Trending Now

GT Podcast – Episode 129 – The Port Authority of NY…

New Articles

What Is It Like Owning a Franchise?

franchise
Archives, Global Trade Daily, Special Reports

What Is It Like Owning a Franchise?

Leave a comment

Are you hoping to be a business owner one day? Do you want to take charge of your financial future by becoming an entrepreneur, working for yourself and not for others?

There are many ways of making your entrepreneurial dreams come true. In the 21st century, starting a business is more accessible than at any other point in history.

But not all business paths are created equal. Many require long, difficult journeys to get from idea to startup to the first dollar in the bank. Owning a franchise, on the other hand, offers a very clear path forward. With a franchise, you are leveraging the assets of an existing business to take a lot of the guesswork out.

It’s the fast track to entrepreneurial success and should be a top consideration when you begin your own journey. Keep reading to learn what running a franchise is actually like.

Franchise Business Definition

A franchise is another branch of an existing business. It’s when you buy the right to use a particular business’s name, trademarks, branding, knowledge, and products.

Rather than having to build your own brand, developing your own product or service, you can use someone else’s. For example, you can become one of the 38,000 people who own a Mcdonald’s franchise worldwide.

When you do this, you pay for the right to sell McDonald’s products, using their systems and processes, their equipment, and their brand. This may be a much better option than starting a brand new burger joint with no reputation.

When you do this, you have zero customers. You have to build a brand reputation and a following from scratch. While it can work, it takes a long time.

With a franchise, on the other hand, you are leveraging the brand built by others, often over decades. When you start a franchise, you have customers from day one.

Owning a Franchise

Starting a franchise is a great option for first-time business owners. As a franchisee, you are going to get a ton of help. The franchisor won’t leave you on your own.

In fact, they’ve built out an entire program that will guide you to success as a franchise owner. The company wants you to be successful. The more successful you are, the more successful the franchisor is, too.

You get to use systems and processes developed by the original company. That means processes for hiring and managing staff. It also means processes and procedures for everything serving customers to cleaning, opening the shop to accounting, and pretty much anything else.

As a franchise owner, you have the freedom to manage the business as you see fit. However, you are in effect operating someone else’s business. You own it, but you have to play by their rules. You serve their products, wearing their uniforms.

A portion of your revenue goes back to the parent company. But it’s a small price to pay for the priceless education you receive and the quick profits you can expect to make.

Starting a Franchise

To start a franchise, you’re going to need some capital. Starting a new location can be quite expensive, though you may only need a portion of that yourself.

The parent company may cover half or more of the startup costs on your behalf. Generally, you can expect to need between 25% and 40% of the total startup cost as a down payment.

On top of that, you may need to take a franchisee course before you are approved to own and operate a franchise. This can take some time but is always worth the effort.

Is a Franchise Right for You?

Many people have dreams of owning their own company, under their own brand, serving customers in their own way. It’s an extremely rewarding path to take, but it’s one that is long and difficult.

Starting a business from scratch is much easier when you already have experience managing a business. As a result, it’s often best to start your entrepreneurial career by starting a franchise.

It’s kind of like business school, but instead of walking away with a degree at the end of it, you have a fully functional, cash-flowing business that you can keep or sell.

It’s an education that actually pays you, rather than the other way around. Plus, after successfully owning and operating a franchise, you will be in a much better position to start your own company one day.

You may have the cash needed to start your business without a loan. Or, since you have experience running a business, you’ll be more qualified to get a loan or investment in your new endeavors.

So whether you eventually sell your franchise to another aspiring entrepreneur, or keep it and pay a manager to handle the operations for you, owning a franchise is a good idea for most would-be business owners.

Best Franchises to Consider

The best thing about owning a franchise is that there are so many options available. When people hear about franchising, most people think about a restaurant franchise.

That’s just one example. If you like the idea of working in the restaurant business, franchises are a solid option. But there is so much more opportunity available.

There are retail stores like 7-11 or Ace Hardware. There are hotel franchise organizations like Marriott. There are real estate offices, accounting services, fitness centers, salons, carpet cleaning services, and many other franchise examples.

Many franchises will require a large number of startup funds, as you’ll need to buy or rent a building and outfit it with all of the equipment necessary to run a brick-and-mortar location. However, there are service-based franchises you could start for far less upfront.

With a service-based franchise, you would only need a vehicle and some basic equipment. That means you have a much lower loan and can start meaning a profit much sooner than with brick and mortar franchises.

