someone else, have made owning your own business, becoming an entrepreneur, a reasonable alternative to the job market simply because it is factually more secure.

But the displaced are now more insecure and vulnerable than ever. Their spouses in particular question if what they do know translates into earnings and security. Then, that becomes the question...take the time to answer it. Don't gloss over it.

What makes a successful entrepreneur? What makes a successful franchise owner? Is it past job experiences, education, certifications and/or some developed skill sets? Is it a particular personality trait? What type of person has a greater chance of success in owning a franchise business?

Various studies have created dissimilar conclusions. While there are differing opinions on this, experts in the industrial behavioral fields believe those interested in buying a franchise should stay close to their area of expertise. This should be defined as the areas where the individual had the bulk of their business successes.

Period!

The only differentiators with the pros in this field becomes while job experience is important when buying a franchise, some are committed to your need to find a franchise business that nourishes the most important aspects of your personality. The franchise should allow you to use your natural and personal strengths. This will increase your chances of success.

I am convinced with the proliferation of fields now covered by franchising, it is possible to do both; have the franchise where you have already racked up wins and within an area or field where you could relate your passions and personal preferences.

A Word of Caution

Franchising does not necessarily allow for true entrepreneurship. I know, many people argue the merits of one definition of entrepreneur over another. However, entrepreneurs tend to be non-conformists. They start life by simply thinking outside of the box. They tend to want to do things their own way. Franchising asks that you play by the rules. You follow the franchise model to achieve franchise success. After all, it was "the model" that created the successful business standard that attracted you in the first place.

Entrepreneurs sometimes want to pave their own path. Go a different direction that no one else has gone and do it better. Franchising is about the tried and true. Top franchises have a proven method for success and they stick to it. There will be recorded failures in their system. Any franchise with any history has failures. Typically those failures are not systems issues and study after study has shown this.

You reduce failure rate by drilling down on the most challenging issues within the business area. The franchiser made all the mistakes of entrepreneurship and learned from them. This proven method of doing business a certain way is what you pay for when you buy a franchise.You can call yourself a "frantrepreneur" but you need to recognize the difference...in business for yourself and not by yourself gives you freedom with boundaries.

As an ex-franchisee and a life-long entrepreneur I can tell you the two have common ground. They both are motivated by long term goals. You have got to see beyond today, next month, 6 months and a year. Vision is what builds your business, your culture and your character as a franchisee and an entprereneur.

They both realize this is NOT about replacing a paycheck. It is about the building of business equity. It isn't about making short term monetary returns. It's about using your resources, personal, learned and financial to build a business you can be proud of for many years whose end result is a significant asset of value at the end.

Finally, franchise owners and entrepreneurs both have realized they have to deal with ambiguity as leaders in their business. Someone else is not going to deal with the myriad of responses to threats and conditions in the marketplace; you are!

You must also understand that "risk" tolerance is only one aspect of ambiguity. The unknown or solutions to questions which are not black and white by their nature always create the opportunity to fail. That detail however is nothing like the risk of getting fired one more time for things outside of your control.

You know what I am talking about if you are reading this as a displaced professional.

Our day and age has shown nothing if it hasn't proven that no one can predict the future. The confidence is that a franchise gives you back up, expertise (both the franchise company and other franchisees - you are NOT alone). This produces high levels of confidence that you can apply the business model and your personal resources and create a successful franchise business.

Now, stop pretending to look for a business and get to it!

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates. If you are looking for support and a proven consultant with expertise he can be reached at docfranchise@gmail.com.

Your Franchise Choice and Risk

If you were to ask a franchise candidate, "Why do you want to start a business?" You are first going to hear such things as...

I want more control
More flexibility
More time with the family,
Better work/life balance
...and I want to keep more of what I work so hard to generate

Or, put another way, many people enter franchising because they believe the effort they expend to create riches for others would be best spent in generating wealth for themselves...or, at least MORE wealth than they are currently accumulating from their efforts in their chosen and current career.

But I do want to point out that in my experience in speaking with thousands of potential franchisee's over the last twenty-six years it is rare that wealth is among the top three reasons. Why? Because it is the things about life they value more than the aggregation of monetary gain that has fascinated them and has them enthralled. Typically moolah isn't the reason people invest in franchises.

My wife hates tools and especially electric tools. My wife however has the fanciest glue gun you could imagine. Why? Because she is a crafts person and loves creating things. If she could do it without the glue gun she would. She isn't in love with it. She is in love with the results she gets from it.

Money is not the end result. How do we know this? In previous economic times we watched franchisees walk away from high paying jobs everyday and walk into business which may throw off negative cash flow for six months, a year, two years and yes, even three years! To those who will NEVER go into business; who will window shop until the second coming, yes, they do in fact pay to go to work. They do it because it provides for them something else. They do it because the work provides different incentives.

One set of skeptics will tell you they were foolish and just didn't know better. And that is true of a very few. Guys, come on now, geez...information dissemination about experiences and expectations in a franchise business are a few mouse clicks and a few phone calls away. No, that's not it for the masses. Others, will say they were deluded into thinking somehow they would succeed.

It's called hope. It's called a positive attitude. It's called believing if you do the right things you will get the right results. But, it is also called, "It was worth it to me and I'd do it again if given half the chance!"

What appears to be the biggest key is the lifestyle they learn many entrepreneurs do in fact live. This has caused some to take a lateral move in terms of dollars and sense and for a few a pay cut. They all hope to be doing better. Yes, of course, they want to earn more. However, the almighty dollar isn't the motivation. A different Lifestyle drives the decision.

When the experts on the various forums trash franchising based on their financial genius and on purely economic investment criteria, they exhibit an incredible level of ignorance regarding the human condition. They want to objectivize franchising as a comparative economic proposition. It isn't. It never can be nor should any human endeavor. Franchisees understand this. The geniuses of investment strategy appear not to.

Whatever your profession or job or enterprise you enjoin in order to keep body and soul, home and hearth together needs to generate a living for you. But money won't hold your attention and keep you motivated at any level without a significant degree of personal satisfaction, passion, personal success (however you individually evaluate that) and the opportunity to use your time and talents in a way that suits your vision of a life well lived!

A well-known franchise expert, Joe Matthews says it likes this, "Franchisors need to be skilled at identifying the "Total Quality Life" franchisees were designing when they purchased their franchise in the first place, and helping franchisees structure their businesses to deliver this life."

Amen Joe - that work needs to be front-loaded into the development of the concept and needs to be checked off along with the rest of the elements that the franchise company uses to define "success" in the process of supporting the franchisee's endeavors.

For me, living the way I desire to live; the way I imagine the use of my time and the flexibility I envision would be "living rich" (though truthfully it wouldn't change my house, my car, my toys or other accouterments nary one iota!) It is true that many (perhaps most) franchise opportunities will not create long term fabulous wealth. Though I also guarantee that is a function of imagination, determination and resolve more-so than a financial expert cares to account for when providing their analysis. However, that usually isn't the franchise buyers' goal.

"I wish for you a good life - more than this what could I wish? I pray you peace and joy and love and laughter served by the dish - and may this life well-lived reflect back as an image in the mirror to the one who lived it as my friend I will cheer both him and her"

You can make significant money in franchising or many other forms of endeavor. It's just that if this is your goal you miss the point of doing it at all - IMHO

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641

Sen. Specter changes position on the Employee Free Choice Bill: http://ping.fm/IHIh9

Lending to a franchise pays off 34:1: http://ping.fm/mU8eP

What is your compelling sales story to potential franchisees - How about controlled costs - http://ping.fm/ClB6t

20 Questions to Ask Before You Franchise Your Business

Sometime back I created this list of questions an entrepreneur should ask before deciding to franchise their business and recently found someone had took it word for word from my old blog and reposted it on another franchise "experts" blog site.

Basically, I had created a series of questions on what to ask yourself before you consider franchising your business.

Here they are:

1. How long have you been in business? (You should have a track record in your industry.)

2. Is the business profitable? (Remember that you want others to pay you to learn how you manage and operate your business.)

3. Are you selling a consumer service, a business service, a food, a product, or other (can you paint a simple word descriptor of what you do)?

4. Is your business product, service "pan-geographical" Is there a universal need or semi-universal need beyond your area for it?

