What Should You Look For When Considering a Business to Purchase?

By fmopblog | Published: May 9, 2011

What Should You Look For When Considering a Business to Purchase? Unfortunately, too many prospective buyers want to know the asking price first and then how much money can they make.  While these are important questions; these are the wrong questions to ask initially. You need to know how much cash the seller requires as a down payment. (or how much you need to put down on a new franchise)  There is no point in looking at a business no matter how good the numbers are if the seller wants three times as much cash as you are willing to invest.

Remember the actual amount of money a business earns is usually much more than just the bottom line. A smart approach is to get more information on the business, and even make a visit, before ruling it out or getting too involved in the numbers. It’s all part of the learning process.

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Entrepreneurship in America at 15-year high

By fmopblog | Published: March 9, 2011

Entrepreneurship in America is at a 15-year high according to a study released yesterday by the Kauffman Foundation.  On average 565,000, new businesses were created each month last year.  Interestingly, the largest entrepreneurial activity rate was among Latinos, followed by Asians.  African-American and non-Latino white entrepreneurial activity rates decreased a very small amount last year.  Immigrants were twice as likely to start a new business as native born and a large percentage of the new business created were for hands on owner operated, without employees.

If you’d like to read the full report click here; if you like to become part of that trend click here and I’ll help guide you on the journey of business ownership. 

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Franchise Business Economic Outlook: 2011

By fmopblog | Published: March 8, 2011

The forecast for the franchise industry for 2011 looks great.  PwC (the company formerly known as PricewaterhouseCoopers) recently prepared the “Franchise Business Economic Outlook: 2011” for The International Franchise Association Educational Foundation.  The predictions for this year are very strong and encouraging for those of us in the franchising industry. 

PwC projects faster growth in establishments, employment and economic output in every franchise sector except in real estate franchising.  Franchise revenues are projected at 4.7% growth, and would be much higher if the real estate franchising industry wasn’t flat.  Franchised businesses are expected to have a growth rate about 33% better than last year and about a 50% better growth rate than non-franchised business. 

If you are interested in taking advantage of this positive trend, contact me at 913 888-1400 or visit my website to set an appointment.

The full PwC report is available here.

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Focus On One Idea At A Time

By fmopblog | Published: February 25, 2011

I attended a presentation this morning by David Wanamaker of Cumulus Radio on his company.  One of the items he passed out was a paper titled “Simple Tips for Creating Effective Ads.”  He had a number of great tips; the first one is to “focus on one idea.”  Sometimes I find that difficult because I have so many different things I want to convey in my advertising.  Should I focus on the fact that I’m full service?  Should focus on my free service, my 200 different opportunities, and the fact that we help businesses transform themselves into franchisors or should I focus on the business brokerage portion of FranchiseMart?  That’s a tough question for me.

When a new client comes to FranchiseMart I usually encourage them to limit their serious franchise consideration to 2 opportunities at a time.  I’ve found that the clients who walk out the door with more than 3 to consider tend to “shut down” because of information overload.  The normal process of franchise investigation for my clients is as follows:

  • First the franchisor calls and sets up an appointment to have a phone conversation with the client.
  • The prospective franchisee and the franchisor have a 45 minute conversation.
  • The franchisor sends the prospective franchisee the Federal Disclosure Document and other marketing material.
  • The prospective franchisee reads all the material.
  • Another phone call with the franchisor to answer questions and maybe a webinar.
  • The prospective franchisee calls a representative sample of current franchisees.
  • The prospective franchisee may attend a discovery day/ decision day at the corporate headquarters.

At this point the prospective franchisee is ready to make an informed decision.  If a person is researching multiple franchises at the same time it is easy to see how time consuming this process can become.  For that reason I always suggest only focusing on 2 opportunities at a time. 

Visit my website.

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The eleven resolutions you need to make in 2011 if you want to get into business for yourself:

By fmopblog | Published: January 17, 2011

The eleven resolutions you need to make in 2011 if you want to get into business for yourself:

11.  Raise your credit rating to at least 760

10.  Save some working capital, usually between 3 and 6 months of expenses.

9.  Complete a self assessment of your skills, likes and dislikes.

8.   Establish your timeline for getting into business for yourself.

7.  Review the various business models available.

6.  Determine if you’d prefer to start researching established businesses for sale or new franchise opportunities.

5.  Develop a personal budget to ensure you understand your financial requirements once in business.

4.  Determine your business type preference; home-based, retail, food, shared office space, business to business or business to consumer.

3.  Resolve to completely investigate each opportunity you identify.

2.  Ensure you have the support of your spouse, or other important persons in your decision.

1.  Remember that FranchiseMart can help you with most of the above items.  Make an appointment to talk to us today.

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Is Franchising Right For You?

By fmopblog | Published: January 5, 2011

Going into business for yourself and controlling your own destiny is a “gut-check” for everyone who has ever taken that step.  There is a lot to consider.  High on the list is answering the question, “Is Franchising Right for Me?”

 That is an important question and you should consider the following benefits of franchising.

1.    You are not alone in starting, running and growing your new business. The franchisor, the company that you are joining forces with, is contractually bound to help you with these aspects of your new business. The franchisor has already gone through the learning curve of starting this business model, so that you don’t have to. This saves you time, money, and aggravation while avoiding the mistakes that are common when starting a business from scratch.

2.    With franchising you have existing franchisees to speak to about their experience before you join. With the proper guidance you can really leverage their overall experience and gain valuable insight before you join their system.

