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Fear: leverage it to achieve your dream of business ownership

Fear is a natural protective response, especially when you are about to experience something you’ve never experienced before. Fear of the unknown can keep us safe because it forces us to evaluate the situation before moving forward.  While fear can keep us safe, if the perception of fear is not managed and assessed rationally it can also keep us from realizing our dreams.

For example, a Gazelle can leap ten feet in the air and jump nearly thirty feet in a single bound. However, place them in a zoo, bound by a six-foot concrete wall, and they are paralyzed. They are paralyzed by the fear of not being able to see what is on the other side. Therefore, they won’t attempt to make a leap for their freedom. Many of us are like the gazelle. If we can’t see what lies on the other side we won’t take the leap. Thus, we remain caged by fear and live our lives always wondering, what if?

The Dream of Business Ownership

There are many people in the world that dream of owning their own business. Odds are that you are one of them. When people tell me that they would love to own their own business, I always ask, “Why?” In most cases, they talk about the freedom that comes with business ownership. Freedoms like, the ability to make their own decisions, set their own schedule, determine their own fate, and one day realize a level of financial freedom that just isn’t possible when working for someone else. However, I also find that few ever act on their dreams of owning their own business.

When I follow-up with, “What’s holding you back?” I usually hear things related to fear of failure, such as: What happens if I don’t make it? What happens if I quit my job and realize this wasn’t for me? I have a family and can’t put them at risk. I’m afraid I don’t know enough to do it on my own. And etc… While these are great reasons to take a step back and evaluate the opportunity before taking the leap, none of them should stop someone from investigating the possibility of business ownership. Fear of the unknown should force us to do our due diligence, it should not cage us.

Knowledge Is Power 

When we experience the emotion of fear we first must ask ourselves, “Why am I fearful?” Knowing the genesis of our fear helps us in our investigation of that fear. In many cases, fear is based on perception, a lack of knowledge, a lack of confidence, or all three. We let the fear of what might happen paralyze us. Starting a business certainly involves a lot of unknowns. However, if we take the time to understand all aspects of the business we might find that those things we fear are not to be feared at all. We might also find that if we operate as a good business person should their is more to be excited about than feared.

Experience tells us that the more we can learn about those things we fear the less fearful we are. For example, think about something you feared, but through education and practice you overcame that fear. For some, it might have been learning to drive a car. For others, it may have been learning to ride a motorcycle, jumping off a high dive, rock climbing, or navigating a boat. For me, it was learning to scuba dive. No matter what it was, once you became knowledgeable and gained experience the fear subsided and you became more confident.

Take the Leap

Business ownership is no different than learning to ride a bike. To overcome the fear, you must do your due diligence and educate yourself. Then, practice those skills that have been identified to be the best practices for whatever business endeavor you choose. If you are a person who just doesn’t have the skills or knowledge to start a business from scratch, but you have the drive, desire, and business savvy to try it on your own, there are other options. You can achieve the freedom of owning your own business and the support of proven systems through franchising.

Franchising offers an opportunity to own your own business while benefiting from someone else having figured out the systems, process, product, and brand. If you implement the franchisor’s systems properly and operate using tried and true business practices your odds of success are much greater than trying it without franchisor support. With that said, you must realize that franchising does not guarantee success. There are many out there who have tried franchising and failed. However, I have found that many of those who have failed not only failed to implement the franchisors systems properly, but they also failed to utilize fundamental business practices. In most cases, it is the franchisee’s failure to operate efficiently and effectively, follow procedures, hold people accountable, maintain tight financial controls, and focus on customer service that led to their demise. Likely, had they gone it on their own without the franchisor’s support they probably would have failed anyway and much sooner.

What If?

Business ownership is scary and it is a lot of work. However, if you talk to those who took the leap you will most likely find that the risk was worth it and the reward was much greater than staying in their comfortable job that restricted their creativity, passion and drive. Business ownership isn’t for everyone, but until you dig a little deeper you’ll never know if it might be perfect for you!