5. What is the demand for the product or service? (Can you easily market what you can simply describe?)

6. Is it a business meant for, "As such a time as this"? Ahead of your time is not in step with your time. If it is too late or on the cusp of technology extinction, you lose the “first to market” advantage.

7. What is unique about what you do, create, who you are or how others perceive your product/service?

8. Can others be trained to operate a similar business?

9. Have you registered your name with your state? With the US Patent Office? (This can be done while you develop your franchise program.)

10. Do you have a URL, a web site, a blog? (Also can be done while you develop your franchise program.)

11. Is the market for your product or service growing? (See #5)

12. What investment amount will be required for a franchisee to begin business? Is financing available?

13. Do you have an amount budgeted for your franchise development costs? (Do you have finance resources in the wings for your growth and development?)

14. What validation have you generated for your business model? (Industry experts, customers, professional entrepreneurs?)

15. Who are your competitors? (Is this a product that has both direct and hidden or indirect competition?)

16. Who else is franchising in your industry? (This can sometimes help establish your market position NOT whether you should do it.)

17. What are the start up costs including the franchise fee? (How have these been determined and note: This can be adjusted later.)

18.What is the scope of your development in real numbers in 1 year - 3 years - 5 years - 10 years and why? (Think through this - it will establish the financial need)

19. Are their international components to consider in future development and growth?(You don't have to know this now, but it is another matter to consider.)

20. There are at least 3 methods of franchise development - have you considered which best suits your business model and your plans for grow...

Having asked all of those things if you are looking for an expert who has been a franchisee, been an executive with a number of complex franchisee models, consulted with hundreds of franchises and can do everything from hone the concept, to sell your new franchise concept to its first franchisees then give me a call.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or my office 480.838.1641

Sayin' What Needs to Be Said So God Will Pat Your Head

...until we all attain to the unity of the faith and of the knowledge of the Son of God, to mature manhood, to the measure of the stature of the fullness of Christ, so that we may no longer be children, tossed to and fro by the waves and carried about by every wind of doctrine, by human cunning, by craftiness in deceitful schemes. Rather, speaking the truth in love, we are to grow up in every way into him who is the head, into Christ, from whom the whole body, joined and held together by every joint with which it is equipped, when each part is working properly, makes the body grow so that it builds itself up in love - Ephesians 4:13-16

In a day when the pressures of daily living create in us a sense of urgency just to say what needs to be said and move on, we are each challenged to dig deeper into what we say, how we say it, and why we say it.

We have been reminded that our communications are directly related to our relationship with God. Do you believe this? Do you act like you believe this?

When we communicate scathing, thoughtless, and hurtful ideas and feelings without any regard to the big picture, the implications of the words, or our responsibility in the matter, we are actually conveying the level of our spiritual maturity!

A spiritually mature person is able to process, reinterpret, and package their ideas, emotions, and feelings, BEFORE expressing the message the Holy Spirit wishes them to convey. This is because a spiritually mature person does not disconnect their communications with others from their communication with God. The circle of life is truly an eternal matter. We aren't supposed to have one level of communication for the spiritual and another for the temporal. We don't treat our conversation at church differently than work or school or the street or traffic!

Isn’t it unfortunate how we think we’re spiritually mature because we read our Bibles and go to church every Sunday? Our honesty demands we discover that our everyday lives are raggedy and we’re not as spiritually mature as we thought. And the first place it squirts out is in our verbal communication.

I challenge you to process, reinterpret, and package your ideas, emotions, and feelings BEFORE expressing them. I challenge you to grow up a little bit more today in a way that our Heavenly Father interprets growth and maturity...by the grace of the words we speak; the life they bring, the message of hope and power they express.

I remain...

InHISgrip,
~J~

Men are never duly touched with their own insignificance until they contrast themselves with the majesty of God - R. C. Sproul

A Green Job Strategy for the USA may not be a good move after all...check this out: http://ping.fm/ibuIo

Red Hat Society: Profiles in Branding Article...good read: http://ping.fm/OWRou

Gasp! Even eBay can have brand issue problems? can...http://ping.fm/loJEU

Paul Castain's article on where to find money is a great read: http://ping.fm/Po2uQ

Questions I was asked on a recent biz trip whether I am right for franchise ownership : http://ping.fm/vDqlm

Questions to Ask Before Considering Franchise Ownership

Recently I took a short business trip which required some air travel. My traveling companion on the way back, not getting my subtle hint of isolation that my Ipod Touch and headphones projected asked me about my trip and then my profession.

What followed was a series of questions that started out in very familiar terms: "You know, I have always wondered about getting into business for myself but I'm not sure I'm qualified or that it's right for me. " What followed was most of the following questions that are commonplace and typical. So, in only a mild order of importance or, more to the point the way they seem to flow, are my twelve or so typical questions people have burning in their bosoms about franchise business ownership.

You will notice that some do not have definitive answers. The reason is the kinds of business, the market segment and the format that franchiser has selected affect many of these conditions. How the franchise companies answers those ubiquitous scenarios however may affect what interests you and it behooves you therefore to get them answered before moving deeply into a full-blown investigation.

Check them out...

What are my capital requirements?

This number is different for every franchise. There are three numbers the franchiser is interested in that relate to you:

A. What is your net worth - a franchise company has to have this information to determine if you can qualify for financing and whether you will be able to acquire a lease on space (perhaps) because every landlord requires you to have a certain net worth.

B. What do you have available in terms of liquid capital? There is a certain amount of money you need for the franchise fee, opening marketing and working capital. It is different for every franchise. There is a minimum number and a typical number that the franchiser will require. You would be wise to add an additional 10-20% on to that number.

C. What was your last full years earnings? This is important because, typically, regardless of what you tell the franchiser, they want to know if their concept can provide you at least the earnings level you are accustomed to earning. If it doesn't then why bother?

Is it necessary to have a good credit rating?

Probably yes. Even though you may be able to convince the franchisor that you have sufficient net worth and working capital, (plus experience, passion and knowledge) to start the business, there will be other related business components that will require a good credit standing. Think about trying to open a bank account, trying to borrow money, signing a property lease, etc.

How much experience in business ownership should I have?

A franchise company that tells you it is not necessary is only giving you a part of the story. It is most likely true that they have successful franchisee's in their system with little or no direct experience. Should you have experience in components of the business that drive its success (marketing, project management, sales, etc.) means you give yourself an opportunity to jump start the business and reduce your capital needs. Some franchises, particularly those with a significant history and hundreds or thousands of units may have created more sophistication and therefore greater skill set requirements.

The business I am interested in is not one where I have direct experience. Is that necessarily a bad thing?

Once again, franchising covers nearly 800 market segments in America. Some of those not only require experience but certifications, special licensing and education. These types are few however and most do not. It is a huge selling point in franchising that you can come from some place completely different and through preparation, training and support be part of a wildly successful franchise format system.

I see there are Franchise Consultants and Brokers who advertise their services. Do I need to use them?

Consultants and Brokers play a very unique and powerful role in the franchise industry. The right consultant that has a stellar reputation brings to the franchise companies the "right" candidate (prospect). The wrong one simply follows the prospects lead and recommends what they seem to have an interest in. Both to be honest still provide value. The exceptional one is a godsend.

The professional broker/consultant can screens candidates for the franchise companies and likewise for their individual candidates; matches up the best to fit the business model. For that they are handsomely compensated by the franchise company. They also coach prospects on the proper do’s and don’ts during the application and approval process and lend a high level of insight into each concept and that concepts process.

Remember, franchise brokers may only represent a select few franchisors and if you are using a service such as Frannet, FranChoice, TES, BAI or Sunbelt, these companies have pre-screened (think of Consumer Reports) the franchises for you. Online web portals, such as Bison and Franchise Gator, can provide an easy way to search for existing franchise opportunities. They will likely have a very large number of listings relative to what a broker will represent. So, do ya feel lucky punk? Well? Do ya?

Are there quality home-based franchises?

Yes. They do represent a smaller number of franchises and because of their low entry level and quick profit development are most likely to be sold out most quickly to the general consumer market.

I am eating through my savings while I am without a job. How soon can I get open if I started today?