Check out this article for more information on affordable franchises to consider. After all, the lower your startup costs, the sooner you can actually get started and start building the life you dream of.

Leverage the Success of Others

Owning a franchise is a smart move. It makes business ownership much more attainable, and it makes success much more likely. It allows you to leverage the success of others while you build an asset that you own.

Looking for other articles like this? Visit our blog today to keep reading.

profitable
Archives, Executive Education, Global Trade Daily

How to Have a Profitable Business in Any Economy

Leave a comment

People start and buy businesses for many different reasons. Some people do it as an extension of their passion for a certain thing such as flowers, woodworking, machinery or serving people. Some people do it for the thrill of winning, but ultimately everyone who goes into business does it to make money.

There are thousands of books that have been written about business telling you what to do and what not to do, but ultimately making money in business is not that difficult. Listed below are five fundamentals of what it takes to have a profitable business.

Income – expenses = profit. Income is determined by how much money is generated by the business. Expenses are what is needed to operate the business. Profit is what is left over after deducting the expenses from the income. You can always increase your income, but you can only reduce your expenses so far before you don’t have enough of the basics to keep the business operating.

Sales. A lot of people don’t like to hear the word sales, because they don’t want to be in sales or affiliated with sales, but without sales there is no business. Sales is the business. The major goal of every business is to increase sales, because without sales there is no income.

Sales combined with income and expenses applies to all industries. It doesn’t matter if you are operating an exercise/yoga clinic or a computer chip manufacturer, the formula is the same. Even churches have a sales department to entice their congregation to give more. Sales is what makes the world go around.

The formula shapes your business model. Over time, with the practicing and perfecting of the sales aspect along with the income – expenses = profit formula, you will develop a business model that works. This is called a profitable business.

Make the model scalable. To add more profits, hopefully the business model you have created is scalable and you can duplicate the business model either through franchising, dealers representing your business, or the opening of additional facilities using the same model you created and perfected.

What I have explained in five steps is very simplistic on how to have a profitable business anywhere. This formula is applicable in any geographic area and to any business. Anything else beyond the sales and income – expenses = profit model is called an excuse. I was taught early on in my business career that “You can make money or you can make excuses, but you can’t make both.”

_____________________________________________________________

Terry Monroe (www.terrymonroe.com) is the president and founder of American Business Brokers & Advisors. The author of four books, he most recently published Hidden Wealth: The Secret to Getting Top Dollar for Your Business, with ForbesBooks. Monroe is a professional intermediary, consultant, and market maker for privately-held companies and has been involved in the sale of more than 800 businesses. In his 35-plus years of service, he has owned and operated more than 40 different businesses. At American Business Brokers & Advisors, he serves as a consultant for business buyers and sellers throughout the nation. As an expert source he has been written about and featured in The Wall Street Journal, Entrepreneur magazine, CNN Money, USA Today, CEOWORLD, and Forbes.

contracts
Archives, Global Trade Daily, Software, Special Reports

Don’t Get Caught Off Guard by Expired Contracts

Leave a comment

Contracts are key to mitigate risk, secure discounts, and acquire services. Your procurement teams work hard to negotiate contracts that enforce the most beneficial terms for your company, and your AP team takes careful measures to ensure each invoice is paid on time. However, one section of the contract that’s often overlooked by finance teams is the expiration date. Surely your supplier will let you know when it’s time to renegotiate, and someone’s tracking it somewhere, right?

The truth is, in many organizations, the expiration date of a contract is often completely unknown. An expired contract can have serious ramifications to your business functions and could cost you a lot if you’re unaware of its pending arrival. Below are a few scenarios that can happen if you’re caught off guard by expired contracts.

Where are our contractors?

If you fall out of contract with your contractors, the first thing you might notice is that they simply don’t show up. This may not be a huge issue on temporary projects such as landscaping, but if you’re relying on them for long-term IT support, this could be a big issue: A few weeks of contract renegotiations can slow down your business significantly. Staying ahead of contract expirations allows you to renegotiate terms before they expire, to ensure there aren’t any gaps or delays in your projects.

Hmm, this seems more expensive than usual

If your supplier contracts expire, they’re no longer obligated to honor the price you negotiated. They can suddenly begin to charge their market rate, which is likely substantially higher than the contracted rate. This would be an unwelcome surprise for any finance team, especially if it’s after you’ve already purchased the goods (and perhaps even used them as components within your product). After a contract is expired, you lose all your leverage to find an alternate supplier, and the cost of your goods can rise exponentially. Avoid this supply chain nightmare by knowing in advance if you need to renegotiate your prices.