Navigating The Road To Franchise Success

There are many reasons an entrepreneur chooses to engage in business with a franchise as opposed to going out on their own. Just like personal relationships, most franchisees are drawn to a franchise because they like how the brand looks and feels. Maybe it was the brand marketing that caught their eye. Maybe it was an experience they had with the company. Maybe it was a product or service that blew them away. No matter what it was that attracted them to the franchise, it was something they believed others would find equally appealing.

In most cases, the attraction to a franchise comes through a product or service experience. Humans are fairly consistent when it comes to identifying differences in experiences. For example, most people can quickly describe the differences between K-Mart, Walmart and Target. There is no doubt that product pricing will come up in the conversation. However, if product pricing were the only deciding factor when it comes to business success Target wouldn’t exist today. There is much more to business than price. People are willing to pay more if a company can make a case for the added cost. For example, corporate culture, brand image, established systems and processes, customer experience and etc…all contribute to the overall experience and either draw the consumer in or pushes them away.

Those factors and many more are reasons an entrepreneur may be drawn to a franchise. The idea of owning a “turn key” operation with a proven business model is extremely attractive. Knowing that someone has not only figured out what makes for a sellable product, but they’ve also figured out the branding, marketing and systems that are necessary to support that product can be worth every bit of the royalty fee a franchisee will be asked to pay. After all, the percentage of sales a franchisor will demand for having done all that work to develop a successful business model may pale in comparison to the work, financial investment, and risk one might have to take on if they were to do the same on their own.

That said, not all franchises are created equal. Therefore, a prospective franchisee must be vigilant in their assessment of not only the franchising opportunities that are out there, but also with their understanding of what it will take to succeed. While much of a franchisee’s success lies with a quality franchisor, a franchisor can only do so much. Even the most successful franchisors have some dogs in their portfolio. In most cases, the dogs are not because the brand is weak or the product stinks. It’s usually because the franchisee failed to hold up their end of the bargain. Some franchisees just don’t do what needs to be done to succeed. I would venture to guess that had the dogs in many franchisor portfolios gone it on their own and not engaged with a franchise they would have died the same death, only quicker.

No franchisee that I know wants to fail. However, just like franchises, not every franchisee is created equal. Not every franchisee is built for business.  We’ve all seen examples of a business failing under one person, only to succeed under another. Some people are naturally built for business and some are not.  However, this does not mean that someone who is not a natural cannot learn to be a successful business owner. The difference is in behaviors. The great thing about behaviors is that they can be taught and learned. Therefore, there are certain behaviors that every franchisee can learn from those who are successful. Once learned they can greatly increase their odds for success. However, the identification of the behaviors alone will not lead to success. Its the execution of those behaviors that garners results. Anyone can create a plan, but not everyone can execute the plan.

Below are some behaviors that I have found to be present in successful franchisees. I consider them to be the differences between those franchisees who DO succeed and those who DON’T.

What Successful Franchisees DO:

  • They read and understand the Franchise Disclosure Document (FDD) and Franchise Agreement (FA), ask questions about both and seek legal opinion before contractually engaging with the franchisor. A good franchisee knows the rules of the game before playing. There should be no surprises after you’ve signed the agreement. A franchisee must know all the financial obligations, as well as all of the limitations and expectations being set forth by the franchisor before they sign on the dotted line.
  • They confirm in writing any oral representations that are made. A good franchisor will not make any claims that cannot be backed up in the FDD. If claims are being made that you have not read in the FDD or FA, hold the franchisor accountable for putting it in writing. If they won’t then that will tell you all you need to know about the character of the organization’s leadership.
  • They interview current franchisees. Don’t just rely on the list of franchisees that the franchisor may have given them as possible contacts. They look in the FDD and call a few that are not on the list. Then they ask some very pointed questions about the franchisor and their experiences. One very telling question to ask is this, “Knowing what you know today, would you engage in business with this franchisor again?”
  • They seek to understand how many multi-unit owners there are. Multi-unit owners telegraph satisfaction. If there are many one unit owners it could be for a reason, which may be dissatisfaction. After all, you don’t typically invest in more units unless you are a satisfied franchisee.
  • They seek to understand why franchises have failed. Every franchisor has some number of failed franchises. This is part of doing business. Some people who get into business had no reason for doing so in the first place. Many franchises fail because the franchisee did a poor job of running the business. That’s not totally the fault of the franchisor and in many cases shouldn’t be held against them. However, a franchisee should try to figure out the cause of the failure. Even if failures were the fault of the franchisor, it is worth understanding why they failed. I wouldn’t throw the baby out with the bath water because some franchises have failed. Maybe you’ll learn it wasn’t the franchisee. Maybe you’ll learn that early on the franchisor had some poorly designed systems that contributed to some of the failures. Maybe you’ll also discover that the franchisor learned from those early mistakes and rectified those errors. Almost every company makes execution mistakes. Companies like GM, Ford, Toyota, and Apple have all screwed up in their history. It doesn’t mean they are bad investments today.
  • They know how much capital it will truly take to succeed. Every business, franchise or not, must withstand the test of time. In my analysis, the most successful units are those that have been given time to become established. There are few overnight successes. Even some of the most iconic franchise brands needed time to establish themselves. Having enough capital on hand to carry the franchise through that growth stage is critical. Cash-flow is king in small business. However, it may take a few years to get to a point where enough cash is flowing for the business to support itself on its own.
  • They interview the corporate personnel before agreeing to become a business partner. A franchisee must get to know those who are making decisions about his/her future. If there is not a feeling of trust and confidence in the ability of those at the top to take the organization where it needs to go, then it is a marriage that is doomed to fail. You need to know and understand the strategic vision of the organization. You also need to know where their passion lies. If it’s not with the brand, then it will come through in their leadership. Passionate and smart people at the top should work as hard as you when it comes to making the business work.
  • They analyze their market in advance. A franchisor may help with site selection, demographic analysis, and real estate acquisition. However, it is the responsibility of the franchisee to decide whether or not a particular location is the right location. Know the competition, market receptiveness for your product or service, and how much advertising and marketing will be necessary to break through. Not all markets are the same and some will be easier than others to succeed in. Knowing this up front can be the difference between success and failure.

What Franchisees DON’T Do:

  •  They don’t only work in the business, but work on the business (E-Myth Revisited)
  • They don’t operate without a strategic growth plan that also incorporates actionable items to be completed within a specified timeframe
  • They don’t let the established systems and processes to become bastardized
  • They don’t let things slide. They know that accountability and execution are critical to business success.
  • They don’t ignore the numbers. Due diligence in financial management is as critical to success as execution. Knowing that the product, employee and rent costs are within specified limits is key to keeping them there.
  • They don’t stop marketing. Marketing can be expensive and it can feel as if it is not worth the investment. However, they also know that when you are out of sight you are also out of mind. There is a reason McDonald’s, Taco Bell and Apple continually market the way they do.
  • They don’t ever forget who the customer is and that if it wasn’t for the customer they wouldn’t be in business.
  • They don’t underestimate the value of hiring the right people and training them accordingly. They know that the right people can be a differentiator.
  • They don’t ignore culture. They know that a culture exists in every organization. They also know that they must develop that culture or someone else will. The right culture can bring out the best in people and lead to a highly disciplined and motivated team.
  • They don’t shy away from the tough decisions. Successful franchisees do what needs to be done, whether they like doing it or not. Accountability, adherence to systems, and spending what needs to be spent to survive are not always fun or easy. However, the successful franchisee knows that success hinges on the “how” of business. Execution is key to operational excellence and operational excellence is key to success.

Owning a business isn’t easy. But then again, neither is working for someone else. If you have a desire to be your own boss then franchising may be your ticket to professional, personal and financial freedom. To achieve those goals, you need to be clear about the fact that it will require a lot of hard work. However, the rewards of business ownership can greatly outweigh the risks.  The question is most likely not whether you can do it or not. The question is most likely whether you truly want to do what it will take to succeed. That, my friend, is a question only you can answer.