Expect the entire process to take anywhere from as little as 45 to 180 days.

Is there more than one form of franchise model?

Yes, typically there are four forms that are recognized:

A) Single Unit franchise offerings

B) Multi-Unit franchise offerings (2-4 usually in contiguous markets)

C) Area Development (5-10 units in a DMA and contiguous market typically)

D) Master Licensing or Regional Development (You own an entire DMA (Population area of 500,000 or more, County, State, Multi-State area) and own the rights to open many units. In most cases you can sell franchises and share in certain franchiser revenue streams. Usually this is a sophisticated partner for the franchise company.

What form of training does the franchise company provide and how long does it take to complete?

It is important to franchise companies to put prepared franchisees into newly opened units. Nothing reduces the value of a brand than a poorly run unit, regardless of how remote or small or insignificant they might seem in the grand scheme of things. The truth is, most do an excellent job of providing proper training. If franchisees prosper, then the franchiser will prosper through the collection of fees. The franchise company have their reputation and name on the line.

What is a “Discovery Day?” Is it also a decision time for the prospect?

A Discovery Day is a day devoted to the franchise candidate (prospect) and, though some companies hold them in the field, it is normally held at the franchisor’s city, their HQ and in and around their area. You will spend time with key executives, operations and support people and trainers. The day is given to learning about systems and how the franchisor provides assistance, training, ongoing support and future services in the cause of your success.

Will I have a protected territory?

This depends on the product, service, the development of that industry segment and franchise company. Protected territory or "designated" territory is one of those things you need to realize is a catch 22 and does not always serve either franchise company or individual but needs to be evaluated based on the industry, and against offerings from competitors.

Will I have to pay royalties? Could there be other fees?

Every franchise collects some ongoing payment for all they have done and will do in the future. Some franchise companies standardize their fees; creating a minimum amount on a regular basis (bi-weekly, monthly, quarterly) and then a capped top-end. Others have a simple percentage of total revenues (Usually less taxes) earned. You don't, as a candidate focus on royalties as good or bad. You develop your fact sheet and determine if earnings after all expenses is viable for the concept or not. Absolutely expect franchise to collect a form of ongoing fees. This is the primary reason they developed their opportunity in the first place.

Note that many low cost opportunities are not really franchises, but they are considered Business Opportunities (BizOps). BizOps are usually less regulated and can have smaller entry fees (this does not mean less expensive however) There are no ongoing royalty fees with a BizOp although licensing may be exclusive to product lines, equipment and services. Many are home based. However, be careful when choosing a BizOp. Make sure that the opportunity is tried and proven.

Those wondering where to find the world's most talented photographer: http://ping.fm/9QL0V

Franchise Sales People Stop Being The Problem

A very well meaning Director of Franchise Sales and a counterpart on the Internet attempting to draw advertising and leads for them just wrote about their "risk resistant" business.

Rubbish (And, if you want a great recession resistant company get back to me...it has something to do with Rubbish!)

I think we are all using the same vocabulary (we all use the word "risk") but different dictionaries. (I love the concept talked about, Spring Green, for the right market and the right candidate...but not just any candidate with the hope of "risk-resistantance".)

Look, if you are employed in America today you are at risk. Period. The risk is greater in your current job situation than it is in business ownership; generally speaking.

There are factors that temper that statement however. For instance, I am a firm believer that there are business types for personality types. Further, I also am a firm believer that certain people simply need certain aptitudes and have certain personal drivers that would ignite their desire to succeed. They fall flat in one type of business and they are amazing in others. Other factors such as how much investment am I willing to risk and will my wife let me also come into play. (Or, if she will let does she really understand she SHOULD let me?)

People continually define risk when they mean ambiguity. A job provides a false sense of security because we still hold onto the notion that if we know a thing well enough it means we can maintain what we are comfortable doing that relates to the thing...as in, "I know this job inside and out and ergo I will continue to be compensated to do it."

Everything in our society screams otherwise but some misplaced sense of control of ones career appears to be written into our DNA. It's a bad script.

It has been demonstrated, more so over the last decade, that your competency may be the least significant reason you have security in your employment. Their are other forces at work and you have no control over them within your organization. The current state of the economy may be to blame or they may have been their for years and you just were not aware.

You stay employed, your increased risk is a virtual certainty.

"Frantrepreneurs" on the other hand live with a very keen sense of the fundamental risks they will face. They understand them and they realize they have greater control relating to them. They just have more ambiguity in relation to how they operate their enterprise and how they decide to handle their challenges. They know the risks (market conditions - financial conditions - human resource scenarios) but must enforce a disciplined code of creative action and a greater sense of intellectual community in order to respond to their more finite inventory of risks.

Sorry for the long diatribe. I think it's time that professionals in our arena recognize the real battles we are fighting and that potential franchise prospects and candidates realize their next job is a much more fearful place than owning a franchise.

The saddest part of this stage however is that so very few should ever move from employee to business owner...but that is another topic.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates. If you are looking for support and a proven consultant with expertise he can be reached at docfranchise@gmail.com.

Risk - Are you Sure You Define It Rightly?

As a franchise consultant one of the questions that comes my way often is how much of franchise success is a strong entrepreneurial bent, how much of it is dogged persistence and how much of it is timing; the right concept at the right time?

Thinking of the concept of "entrepreneur" in such terms circles the issue but it doesn't answer the question people want to know. How can I succeed? (Do I need to be an entrepreneur to succeed?) Or, perhaps, do I choose an entrepreneurial franchise company to improve my chances of success?

The impetus of the questions is truly nothing more than, "How can I reduce my risk?" Somehow we have gone through a transition in our culture. Entrepreneurs, people like Jobs, Gates, Wozniak, Kroc, Fred DeLuca and Dave Thomas has changed our thinking. Today we have embraced entrepreneurs as those who have pushed through the bleeding edge of product development, service delivery and the technological impossibilities and created something valuable, integrous and lasting. They created things that we use today and many that have changed our world. Whereas, at one point, as late as the eighties, entrepreneurs were wild eyed dreamers willing to waste time, manpower, creativity and as much of the seed capital they could conjure on something as likely as do-do birds for specialty delivery services!

But I digress.

If you are looking to get into a business you are believing you are asking questions engineered to alleviate risk. But you are mis-defining risk. There is another word you are defining and that is ambiguity. It's a common mistake. The truth is that it is much more likely that your profession, your career, your employment position has a great deal more risk than the franchise businesses you have explored.

What it lacks is ambiguity. You know in your job with a high level of certainty (perhaps less today than say five years ago) what it is you are to do, where you do it at and that they appear to desire you continue doing it. You normally have no control of that. You don't know the risks because you are not in on them. You nominally have control over your ongoing employment.

I am certain, if you are reading this and considering small business ownership, a franchise, you believe risk abatement is a function of understanding the quality of the company. You don't have a standard by which to judge that and understanding the entrepreneurial quality of the business proposition appears to be a method to do just that.

Entrepreneur's experience greater ambiguity, primarily because they prefer to increase their chances by keeping their options open. Additionally, whether you are the founder of the franchise or a franchisee and new business owner your risk is redeuced because you understand it. They do not deny that risk exists despite that it is less than you, the reader's risk as an employee of anyone. They plan for it and use the fear and their creativity it creates as fuel.

Make no mistake dear reader. You have never decided against franchise ownership because it was too risky. Don't kid yourself. Whatever you do don't tell a franchise professional, "My wife and I have decided to pass on your opportunity. We just feel the risk is too high." Noooo...you and your wife have agreed to return to a situation with far greater risk, just less uncertainty of the thing that matters least and that is what your activity might be should your employer continue to require or even care to provide themselves, at their discretion, with your services.

What do you need to do to mitigate risk? Do not go back to the workforce.

What do you do to select a right franchise business? You start by taking a personal assessment. If you have high leadership and socialization skills you may have the stuff it takes to be a business owner. Beyond that you need to determine what are your motivators.

1. Are you primarily going into business to satisfy some personal need to take your professional experience to a higher leadership level?

2. Is this primarily about a larger financial opportunity?

3. Are you desiring changes in your lifestyle?

4. Do you feel you have been misplaced in your career?

Let me share with you that this blog is more about what you need to understand is not accurate. The more definitive response to how you choose rightly is for another time and writing.