I can’t afford my new subscription price, but can I afford not to have it?

Contracts often include a clause that limits cost increases upon renewal, typically around 3-5% or covers the cost of inflation. However, if the contract expires, this clause will no longer be honored. Let’s say your business is using an ERP or CRM software on a six-year contract. During that timeframe, the software company raised its annual fee from $400K to $3.5M. Unfortunately for your company, you didn’t renegotiate the contract before expiration, and you now have zero leverage to negotiate a better price. Even worse, the cost of switching may be equally high, so it doesn’t make sense to look for alternative software. Your company has no choice but to pony up the money in order to keep your business functioning on all cylinders.

The above scenarios would be tricky for any business to avoid. With so many contracts with so many different suppliers, it can seem impossible to be aware of each upcoming expiration date. However, AppZen’s Contract Audit notifies you of all of your upcoming expirations (and coupled with AP Audit, you can also be confident that your contract terms are reflected on each invoice too). Thanks to AppZen, you’ll be notified with enough time required to make a decision on alternative suppliers, saving you costly mistakes, and keeping your business and supply chain running at 100% efficiency.

______________________________________________________________________

David Wishinsky is a Senior Product Marketing Manager at AppZen.

work
Archives, Commentary, Global Trade Daily

How An Integrated Life, Not A Balanced One, Is Key To Work Satisfaction.

Leave a comment
In many businesses, a wide gulf exists between ownership and the workforce, a disconnect that can leave employees feeling undervalued and wanting to leave.
The high cost of replacing them means it’s important to find ways to retain the best performers, and studies show that transparency and education from the top can be a solution, boosting employee engagement and motivation.
And one way to achieve that transparency is to open the company’s financial books to employees and teach them the business, says Rich Armstrong (www.greatgame.com), a business coach, president of The Great Game of Business Inc., and co-author with Steve Baker of GET IN THE GAME: How To Create Rapid Financial Results And Lasting Cultural Change.
“Too often in business, we fail to show the players on our own team the big picture – the overall score of the game,” Armstrong says. “We tend to try to manage from the sidelines, focusing on individual performance. Why not teach them what winning means in business?
“But opening the books may be the first time in the employees’ lives they feel they’re being treated as adults. This type of financial transparency builds trust and mutual respect. Teaching employees the business involves them in making a difference, so as a business leader, you need to get comfortable with opening things up.”
Many business owners are hesitant to open the books to their employees. One of their concerns is giving employees access to salary information, but that isn’t advisable, says Baker, who is vice president of The Great Game of Business.
“Opening your books does not mean sharing every detail,” Baker says. “On the other hand, if people see how much the company is making and that makes them want more, that’s what you want as a business owner.”
Armstrong and Baker break down how to open the books for employees and the benefits of doing so:
Bridge the gap between perception and reality. The perception among employees that the owner is focused on self wealth can be changed, Armstrong says, by teaching employees how hard it is for most companies to make money. “Many people would be surprised to know how little even large companies make in profit from every dollar of sales,” Armstrong says. “Research shows the median bottom line in companies in 212 industries across the U.S. is 6.5 cents on every dollar of sales. But the average employee thinks their company makes six times that.”
Break it down for them. “Once you show your team how hard it is to make money, sketch out a simplified income statement for your business, showing your revenue streams and all your expenses,” Baker says. “Draw a dollar bill and show them how little the company keeps out of every dollar.”
Bring the marketplace to your people. An owner can provide clearer perspective to the employees by sharing how and what other companies in the industry are doing. “Do your homework,” Armstrong says, “and find out about your competition. If your employees know how they stack up against the field, most will respond to your appeal to move the needle. Your transparency has made them feel valued.”
Make teaching financials interesting. “The strategy is to create a business of business people,” Baker says. “But remember, you’re trying to educate your people about your business, not create a bunch of CPAs. Share, teach and involve them in the numbers they can impact. Your people rarely need to know about debits and credits or how to do an adjusting entry. But they may very well need to know how production efficiency is calculated and why receivable days matter.
Teaching the business helps everybody begin to understand what they can do, both individually and as a team, to influence bottom line financial results.”
“The purpose of opening the books is to boost the employees’ confidence in understanding the numbers and in the company itself,” Armstrong says. “Then and only then will they begin to make a connection to the numbers that measure their performance and talk intelligently about improving the business.”
_____________________________________________________________
About Rich Armstrong
Rich Armstrong (www.greatgame.com) is the president of The Great Game of Business Inc., and co-author, with Steve Baker, of GET IN THE GAME: How To Create Rapid Financial Results And Lasting Cultural Change. This book is the how-to application of Jack Stack’s 1992 bestseller, The Great Game of Business. Armstrong and Baker co-authored the update of Stack’s book in The Great Game of Business – 20th Anniversary Edition. Armstrong has nearly 30 years of experience in improving business performance and employee engagement through the practice of open-book management and employee ownership. He serves as a business coach and senior executive at SRC Holdings Corporation, one of America’s top 100 largest majority employee-owned companies. He’s also a board member for the National Center for Employee Ownership (NCEO).
About Steve Baker
Steve Baker (www.greatgame.com) is the vice president of The Great Game of Business Inc., and is a top-rated, sought-after speaker and coach on the subjects of open-book management, strategy, and execution, leadership, and employee engagement. Baker is a career marketing and branding professional and an award-winning artist.
strategies
Archives, Commentary, Global Trade Daily