Thinking About Owning A Franchise? Do Your Due Diligence Before Committing

Owning your own business is a dream many people have. The freedom to be your own boss and to control your own destiny is a strong lure, especially in an ever-changing business environment where loyalty and commitment seem to be a thing of the past.

There are many reasons people decide to step out on their own and leave the employ of others. Some are following a dream, while others may be frustrated with the direction their career has taken them. No matter what the reason, franchise ownership may be one of the considerations people make when deciding to go it alone. Interestingly, the draw of a franchise, as opposed to starting from scratch, is that you don’t have to go it alone. A good franchise opportunity should be as close as possible to a turn key operation. And, if you pick the right franchise success should be all but guaranteed. That is as long as you are disciplined, do your due diligence and fact finding, and properly implement the established systems.

To Fail or Not to Fail

When a franchise fails it usually because the franchisee failed. Franchisees either failed to do their due diligence up front (which includes a professional review of the Franchise Disclosure Document), failed to properly implement the systems and processes that the franchisor has established, or they fail to attend to the factors that contribute to success, like local store marketing, customer experience, operational excellence, and attention to quality. These failures are many times blamed on the franchisor when in fact they are more appropriately placed at the feet of the franchisee.

Consider This…

If you are contemplating stepping out on your own and investing in a franchise, consider the following before you go all in. Remember, it’s better to go slow before you go fast and furious into franchise ownership. If you do slow it down, you may thank yourself later. If you don’t, you may hate yourself in the morning. Either way, going slowly through the process is almost never a bad idea.

10 Things You Need to Understand Before Signing on The Dotted Line

  1. Product Offering and the target customer: ask the franchisor to describe their products in detail, who they view as their target market, and what, if any, product offerings are in development.
  2. The “ideal” demographic: ask the franchisor to share the ideal demographics for a successful location. If they can’t give that to you then you should be concerned. If you still like the franchise, then do your own research and visit franchise locations in the region you are considering. Conduct interviews of owners and general managers so that you might uncover what the ideal demographic may be. If the franchisor does have the data, and they should, ask how they arrived at the data and what the regression analysis indicate.
  3. Development area demographics: Ask the franchisor if they will help you determine the demographics of the geographic area you are interested in and determine the size and density of the target population.
  4. Operating costs: ask the franchisor if they can help you determine the cost of rent, employees, and supplies/materials for the area you are considering and compare that with anticipated pricing for your product. Then, ask them if they have a pro forma so that you can try to determine margins using data for your area. No two areas are the same, even if they are only 30 minutes apart. Excessively high rent and employee costs can destroy a franchise. Then, go interview other franchisees and find out how they are performing. You need to confirm what you think the possibilities are. DO NOT let your emotions make this decision.
  5. Support: ask about all the services and support you will receive from the corporate office. Much of this information is contained in the Franchise Disclosure Document.  However, asking the right questions will provide greater detail and a better understanding. This will better prepare you for opening and prevent misunderstandings in the future.
  6. The best of the best: ask for a detailed description of the characteristics and behaviors of the most successful franchises. There are things that the best franchises religiously do that the less successful franchises do not. Find out what they are and then map a plan for making those characteristics a part of your franchise.
  7. 5-7 things: ask the franchisor what 5-7 things have been determined to be those things that result in increased revenue and customer satisfaction.  You may hear things like “engaging the customer when they walk through the door”, “offering to enroll customers in our rewards program”, or “addressing customers by name at checkout, which is gained from their credit card or through our rewards system”. Knowing what those 5-7 things are says a lot about the franchisor and how well they know their operations and customer.
  8. Marketing (yours and theirs) – ask them to explain what makes up corporate marketing and what makes up local marketing and what costs might be hidden. The two are not the same. Know where the money is spent and where you need to spend money locally. A satellite franchise may realize little to no corporate marketing until other locations are developed nearby. You need to know this up front.
  9. Their opinion: ask their opinion about where they would like to locate a franchise and why. Maybe you’ll find that their location is better than yours. It also tells you how much work they’ve done preparing for growth. It also says a lot about the direction they are heading.
  10. Strategic vision: find out the strategic vision of the corporation. Ask about their vision, corporate values, goals, growth plans, product development plans, and mission statement. Quality organizations will have a well thought and detailed strategy that maps out the direction of the organization. A vibrant corporate brand will only help make your local brand more attractive.