Tremendous Interview with a fav entrep researcher...wanting to understand creative genius - world class companies? Check out: http://ping.fm/96jid

If you're considering buying a franchise this is a good article. It all but it will put you in the right frame of mind: http://ping.fm/6EDcf

Thinking about buying a franchise? In talking to franchisees remember to ask: http://ping.fm/DY06Q

Creating Customer Who Love You

Often new business owners get so stuck on the elements that get the doors open and the GO (Grand Opening) marketing off the ground they forget the most important thing...

well...

Let me put it differently...they don't forget the customer they just forget how to set the table to create a relationship with them. The simplest way to create customers for awhile (we will get to customers for life later) is to make sure you appear to love what they love and care for what they care for...both within the doors of your business and outside of those doors.

To that end I would suggest four things to do in your strategic investment, your business, regardless of whether you are a franchise or other small business entity. If you are a franchise however you will really win because franchises are notorious for believing they are immune from these things.

Here they are:

So here are 4 things that entrepreneurs need to do more of right now!

[a] Give - as in determine how you can give in the area you distribute your goods and services. Often it means something as simple as providing knowledge and at least some of your time. This giving should start with your first line of customer your employees, (who may be worried about the company, their own jobs). They may be unclear how best to contribute.

Share your training with peers in your trade organizations, with customers and prospects - use blogs, newsletters or local opportunities to speak. You will realize that you are valued just for these actions. Giving is not only psychically fulfilling but is an investment in your own future that makes just plain good business. And on any given day, giving need not take more time than a longish lunch break!

[b] Reach out - This goes hand-in-hand with giving. Determine how you will get out in front of your prospects and customers on at least an ever other day basis. This means you—not just your marketing or sales person or team. Your clients and customers value the relationship if for nothing more than to say they know you personally. The silver lining in a downturn is that customers have time to talk. So reach out. You can start by calling on all those folks you haven't connected with in the last year. And remember you are not selling. You are connecting.

[c] Listen - having reached out, it is important to listen. You would be surprised at the insights that arise when we truly listen to our customers. Often customer themselves gain clarity when they talk and so many of our own assumptions get uncovered and prove to be baseless. I cannot tell you the number of customers whose business cards I printed never made the connection we also printed brochures, forms and stationary until we spoke, and I listened and then shared we could handle those tasks also. Having said that remember this also, listening requires both preparation and the ability to ask clarifying questions. As you learn to do both better you will retain higher and higher percentages of your customers.

[d] Simplify - this is a great time to simplify everything about your business and the positions within them. Simplify your products, your collateral, your sales pitch, your internal systems, your website - all of those things that have your signature on them. Make it easier for people to find you, to understand what it is you do, why you do it better and why buying from you and using your products is going to simplify your customers' own life and work. Simple is not easy - simple is hard! So the sooner you start the better.

In a downturn it's easy to batten down the hatches and focus on the numbers - which is important, but we are never going to dig ourselves out of a hole, let alone grow or thrive with just a defensive game. So it is important to stay the course with Giving, Reaching out, Listening & Simplifying (GRLS). While this sounds like a lot of work, it is the stuff that those who survive and thrive do to differentiate themselves from the rest! GRLS require passion, planning and perseverance but also create profits - but after all aren't these the very reasons you got into business in the first place?

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates. If you are looking for support and a proven consultant with expertise he can be reached at docfranchise@gmail.com.

13 Reasons Franchisees Are In Business and More...

The IFA (International Franchise Association) did a study back in 2006 asking several hundred first-time franchisee's what were the reasons they decided to get into franchising as opposed to other business models. Here is their list in order of priority:

* Reduced risk of failure
* Turnkey operation
* Proven products/service offering and systems
* Standardized financial and accounting systems
* Collective buying power
* Supervision and consulting within the business system
* National and local advertising programs promotes branding
* Uniform packaging, branding and recognition
* Ongoing research and development
* Financial assistance
* Site selection guidance
* Operations systems and manuals previously developed
* Sales and marketing assistance

When pressed to discuss if these were the reasons they continued in operations 80% said no. Virtually everyone said they realized other benefits and had re-prioritized the initial value they put on these 13 items. Almost everyone realized after the fact the value of being involved in a system that united not just brands across geography but also the value of having a "comrades in arms" mentality of the franchisee system. Many valued this hidden factor as the most significant value of their franchise system.

The second significant factor takes into account several of the aforementioned specific values; a franchise expert organization that provided a look both at the industry on a perpetual basis and had a more universal view of trends in the market place they would otherwise miss simply because they are so locally involved in day-to-day operations.

There should never be a singular factor that creates the proverbial straw and tilts one over into franchise business ownership. But finding a franchise that meets your needs and fulfills your business ownership priorities would include many of the listed items. Just remember to get to know some of the franchisees to get a sense of the culture. It can be the most valuable reason of all.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com.

10 Qualities of High Performance Small Biz Owners

1. Internally - Personally and Self-Motivated
Everyone knows that you need motivation and drive to be successful in life. However, when you are running a small business, you will need to be able to not only motivate yourself, but motivate your employees as well. The best small business people realize you are often your highest and best resource. They've embraced and deal with it daily and keep themselves and their team thinking "We can!"

2. Goal Oriented
Successful business owners are always goal oriented - they know what they want to achieve and they have a sense of how long it will take them to get there. Moreover, they have learned that visionaries think critically and create the path...the baby steps and short-term goals to get to the biggies.

3. Personal Management & Prioritization Skills
When you own a small business, time equals money. If you want your business to be a success you will need to understand the concept of "first things first" and,
What do I need to do next in order to ensure the ongoing success of my enterprise?" Having said that, do not take take personal management to mean time management nor either to mean they control time or have priorities you and I would embrace. To the contrary many great small biz whizzes simply have one set of priorities that are wholly self-serving.

4. Fiscal Capability and Allocation Skills
In addition to managing their personal and business priorities, as a small business owner, you also need to be able to properly manage your monetary resources. The best have a timing sense about spending and holding. Oh by the way, if your passion is operations then you better get a great numbers person you can dance with...who will speak so you will be motivated when change is needed!

5. They Take Personal, Physical Care of Themselves
Too many small business owners often forget to take care of their health when things get busy. Poor nutrition can lead to a lack of energy and being susceptible to colds and the flu and being put on the sidelines in an untimely manner.

6. Nimble for The Times They are ALWAYS A'Changin'
Having the ability to adapt to changing market conditions is critical and a habit shared by the small biz whiz community. Products and services are quickly part of the fading landscape of the desires of a fickle market. You must be prepped to read the market and understand where it is planning to go.

7. Step Outside of Their Comfort Zone REGULARLY
Successful business owners need to be confident in taking risks. You have to take risks to reap rewards. This means controlled failure and the best of the best get that.

8. Communication Skills
Being able to communicate well with others is a must. In addition to communicating with your staff and customers, you also need to be able to network with other business owners.

9. An Unusually Wide Range of Interests
In addition to being able to communicate with others, you also need to be able to listen. But beyond that the very best are able to take the analogy of success and failure from a wide range of subject matter and apply it to their situation. The ability to associate truth, market conditions, opportunities and see beyond the narrow scope of ones own workspace is rare and unique and leads to an endless world of business possibilities. No one is ever-right 100% of the time, and there are times that even the most successful business owner will need to heed the advice of others and see things from a completely different perspective.

10. Work Right Not Just More!
If one of the reasons you are going into business is to work less - think again. Similarly, if you think you have to work longer, harder and more often then you are missing the point. The point is to focus attention, time and energy where you maximize your opportunity and create the largest possible audience for your goods and services. Make no mistake the best small business owners are committed to their business and frequently work 60 or even 80-hour weeks. But the key isn't the hours. The key is a concerted effort to do what the business needs you to do and train others to do the rest with the same fervor, intensity and pride you take in your work.

If you are challenged in your current small business give me a call and we can discuss your situation. I would be honored to be of service.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at dr_franchise@consultant.com

Um, Really? These Are the Investigation Do's and Don'ts?

I just got through reading a ditty from a self-proclaimed franchise expert on the non-official rules and regs you should use to determine what is the right franchise business for you.