3.    You will also get tested and refined marketing plans, sales materials, and business planning assistance. You’ll be relying on the franchisor’s past mistakes, lessons learned, and their overall successes. Their failures and successes have been studied and processes have been put in place with these experiences in mind.

4.    Name recognition and a loyal customer base may also come with your new franchised business. Larger franchise systems often have millions of customers who already know what your products and services are. In many cases your local customers are already sold on what you have to offer and can’t wait to patronize your business.

5.    Since the franchisor negotiates on behalf of all the franchisees, you should expect to have reduced expenses on the products you offer. Simply put, the franchisor is in a great position to negotiate better terms and receive volume discounts than you could expect as an individual.

The benefits of franchising are numerous and I’m here to help you find the right franchise based on your needs. My services will never add a single expense to your franchise purchase and I often can save clients time, money, and aggravation.

I look forward to using my years of experience to assist you in your search to find the right franchise opportunity.

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What is Franchising?

By fmopblog | Published: December 10, 2010

Franchising is a relationship between a franchisor and franchisee, in which the franchise pays for the franchisor’s proven systems.  The franchisee is granted complete access to the franchisor’s business strategy, marketing strategy, operations strategy, and the use of brand. It often also includes learning from the franchisors mistakes and not repeating them.  Franchisees have a legal relationship with a successful business model.  They have the right to use its systems and capitalize on its existing brand awareness.  The goal is to leverage that system into a quicker and higher profit levels.

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New and Improved Top 10 Questions To Ask A Franchisee.

By fmopblog | Published: November 29, 2010

It’s been a little over a year since I posted the “Top Ten Questions to Ask a Franchisee.”  I’ve been reviewing them and decided that I’ve got a couple of small tweaks to the list and so I’m now posting the “New and Improved, Top Ten Questions to Ask a Franchisee.”  Before we get to the new list I want to stress that if at all possible, I believe you should interview them in person; this allows you to get a better understanding of the person and see firsthand how they run their business.  I do understand that most of the time you’ll be asking the questions over the phone.

  1. Why did you choose this franchise?
  2. What are the 3 things you like best about the franchisor?
  3. What are 3 things you would change?
  4. Did the franchisor keep all of their promises and are they open to new ideas?
  5. What is your market area like?  (Does it compare to what you are looking at?)
  6. How was the initial training?
  7. Tell me about the ongoing communication you receive from the franchisor?
  8. Do the franchisees works together?
  9. Is your ROI meeting your expectations?

10.  I like what I hear, would you consider selling me your operation?

OK, the tenth question is the only really new one, one of my clients suggested it to me and I think it’s really good.  If they say yes are willing to sell it to you cheaply, they really aren’t happy with their franchise.  If it is only at a high price or they give you a flat-out, it’s not for sale; you can be assured they like what they are doing.

I think you will find that franchisees will be willing to openly discuss your issues and are a great source of information.  Keep in mind that in all franchise groups you will find franchisees who are wildly successful, people building a good business and people who have complaints.  Is there anyone similar to you in the group you interviewed?  That could be a model for you and a good indication of how you’d do in that franchise system.  

If you talk to someone who is really positive about the franchise and they aren’t at all like you, that endorsement might not mean that much.  At the same time if a person is very negative but they aren’t like you their complaints might not be applicable.  The opinions of franchises with similar backgrounds and personalities to you should be the most valuable in your research. 

As always I’m here to help you in your business search and there is never a charge to use my services.

Visit my website.

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To VLOG or not to VLOG – that’s the question.

By fmopblog | Published: November 16, 2010

 

I remember when I first heard of the concept of blogging, about 11 to 12 years ago.  My son was still in high school and he explained the theory behind wanting to put your life on the web.  I didn’t expect at the time that I would soon have a personal blog, and now have a business blog.

I don’t know if this is a true demographic, but I consider myself an “Old, early adopter.”  To me that means that for someone over 50, I pick up new trends in technology quickly.  I know that VLOGs have been around for a while now, according to Wikipedia the VLOG has been around since 2000.  Not long after I first heard of blogging.    So many I can’t call myself an early adopter with my VBLOG, nevertheless, I don’t personally know of any of my friends with VLOGs. 

If you want to visit my VLOG click on this linik.

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How can you be sure you are getting into the perfect business for you?

By fmopblog | Published: November 2, 2010

Unfortunately, there is no sure-fire scientific formula to match you with your perfect franchise.  The franchisors do their best to make sure they only award franchises to qualified candidates who have a high success probability.  And of course everyone I’ve ever known who has purchased a franchise has done their best to be certain they are getting into the right business model for them.

Many franchisors have a candidate profile they are looking for, make sure you fit that profile.  That profile is usually pretty wide, with lots of room for variance.  I suggest you take the following steps:

  1. Ask the franchisor for the profile of their successful franchise.
  2. Determine if you match that profile.
  3. Call a large number of those franchisees and ask them about their experience.  (suggested questions can be found here in previous blog posts.)

Most people take the step of calling the franchisees after they have had extensive conversations with the franchisor and these franchisee calls tend to be key decision making tools.  I know numerous people who have found these calls to be more important than the financial projections they develop.

In the end, I think good decisions are made when you balance all the facts and research.  I don’t think anyone can walk into any business venture with 100% certainty.  Following the steps of the process can help you have a higher degree of certainty. 

Please contact me if I can be of any help as you search for a business opportunity in Kansas City.

Brad Johnson – (913) 888-1400

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