Know It All

You can’t learn everything you need to know in a few meetings. However, by asking the right questions you can learn a lot about the organization and what you can expect in the future. Remember, the benefit of owning a franchise is that someone else has figured out the success formula. While franchise ownership does not guarantee success, if you do your due diligence and implement their systems you should be better positioned than trying to go it alone. Never forget that your success or failure is directly tied to your willingness do what needs to be done to make it happen. Due diligence is the first step in that process.

Randy Stepp is a business and franchise development consultant who’s purpose is to help business owners realize their dreams of independence and freedom.

Follow or Connect with Randy on LinkedIn at https://www.linkedin.com/in/randystepp

Evaluating Investment Opportunities

As Romeo’s Pizza and Pizzafire have been accelerating in growth we have had the opportunity to structure alternative investments for a number of individuals. The appetite of the investment can be drilled down to 3 points.  The answer to these three points are a necessity when considering the investment.

1. Evaluating the Leadership Team

“Leadership is the capacity to translate vision into reality.” – Warren Bennis

Does the Leadership team have the capacity to pull this off? The only way to evaluate the leadership team is to ask them questions.

Questions to consider:

  • Who are the founders and key team members?
  • What relevant experience does the team have?
  • What key additions to the team are needed?
  • Why is the team uniquely capable to execute the company’s business plan?
  • What motivates the founders?

 

2. Evaluating the Product or Service

“The more alike two products are, the more important their differences become.” Regis McKenna

Will there be a demand for this product or service today and in the future?

Questions to consider:

  • Why do customers care about your product or service?
  • What are the major milestones thus far?
  • What are the key differentiated features of your product or service?
  • What have you learned from early versions of the product or service?
  • Provide an explanation of the product or service.
  • What are the two or three key features you plan to add?
  • How will the company market its product or service?

 

 3. Risk and Reward

“If you risk nothing, then you risk everything.” — Geena Davis

Does the risk of the proposed investment match the reward?

Questions to consider:

  • What are the company’s three-year projections?
  • What are the key assumptions underlying your projections?
  • How much equity and debt has the company raised; what is the capitalization structure?
  • What future equity or debt financing will be necessary?
  • How much of a stock option pool is being set aside for employees?
  • What are your unit economics?
  • What are the factors that limit faster growth?
  • What are the key metrics that the management team focuses on?
  • How much is being raised in this round?
  • Will existing investors participate in the round?
  • What is the planned use of proceeds from this round?
  • What milestones will the financing get you to?
  • What is the likely exit – IPO or M&A?
  • When do you see the exit happening?
  • Who will be the likely acquirers?
  • How will valuation of an exit be determined given market comparable?
  • What structure is the payback for investors?

Investing in a company can be a tremendously exciting time for both the investor and growing business. The prospective investor needs to keep a few factors in mind when considering the investment. Can the leadership team pull this off? Will this product or service be demanded today and in the future? Does the risk equal the reward?

Happy investing!

Here are some great links on investing:

http://www.investmentnews.com/article/20140527/BLOG09/140529947/4-considerations-when-evaluating-alts

http://www.forbes.com/sites/allbusiness/2013/06/10/65-questions-venture-capitalists-will-ask-startups/

________________

Ryan Rao is a Principal of Apex Franchise Development Group and is a franchise development expert who has grown multiple franchise based businesses into national and international brands. Franchising has allowed him to help individuals realize their dreams of business ownership, while permitting them to experience the independence, flexibility, and freedom that comes with being a business owner. He also serves as a franchise consultant, and is a personal growth advocate.