Here is the article in its entirety. I did add a few comments in BOLD in the Do NOT section:

Buying a franchise is not a simple process; but, it can be made easier if you follow some basic rules. Here are some things to keep in mind when investigating a franchise opportunity:

DO:
1. Take your time and educate yourself; it can take several months to find the right business. Commit to the process.

2. Know your financial situation (Assets, Liabilities, Net Worth)

3. Consult with a lawyer, accountant and/or franchise consultant

4. Carefully read and understand the FDD and Franchise Agreement

5. Create a Cash Flow statement and a business plan

6. Talk to existing franchisees

7. Compare franchises within the same industry segment

8. Take time to understand all the franchise financing options

9. Negotiate with the franchisor (fees, territory, marketing support, etc.)

10. Go to the Discovery Day

11. Be prepared to make a decision and take charge of you future

Do NOT:
1. Feel like you have to make a rush decision - Yes, you should feel urgency! Read below to know why

2. Load up on loans/debt to buy a business - Duh

3. Ignore the advice of professional advisors - This statement is so general as to be dangerous. Experts one and all, including Uncle Clem, all have an opinion. Have one good expert and an excellent small biz account (see below)

4. Trust everything the franchise sales person tells you - The depths of these statements boggle the mind. Look, if you can't trust the franchise development person then do NOT become a franchisee in the system - PERIOD!

5. Base your decision on the earnings of best performing franchisees Well gee Cosmo...of course you do not base your decision on one component of an entire process. But, let me ask you, isn't it nice to know what the best case scenario is? I mean, you already know intuitively the worst; you could fail and lose your investment (Get drunk, wreck the Maserati, get home and the dog had died and your wife has left you and the kids think you stink).

6. Bypass financial questions during investigation processThis is the best of reasons for a franchise consultant so you know how to craft these questions in order to get answers in an area that the Federal Trade Commission crucifies franchises for saying too much.

7. Cut the due diligence process short

8. Assume that the system will run itself, or that you won't have to be an entrepreneur I think you need to be entrepreneurial (or a FRANtrepreneur) but NOT an entrepreneur. You are not alone out there - besides the franchise company there are other franchisees you will get to know who are right there with you. The amount of time and effort should be understood from discussions with franchisees and a thorough study of their business model.

9. Underestimate the value of a franchise network, support and training The first truly insightful point made - franchises are a family all with the same challenges are opportunity. Don't be lame and sit on the sidelines and pretend you are different. Get in, get involved - get to know your fraternity.

10. Fall into Paralysis by Analysis mode

11. Be disappointed if, in the end, you discover that franchising is not for you.

You will quickly realize that buying a franchise is a deliberate process. If you want to become a business owner, franchising will definitely put some options on your table.

However, stick to the process, gather the information and be prepared to make a decision. In fact, be prepared for anything that can prevent you from making a decision.

Andre Chernih is a franchise expert, editor and manager of the web site http://Franchise-Opportunities-Search.com a collaborative compilation of info, articles, opinions and recommendations created to help aspiring business owners learn about franchising and find the right franchise opportunity.

The article has a certain amount of earthy acuity. Much of it is replicated in 100 books on small business ownership and virtually every word can be discovered in articles about franchising on Entrepreneur Magazine archives over the last three years.

I have my own list. I have limited it to what you should do. Doing less than this and you risk ending up never owning a business (because you never feel comfortable enough to be decisive enough to make the decision) or you end up where you should never have been in the first place, misfit in a poor choice (and most likely not manning up to the fact you are a big 'ol giant screw up for having chosen to sign up!) Here is the Wilson list.

1. Take a professional personal assessment evaluations to determine if you are made of the stuff that successful small business owners possess. The DISC, McQuaig Assessment or Meyers-Briggs Personality Tool...any and all of them will do the trick provided you have someone capable helping you understand them. I can tell you that those with strong leadership skills and high levels of sociability are the best material. Those who have learned they have weaknesses in one of those areas can work to and achieve the needed skills. You can't expect success without one or the other.

2. Having discovered you are a candidate to be a business owner generally, look in the mirror, go through all the iterations as to why this is a good or bad idea and decide you are moving forward; a job is not an option this is your decision.

3. Get every person who, in your moments of greatest clarity and honesty you know, beyond a doubt influences you to recognize you have made this decision.

4. Those that are significant others should be a part of the decision-making process to buy into your decision on the front end. They should do everything you do to prepare for this adventure.

5. Armed with an understanding of your personal make-up, evaluate you and all other stakeholder preferences to determine your personal drivers, those that are primary and those that are secondary in this decision. And no, these success drivers are not the same for everyone. Some people are driven by their passions. Some find security (and even enjoyment) working from their competencies and still others need constant change. Some people are energized by human contact and still others are drained in an environment where they have constant human contact. Will it be the industry that entices you or the earnings potential? Will you be motivated by a new concept that provides huge growth potential or the safety of a tried and true brand? Are you a security freak or an adventurer and what about your partner or wife?

6. Armed with determination, personal knowledge and a set of criteria your right fit business must meet, you must next assess your financial situation. You may be perfect for a whole range of opportunities from a psycho-socio perspective but which ones fit both A) Your Wallet and B) Your level of financial risk?

7. Now find a competent personal franchise consultant. If you do not know one call me, I know the right ones.

8. Once the franchise options are in front of you, it will take you 3-6 weeks to make a decision. If it takes you longer you are not, at present, franchisee material. Period! It may not be your fault but you weren't serious. You are not prepared. I say this because within 3-4 weeks (and sometimes life gets in the way and extends it beyond a week or two) you will know 85% of the decision-making information you should be using in order to make an pseudo-objective (I mean you have to want to do it and that is subjective) decision. The other 15% is fluid information. Hey! Remember, this isn't death and taxes. Risks do exist.

9. At week 2 you will know "the one." Get with an accountant, build a cash flow chart.

10. Consult with 4 or 5 successful franchisees and 2 or 3 failures or those who are struggling. Again, your consultant as well as the first franchisee you talk to, will be able to direct you. Ask them all the same series of questions. Have your consultant help you craft this list. Go back and ask the successful franchisee's their take on those that are challenged. Then look in the mirror again and ask yourself. Can I overcome the challenges of this business? Am I more like the successes or the failures - be honest for crying out loud - this is a big decision.

11. Don't expect to be able to negotiate changes to the franchise agreement. Most stand-up franchises will take a "here I stand" even-handed approach to the business. Territory and perhaps marketing support are two areas where they may be special assistance. This is an area a good consultant can provide you with guidance. Just remember, if you are dealing with the top 1000 franchises in the USA they have too much at stake to have new members of the choir singing off key. Their job was to create the circumstances for your success; these include the terms of your franchise agreement.

12. Go Through the End Process with the final franchise choice (make sure they are as excited about you as you are nervous yet excited about your decision).

Growing A Franchise Network with "Big Dog" Strategy

One of the great struggles for many franchise organizations is determining the best method of rolling out their business model. Many consider Master Licensing or Regional Franchise Development.

What I can tell you is that it is not for everyone. If the statistics are a guide then it’s for a very few. Currently only 3-5% of all franchisors use this method to grow their systems. If that is true then perhaps 15% of all franchises should consider it.

Why might this be true. As much as anything this would be true because a method of business relationship has already been established with the franchisee and other stakeholders in the particular business model. Creating new structures in existing franchises is a lot like changing chassis on a moving car.

If the concept is fresh enough, the significant business partners are available in the general marketplace then the right franchise concept, with strong individual unit economics might possibly be capable of embracing it.

What is Regional Franchise Development or Master Licensing and how is it different than a traditional franchise model? At it's roots there isn't a lot different. However, should the Franchisor share the Franchise Fees, Royalties and sometimes Distribution income with a Strategic Market Development Stakeholder for effort and consideration (sort of sweat equity on steroids) then you have the makings of a potentially rewarding business building opportunity - both for the Franchiser and for the Regional Developer (RD).

Let's start with WHY a Franchiser would decide to develop their brand through RD's and what expectation should they create in terms of growth and operational development.

I want to start out with four reasons for a franchise system to evaluate the RD method as a Growth Strategy. They are:

1) Faster Growth - If properly marketed by the right RD - more sales efforts in each Region.

2) Distributed Cost of Operations Provides a profit motive for franchise company and RD.

3) Strong operational experience in the market at the point of entry. This alleviates a franchisee's concerns about lack of understanding of a specific market.

4) Local support creates the conditions for greater franchisee satisfaction and ergo better performance.

The RD is incented to develop their Region rapidly; this creates urgency on franchise recruiting efforts. Using Business Brokers, Franchise Consultants, Local Networking, Online Portals, Classic Advertising, Social Media (I won’t even get started on THAT here), etc. at the "my territory" level enhances interest, provides a higher level of interaction to better evaluate a candidates qualifications and more rapidly move them through an investigation/buying process. In a Master or Regional Development the RD is required to open a showcase unit. Once this “Pilot Unit” is open regionally, potential candidates (many who are simply customers of the unit) become franchisees themselves after experiencing the concept as a consumer.

I am sure you can imagine the reduced growth curve for the franchisor as the RD's begin to recruit in their local market - face-to-face, filtering out the unqualified and presenting the ones who are properly vetted to the franchisor for approval. Now, I overstep my boundaries here but if I were an RD I would look for "zees" with whom I feel I can work well together, who will be a TEAM PLAYER in the market with the other franchisees, and with franchise members that will be receptive to coaching and mentoring that I provide.

Should the business model have enough margin pad in the product/service purchase you can see in an RD model the Franchisor’s costs be to hire, train, house, and compensate franchise support and sales would be greatly reduced. Franchise organizations that “do the math” understand this advantage. Executed properly it can result in strong, controlled, and calculated growth.

Come on! Who doesn’t want that?

One VERY SUCCESSFUL franchise concept that rolled out exclusively through Regional Development has over 540 units open (800+ awarded) across the USA and is supported by a staff of only 40 at corporate HQ. Those staff members support the RDs and the RDs support the franchisees in their local markets. It’s a tiered distribution of training and support. Remember, the RDs are compensated for this with the sharing of the Royalties paid by the franchisees. They make their living as a management consulting firm.

Having said all of that, Master Licensing still needs to be done correctly. This means having sufficient staff to support initial RD location openings and creating a higher level of sophisticated business training to these management firms.

Incubating units and managing them close to home provides a better process to journal and archive Best Practices. Field research is more accurate and customized to best understand the nuances of the variety of market conditions. Continual improvement is delivered locally and thus the brand, its offerings and differentiators are better articulated. This pays dividends when competition is considered and particularly if you can demonstrate the benefit of local oversight versus national neglect.

You can demonstrate a significant compelling competitive advantage (“selling” feature?) of the franchise by heightening awareness of local support by a very specific hometown champion who has a vested interest in the success of the franchisees in a particular market. With the RD only a short distance away and visits more frequent than head office staffers dispatched quarterly or less frequently by the competition, you can become a service hero.

In franchising branding is built one market place at a time. Therefore branding is better grown and controlled locally or regionally and since the RD is responsible for monitoring the local co-op advertising activities in their market the positive power of the franchise market position can be more accurately communicated.

If you are a Franchiser, particularly one that is 5 years of age or less, the RD model can substantially increase your growth and decrease your failure rate and overhead expenses.

What are we looking for in a Regional Developer? What characteristics should be avoided for an RD? Is it for you? Is this the right time in your life and personal circumstances? Much of this is determined by what you already know about your business. The rest should be determined by a brain trust.

Give me a call and we can discuss your situation. I would be honored to be of service.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at dr_franchise@consultant.com

10 Small Biz Mistakes that Lead to Failure

When I started to pen this thought piece I did so in considering small business in general. I’m going to keep that theme in part but I am also going to add to each challenge point, 1 through 10, at least a simple reason why franchising can provide some level of solution and security from the aforementioned mistake.

These mistakes are not the top 10, the only 10, the best 10 the researched and validated 10 or anything else of a kind. They represent the ones I have had to deal with most in my life, with my friends whom are mostly small business men and women and my clients who are mostly small business developers called franchisers. They do represent over two thousand business owners and I would guess this is a good top 10 list (I am probably right 7 or 8 out of 10 anyway) but I am not going to “shine you on” by telling you they are the result of my “extensive research.” They do represent what I feel. I’m pretty good at this stuff though but some of you have your favorites. Feel free to add them to the mix.

I hope you find this useful… - John

1. Insufficient Working Capital

The most common reason why new businesses shut down is that the owner get his business up and running but completely misses that he will need some start-up capital (and often this is not a small amount) to fun his business until it becomes self-sufficient and can pay its own way.

Cash flow is critical to a startup business. You could be profitable and still have to close your doors because your customers are taking too long to pay you or, you are generating revenues but your bills are coming in on the front end more quickly than full payment is being generated to you. Liquidity is king in a startup venture. Know what your business needs to survive start-up.


Franchise Solution: Most franchises and certainly the top 500 in the United States, require that you have sufficient start-up capital available when you open your doors for business. You don’t have to wonder. You will have it or you will not be granted a franchise license.

2. Winners Stick-to-it Attitude

Starting a business is all about survival. How do you stay around one more day so that you can learn more about your market and close new customers?

At the beginning stages of a business this may mean doing work that might not be completely what you want to do but it helps pay the bills. You need to do whatever it takes to survive and get through until the business can fully support yourself.

Franchise Solution: A franchise company has gone through these iterations and virtually all of them have operating units that have gone through the myriad of challenges that face a new business. You have both the company and a fraternity of franchisees to rely on to help you stay the course and recognize the next action you need to take to open the door tomorrow.

3. Death of Your Vision

There is a sort of mystic fog that exists to those who make it past the anxiety of changing their work path and become business owners. They make the decision to become entrepreneurs, they start the business, they work and slave and get the permits and licenses and build whatever needs to be built (websites, walls, displays, computer networks, etc.) and even begin to make customer contact. But then something happens. The result is energy level drops, activity levels fall to dangerous levels and if they don’t completely check out they at least do so mentally.

They quit.

Building a business is all about momentum. If you had 24 hours to spend on a business they would be put to far better use by spending one hour a day than for 24 hours straight.

It takes time to develop a new company and for people to react to what you provide. Keep your momentum building. Even if your business is only a part time initiative for you at the moment, make sure that every day you are making progress of some sort to move your company forward.

Franchise Solution: A franchise company helps provide you with a business plan and marketing strategy for your first quarter, 6 months, and year and beyond. You have an activity chart. You can evaluate what you are doing against a very specific set of actions and responses.

Further, operational support is there on a regular basis to ensure you are keeping an eye on key indicators. They let you know what is lacking. Is there an area where additional training or marketing needs to be added? A franchise company has a vested interest in your success and one way they demonstrate this is to let you know you are slipping and need to pick up the pace!

4. I am a Rock – I am an Island

Business ownership is not an exercise in self-sufficiency. It is not you being “bossless” or mentorless. Nobody is perfect or has the skills to do everything themselves. You need to understand what it is that you bring to the table and what you need to surround yourself with. You need to resource against your weaknesses. If, for example, you are very strong at statistical analysis but don’t have strong customer service skills then you need to find a strong frontline employee who enjoys client contact.

I want you to understand you need to learn and be willing to do anything to keep going. However, you won’t create high levels of success by forcing yourself to do things that you don’t enjoy and in which you lack core competencies. Know where you stand and what value you can offer. Take a Meyers-Briggs or DISC evaluation if you never have. When you surround yourself with others that complement your skills, you will have more fun and demonstrate to your stakeholders you recognize what is needed to create a world-class business unit.

Franchise Solution: I won’t draw this one out because if you have studied franchising you’ve seen this in type before: Franchising is about being in business for yourself but not by yourself. People, in part typically become franchisees because they realize their inadequacies (and they want to blame someone else when they fail! – No, just kidding). You get into a franchise system to take advantage of the collective

5. Are You Sure You Want to Hire Uncle Rupert?

Never hire from convenience or nepotism. Focus on tasks the CEO should accomplish. Think of yourself that way. Think what will best serve your customer in the long run. Why are you doing work huddled in the back office when you should be out meeting clients, generating PR buzz, and increasing the reach of your networking efforts?