Follow or Connect with Ryan on LinkedIn at https://www.linkedin.com/in/ryan-rao/

Disciplined Innovation

How creative is your company? A 2010 study of 1,500 CEO’s indicated that leaders rank creativity as the No. 1 leadership attribute needed for prosperity. It’s the one thing that can’t be outsourced; the one thing that’s the lifeblood of sustainable competitive advantage. Hyper-growth companies such as Zappos, Groupon, and Uber credit a culture of innovation as their primary driver of success. They take a deliberate approach to fostering creativity at all levels of their organizations, and deploy creative thinking to attack problems big and small. (Inc)

Check out these 7 ways to breed creativity

1. Question

“He who has a why to live for can bear almost any how.” -Friedrich Nietzsche

Breed a culture of asking “Why”? “Why” does your organization exist? “Why” do you do it this way? Create a “What if…” board in your workplace, where employees can pose outrageous “What if” questions.

2. Purpose

“Creativity dies in an undisciplined environment.” – James C. Collins

Every task must have a clear purpose and expected outcome. Purpose magnetizes passion throughout the workplace.  Steve Jobs purpose was to put a computer in every home. Your specific purpose must be your own, but the bigger and more important your purpose is, the more passion it has the potential to create within your team. Passion breeds creativity.

3. Empower

“Happiness is not the absence of problems, it’s the ability to deal with them.”  – Steve Maroboli

According to a 2008 study by Harvard University, there is a direct correlation between people who are empowered to make their own decisions, and their creative output. An employee who has to run every detail by for approval will quickly become numb to the creative process.

4. Expression

“Where all think alike there is little danger of innovation.” – Edward Abbey

Creativity is self-expression. Imagine a typical manager hovering over Picasso, barking orders, tapping his watch, questioning the return on investment, and demanding a full report on why he chose a certain brushstroke technique. Picasso’s creativity would shrivel.

5. Fearless

“The essential part of creativity is not being afraid to fail.” – Edwin H. Lane

From Benjamin Franklin to Henry Ford nearly every breakthrough innovation in history came after countless setbacks, mistakes, and failures. The great innovators and achievers weren’t necessarily smarter or inherently more talented. They simply released their fear of failure and kept trying. They didn’t let setbacks or misfires extinguish their curiosity and imagination. Employees should not fear sharing their thoughts. Embrace their ideas and the idea process. It should be accepted to say what you think, even if it is controversial. “We tried that; it doesn’t work” is not an acceptable response to brainstorming sessions.

6. Act Small

“If you want something new, you have to stop doing something old” – Peter F. Drucker

Smaller companies tend to be more curious and growth oriented. They have a stronger sense of urgency and are not afraid to embrace change.  In contrast, larger organizations often exist to protect previous ideas rather than to create new ones.

7. Nurse

“To have a great idea, have a lot of them.” – Thomas Edison

Innovation often starts with one idea and comes to life being something completely different. Create mediums to nurse ideas to life through the input of the team. Start an idea whiteboard and collaborate.

Here are some great links on innovation:

http://www.inc.com/articles/201106/josh-linkner-7-steps-to-a-culture-of-innovation.html

http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action?language=en

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Ryan Rao is a Principal of Apex Franchise Development Group and is a franchise development expert who has grown multiple franchise based businesses into national and international brands. Franchising has allowed him to help individuals realize their dreams of business ownership, while permitting them to experience the independence, flexibility, and freedom that comes with being a business owner. He also serves as a franchise consultant, and is a personal growth advocate.

Follow or Connect with Ryan on LinkedIn at https://www.linkedin.com/in/ryan-rao/

I want to own a business; What are my options?

Three different roads to business ownership are possible each with challenges and opportunities.

1. Startup

Attempting to start a business from zero is the riskiest of the three but in certain scenarios it offers the highest upside. Having an idea is just the start. The business will need to consider corporate and production processes, accounting standards, business advisors, marketing, and REVENUE generation. How about the fact that a staggering 95 percent of small business will close their doors before they hit their fifth year of operation? If you are contemplating a startup seek out advisors who have been there and done it. If you are considering a startup, know that you must be agile and willing to embrace the ability to adapt.