Franchise Solution: A franchise plan will focus on the varying skill set iterations of their successful franchisees and how they interact with the business in advance of your engaging in the business to determine if you fit that model. This may affect working capital needs as well but they will be able to provide you a more precise human resource needs assessment than you might generate as a lone entrepreneur.

6. It’s About the Big Bucks

There are many who tell you to follow a passion. Many of us to be fair do not have passions affiliated with work. You need to enjoy the work. You need to gain great satisfaction from a job well done. But creating money as a goal or as your driving force is like the tender of an apple orchard who constantly picks apples because they are what he sells in order to create a living but who never tends to the soil or the trees themselves.

Ensure you select a business where you gain personal satisfaction by the process; by servicing the client and their needs and by your ability as “CEO” in developing your people, your team.

Franchise Solution: The great franchises have a process to determine if what they do as a business matches your expectations, personal drivers, abilities and investment capabilities. Your honesty in divulging what it is you hope to accomplish and their honesty in presenting their business case ensures to a very high level, that you get into the business that meets both the companies and your criteria.

7. I think I can…er, maybe not

Goal one, yes job one is for the entrepreneur to make it to the end of their first year. Many of them do not. And, we’ve covered some of this already. Many start a business on an impulse and got excited about a perceived opportunity but didn’t do the proper research. These entrepreneurs become disillusioned. Without a backup strategy or the ability to change course or raise additional capital they fold in a matter of months.

The second year can be just as challenging and the goal is that a business really begins to come into its own and hit the stride through 36 months of continual operations. Think of year one as your freshman year in high school; it was exciting and frightening You’re high on energy and ready to take on the world. In year two, your sophomore season, you have learned the lay of the land but may or may not have had the kind of impact (especially financially) you desire. The startup excitement has faded but you are move even. If not, you are part of the second wave of failures. You’ll need to work your way through the downturn and know that the money is coming if you keep at it.

Franchise Solution: A franchise company will have continued to press you right through years one and two in areas of improvement. You will have gained mentors within the family of franchisees. In many cases you will find a colleague in another unit and you will challenge one another. In addition, ongoing or advanced training, webinar events and perhaps a national convention will be in the cards; all of which will provide you with the momentum to carry forward.

8. And Great Was The Fall…

The best way to make a lot of money quickly is to find a customer who has a problem and is willing to pay you to solve it - and then you go out and build the solution. Entrepreneurs who build a business on a customer or on a sliver market component (i.e. the lunch crowd in an industrial park that is controlled by just one company…oh, say, Motorola!) often find themselves calling the printer and instructing him what to put on the “Business Closing for Good!” signs.

Make sure you have a plan if you plan on being a niche business. But this isn’t the only challenge that fits into this category.

The companies with the highest failure rates are restaurants because they are usually built around an owner’s personal tastes. Meanwhile, the entrepreneurs with the lowest failure rates are medical professionals, lawyers and accountants because they are based around a service that we all need (whether we like it or not!) Talk to potential customers, see what they are interested in, identify who has money and what their pains are and then create your product/service.

Franchise Solution: A franchise business model, virtually by definition is replicable in significant marketplaces. They focus on a series of capabilities that fit into a general category that the general populous or the whole of a niche has need of what they provide. It’s simple enough to investigate to determine the components that lead to their success and what it is you would want to avoid. As a matter of course the franchise company will understand the pitfalls and provide navigation around the slippery slopes. That is, provided you are teachable. The key to disaster avoidance is sensitivity to those who’ve traveled the path previously.
Franchising is nothing if it does not help you pilot past the shoals and the reefs of disaster.

9. I’ll Just Read About it…

The Internet has created a generation of nimrods. Pseudo-geeks who believe that if they can just Google it they can learn the entire story; the ins and the outs, the ups and downs and all the juicy insider tidbits.

A great way to get a business going is to find out what other people have done to achieve success and implement those strategies into your own company. This has to be more than just reading about it. We all need to find mentors who have knowledge of our industry and who will give you time out of their day to provide instruction and guidance.

You could set up a formal board of advisers and compensate people for their time but if you’re a startup you can play on the fact that most entrepreneurs are willing to help out a fellow business owner as a way to give back. If you show genuine appreciation and approach the right people, the advice you get will help make or break your company.

Franchise Solution: Uh…this is self-evident. However, let me just say it. A franchise company IS a mentor. They provide the organized development of your business. They start at what you need to do on day one and take you through what you will do when you elect to exit the business. You will receive training, a business system, a marketing strategy, a back end or back office administrative system to analyze data, create reports and evaluate progress and in all sincerity that is usually just the beginning.

10. What the World Needs Now…(er…Come Together…Um, I am NOT a Rock nor an Island?)

My experience is that the person who will not seek out help will also not seek out how to create other important relationships. As it relates to your stakeholders this would mean your involvement in the community that embraces your customers and potential customers.

Connecting with other young entrepreneurs and finding out what they are up to (and how you can help generate countless opportunities) is a great tie-in to your community. Discovering and involving yourself in the areas of service that your clients have interest and passion should truly be a no-brainer. You will get new business opportunities, partners, investment, media attention, ideas for productive tools to use, advice for your company, and many other resources that otherwise would take you years of trial and error to figure out (if you ever do at all).

Franchise Solution: Most every significant franchise I have ever had the pleasure of serving (roughly most the top 200 and another 100 or so in the top 1000) has a strategy these days that recognizes the value of the community the franchisee serves as an integral part of their marketing. Even in franchises where the franchisee works on the business and not in it or is involved part-time, they are taught to focus their efforts on visibility within their service market.

Does Big Name Create Big Earnings and Security?

Most people equate franchising with those Top-of-the-Mind mega systems. We think of names like McDonald's, Burger King, Taco Bell, Subway and perhaps Dominoes Pizza. Hotel chains like Wyndham, Hampton Inns, Hilton and even Marriott have large numbers and international reach. Other business-format franchises like H&R Block, Thrifty Car Rental Curves or ServiceMaster are just big.

But what is the advantage of this and are there disadvantages?

I am sure you've guessed the answer already haven't you?

First-time franchise buyers are typically hoping to receive at least two benefits from their decision. They hope the franchise has a valuable brand and they expect it to have a proven operating system. The primary advantage of big franchise companies is that both of these are basically set in place. You can easily research consumer awareness and attitudes about the brand just by asking around. A well planned visit to operational outlets will provide you with some local subjective information about their customer service and operational execution.

There are other advantages of course. Safety and security are assumed. The risk of failure when aligning yourself with a larger franchise system should be lower. Most of these are more mature systems that have worked all the chinks out of the armor which is their business system. Success isn't guaranteed but you will feel more secure..

Is Bigger Always Better?

Of course you know the answer is no. The major downside issues are:

• Cost of entry (the value proposition) will be greater per unit
• Reduced Opportunity because of limited territory availability
• More maturity – more applications = Greater Experience Expected on the part of the franchiser
• The tendency of these systems to favor seasoned operators with current holdings
• There is less wiggle room for entrepreneurial spirit
• The older and larger the system the greater the expected compliance

The bottom line is that any large system has developed enough territory and build-out significant units that approval to open a new unit as a new franchisee can be a long drawn out process.

It is more likely a new franchisees will enter a large franchise organization by purchasing an existing franchise. While this can actually be an advantage to you, since it allows you to review the operational and financial performance of the unit or units before you decide to buy (And make sure that you do!). Buying an existing business with profitable operations has massive challenges, primarily related to relational issues with clients, employees and a fully developed culture. What appears a benefit, in terms of the record, is not nearly as good as over 50% of all re-sale franchises fail within the first 24 months. I never recommend resales unless I first and individually investigate them personally.

My Bottom Line

While I understand the mindset surrounding the issue of branding the fact of the matter is that there are 1000's of national franchise companies all of whom have highly successful business models and profitable franchisees. You and I can only name a few in comparison to the size of the market in franchising. What about the rest? Where is their branding? The truth is you and I may only remember them if our memory is jarred (Snap Fitness, Massage Envy, J. D. Byriders, Friendly's, Disaster Kleenup International and 1000's more. By the way, the ones I named are even in the top 100 in terms of operating units!) but the people who matter, their client and prospect base knows who they are...intimately.