Keys to success for a startup

  • Find a mentor
  • Have a strong personal network
  • Raise sufficient capital
  • Solve a problem, fill a need
  • Be the expert
  • Can you save someone money, can you make someone money, can your product or service make their life easier?
  • Identify your customer needs and wants and the value they associate with them
  • Value Proposition – Differentiate your offering based on unmet needs within the market place
  • Establish go to market strategy
  • Build processes
  • Be consistent
  • Sell absolutely everyday
  • Communicate any and all directions in writing
  • Surround yourself with people smarter than you
  • Track gross and net profits monthly

 

2. Buy an existing business

Generically a business acquisition is a greater financial cost in the short term than a startup. Because of the increased cost; risk is in theory mitigated. Depending on the sector, business valuations range. Due diligence is key. Mindset of the takeover must be larger than one person. The new owner has to communicate with each and every person in the company. A great majority of your time should be spent conducting a human capital audit by mentoring and coaching current employees. The major challenges in buying an existing business are getting the staff to buy in, shifting the company culture, improving communication gaps, and dealing with the resistance to change.

Keys to success

  • Due Diligence – Hire a professional if you are not an expert in valuing a business opportunity
  • Release control to capable supervisors and lead them
  • Create an advanced financial reporting and projection system
  • Instill a team-based mindset
  • Overhaul the business model
  • Strengthen all communication
  • Identify the strength and value of the existing brand/name
  • Speak to current clients/customers to gain an understanding of why they choose to do business with your target. Ask them, what needs to be improved and why? What are they best at and Why? What is that important to them?
  • Speak to current employees. Ask them why they choose to work there? Ask employees what can be improved and what impact would that have on their performance and for the customers of the business?
  • Develop an actionable strategic plan that incorporates all you learned while exercising your due diligence to acquire the business

 

3. Buy a franchise

Owning a franchise allows you to go into business for yourself, but not by yourself. A franchisor provides franchisees with a certain level of independence where they can operate their business. A franchise provides an established product or service which may already enjoy widespread brand-name recognition. This gives the franchisee the benefits of a pre-sold customer base which would ordinarily takes years to establish. A franchise increases your chances of business success because you are plugging into proven products, processes, and methods. Franchisees are required to operate their businesses according to the procedures and restrictions set forth by the franchisor in the franchise agreement. In exchange for the turn key opportunity most franchise systems require an initial franchise fee and ongoing royalty. Since the royalty is directly correlated to sales, franchisors have skin in the game to help the business run at optimal levels.

Keys to success

  • Follow the process and systems set forth
  • Believe in proven blueprint that others are successfully utilizing to achieve their dreams
  • Understand levels of support from franchisor
  • Interview successful franchises
  • Have clear expectations for the financial performance of the franchise
  • Community involvement
  • Be passionate about the service or product you will be offering to the marketplace
  • Embrace the franchise model

 

All of the above offer the freedoms of being your own boss. Which avenue do you want to pursue?

Checkout the census data here http://www.businessknowhow.com/startup/business-failure.htm

and here http://smallbiztrends.com/2012/12/start-up-failure-rates-the-definitive-numbers.html

 

Checkout these articles http://www.entrepreneur.com/article/227394

http://www.statisticbrain.com/startup-failure-by-industry/

http://www.businessknowhow.com/startup/business-failure.htm

http://www.franchise.org/what-are-the-advantages-and-disadvantages-of-owning-a-franchise

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Ryan Rao is a Principal of Apex Franchise Development Group and is a franchise development expert who has grown multiple franchise based businesses into national and international brands. Franchising has allowed him to help individuals realize their dreams of business ownership, while permitting them to experience the independence, flexibility, and freedom that comes with being a business owner. He also serves as a franchise consultant, and is a personal growth advocate.

Follow or Connect with Ryan on LinkedIn at https://www.linkedin.com/in/ryan-rao/