What's the point?

The point is that virtually every franchise business that is successful in North America and Europe simply needs the right franchisee that matches their profile in order to succeed. Branding and market positioning is created at the local level; the level at which the franchise unit exists. Find the franchise that matches your goals, skillset, interests...YOUR priorities for business ownership and you will find a beautiful thing be it large or start up.

Every franchise is seeking franchisees with the talent and capital to make their business a success. Big or small, most franchise companies care deeply about the success of all their franchisees. You can find just as much heart in a small company as in a larger one; frankly usually more and more passion and more communication. My recommendation is hook up with a consumer franchise consultant. Call me if you need a recommendation. With their assistance you can take the time to look into a number of alternatives when you're contemplating franchise opportunities--big company or small--and with their expertise and previous investigation into the various systems you'll find the right one to maximize your chance for success.

John is a 26-year professional in the franchise industry. Previously he has been a franchisee, a franchise executive and an advocate/consultant to the public. He currently works with and has worked for dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at dr_franchise@consultant.com

LOCATION LOCATION LOCATION? Not So Much...

Franchise location, when considering retail and location driven franchise businesses are always a hot topic. Many papers written on the subject drive the subject as if it is the major component of success in the concept. Recently a Wall Street Journal article suggested the homogenizing of American business simply relegated where a business located to a secondary value. The reason? You can now go virtually anywhere and get anything. That would be accurate for most everything we want in our day-to-day lives.

Regardless of what you might have heard to the contrary (or spoken) the same principle holds true in franchising. Industry research suggests that brand positioning, operational and consumer perception factors play a more significant role than location in explaining franchisee success.

Why is location less significant in explaining franchisee success?

Part of the reason is that as our economy has shifted from manufacturing to services, the uniqueness of location has waned. Fifty years ago, most of our gross national product was based upon the manufacturing and agricultural sectors, transportation costs were high, and there were vast regional differences in products and services.

There was a time that if you wanted sourdough bread with your lobster, you had to travel to one of two places in the continental USA, San Francisco and/or Boston. What about today? Now you can enjoy that combination nearly anywhere. In the new economy, services, ideas, and knowledge can be easily transported and replicated, and many regional and local differences no longer exist.

Franchisees and franchisors have certainly benefited from the shift to a service economy with strong distribution channels. The proliferation of services also means that location plays a smaller role in franchisee success. Nearly all products and services can be purchased anywhere.

What is the Practical Application for Prospective Franchise Buyers?

If I were buying a location-based franchise today I would be skeptical of the franchisor whose major selling point is the location of one particular unit or even the organizations ability to select the “home run” sites for future development. If they focus on location we all know how a location can change overnight.

As you search you should focus on operational excellent, the integrity of the franchisor, the uniqueness of the product or service offering and their positioning within their market space and the culture and synergy of the franchisee community. Location has some impact on franchisee success, but fortunately, the impact is significantly less than what most people believe.

Knowing that location has limited impact on franchisee success will save you countless hours of frustration and allow you to focus on those things that really drive success.

What are those things? How about:

1. Your ability to learn and apply management principles appropriate to the system
2. The relationships you develop with the business stakeholders
3. Your involvement in the wider community in which you operate your business

Surprisingly, very few people figure out that franchising success is driven not by the location of the franchise unit, but by the behavior of the franchisee. As part of the ongoing consulting of my company we were working to resell marginal franchisees out of a particular system in Phoenix. Every one of them that wanted out in part blamed location and the company for allowing them to be in their mutually agreed on site. Oddly enough, years later, the new franchisees who were handpicked to take over these "distressed" units are moving right along as a group and growing their business; many of whom were owners previously and took over these “loser stores.”

NOT A LOSER STORE

The franchisees that followed in their footsteps-in the same location—are some of the most successful franchisees in the system, with strong sales growth, low employee turnover and above-average margins. If it were really a "loser location," the argument goes then nobody would be able to turn it around.

THE KICKER

Disillusioned franchisees that believe that their site is the significant driver of success can easily avoid responsibility for the growth and development of their units and instead blame things they cannot control. Stupidity never ran rampant so easily and misery was never able to find more friends. I would advise you to follow three steps to be a successful franchisee.

First, act like a CEO. Regardless of whether or not you are comfortable with the title, if you’re a franchisee, then people who work with you, work for you and purchase from you believe that you’re the CEO.

To be successful as a franchisee you have to develop an executive mindset, one that meshes leadership and learning as the cornerstone. I have personally interviewed executives at some of the best-managed companies in America, and I consistently find that successful senior executives share at least three characteristics in common:

• A scope of personalities, perspectives and reading materials that stretches them outside of their career and market box.
• Strong interpersonal skills that drive them to understand others and create trust.
• A business acumen that drives them to understand all aspects of business success.

Second, develop your social assets. This refers to the relationships you have with others.

Franchisees with the highest levels of social capital have the highest sales. Period.

Success is driven not by the location but by the behavior of the franchisee.

So why doesn’t everyone develop high levels of social capital? Well, it’s tough to find the time to interact with others when you’re running your own business. Also, once you become an expert in something, it’s easy to believe that you won’t learn anything from anyone else and learning is a HUGE part of developing your personal relational assets.

But the most successful franchisees find the time to interact with others, and they develop relationships with at least the four critical constituencies: franchisors, other franchisees, customers and employees.

I have heard numerous unsuccessful franchisees complain, "The franchisor doesn’t understand my local market or know who my customers are." Ok, so teach them about your local market, and while you’re at it, learn something about your franchisor’s business and challenges.

BOOST INTERACTION

Similarly, if you have only limited interactions with the other franchisees in the system, you won’t be able to get support, help and advice from the people who might be able to help you most. By developing strong ties with other franchisees, by sharing your ideas and strategies, you’ll help build a stronger system.

Many unsuccessful franchisees elevate customers to royalty status with common slogans like, "The customer is king!" Customers are important, and you would do well to have strong enough relationships with some of them so that you can learn how your services and products can be improved. There is more to the subject than this glib slogan.

Employees are equally important to your success, and the high-performing franchisees realize this is where you start in the value chain. Employees should be, in your mind as the CEO and business owner, your first level customers. You need to invest in your employees. The best treat their employees well, create clear objectives so they personally can measure their success, provide them with growth opportunities and hold them accountable to high standards they have seen the franchise owner model.

It doesn’t take a genius to know that employee morale has a direct (and positive) influence on customer satisfaction. High customer satisfaction levels impact your future business, can lead to referrals to other potential customers and increase opportunities for additional revenues through otherwise missed opportunities.

It is equally important to have fruitful relationships with employees, since employee development is not a cost of business but an investment in the future growth of your business.

Investing in your social capital and developing relationships with franchisors, franchisees, customers and employees will help elevate your business to one of the very best in any system and, in the long run, boost your bottom line.

Finally, invest in your community. The most successful franchisees in my experience invested in the communities represented by their business scope as well as direct investment into their businesses.

This form of investments means involvement in activities and associations that are not solely self-serving. You certainly may already have certain volunteer, non-profit or community associated activities such as any number of disease oriented causes, food banks, holiday fund and material drives. Your local church may also be very community oriented. The key is to find the soft spots your marketplace has developed and dive in. It doesn’t really matter what you do as long as you make an investment in your customer bases view of “community.”

The franchise trademark alone will not lead to high performance. (We will discuss this soon!) Just as wrong is to believe that location is the most significant factor in franchisee success. The range of franchisee performance in every system varies, and I have yet to hear a franchisor say, 'So-and-so is our highest revenue franchisee because of their location."

A mentor of mine once said, “If we took every franchisee in our 300 unit system and moved them one store number to the right (store owner No. 1 now owns store No. 2 and two owns 3, and so on) we would simply move the results of our revenues geographically not increase them financially.” I believe she was right. The evidence supports that thinking.

Barring acts of God or the governing body of the area you are located, your ability to perform as a franchisee is virtually independent of location. Invest in yourself, your relationships and your community, and then you will be a high performer.

John is a 26-year professional in the franchise industry. Previously he has been a franchisee, a franchise executive and an advocate/consultant to the public. He currently works with and has worked for dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at dr_franchise@consultant.com