Five Strategies That Can Take Your Business From Pretender To Contender

Leave a comment

“By failing to prepare, you are preparing to fail.”

That quote, attributed to Benjamin Franklin, summarizes why some businesses and other endeavors fall short and end up in the scrap heap of lost dreams.

The importance of preparation for success in business is much like it is for professional sports teams trying to win a championship, says Paul Trapp (www.eventprep.com), founding owner/CEO of EventPrep, Inc., a full-service meeting planning and management company, and co-author with Stephen Davis of Prep for Success: The Entrepreneur’s Guide to Achieving Your Dreams.

“Every single significant opportunity in life is a Super Bowl if you really want to be successful,” Trapp says. “The New England Patriots frequently reach the Super Bowl, but they don’t get there if they don’t practice with purpose every week, watch countless hours of video, and rise above the inevitable pain and struggles that come with high-level competition.

“Being prepared for every situation along the way leads to earning their biggest opportunity, and it’s the same way for a business looking for big opportunities to grow. The key to mastering the art of preparation is constant practice.”

Trapp and Davis offer five strategies for businesses to take their preparation to the next level:

Become a disruptor. “You want your business to stand out from the competition,” Trapp says. “To do that, ask yourself, ‘How can my company disrupt the industry? How do we position ourselves in the marketplace so that people will go out of their way to do business with us?’ ”

Attract the right talent. Picking the right person – one who can be a long-term employee vital to the company’s success – should be a slow and strategic process. ”For a business owner, hiring people is very much like investing,” says Davis, who is EventPrep’s founding owner/president/COO. “Before you offer someone a job, do research, check references, and ask many questions. Do people you are considering have the attitude and motivation to succeed? Would they be a good fit with your existing culture?”

Establish a winning culture. “A business culture is created at the top and cascades downward,” Davis says. “It takes great effort and dedication to build a winning business culture where everyone feels valued as contributors. It goes beyond the professional relationship to the personal – showing compassion for employees in times of need, and recognizing exceptional efforts with tangible rewards.”

Befriend Murphy. As in Murphy’s Law – ”Anything that can go wrong, will go wrong.” Although all businesses encounter problems in a variety of ways, Trapp says, a strong organization can properly prepare in a way to withstand them and solve them quickly. “Because Murphy is going to show up in any number of forms,” Trapp says, “when preparing to do anything, there has to be a list of solutions in place before a problem ever happens.”

Recognize and seize opportunities. “The key to seizing an opportunity is identifying a need greater than your own – that of your customer,” Davis says. “Imagine you meet someone who can help you solve a need because he or she has the tools and experience to give you what you really need. Think about what real estate agents do for home buyers. They ask specific questions about what the clients are looking for, relate to their excitement about finding the right kind of home, and create a vision of that.”

“Preparedness is the key in any and all situations,” Trapp says. “The only way you learn and grow as an individual, and as a business, is to perfect your unique abilities and a team’s winning strategies through repetition.”

__________________________________________________________

Paul Trapp is a founding owner/CEO of EventPrep, Inc. (www.eventprep.com), a full-service meeting planning and management company that supports 16 franchises across the U.S. He is co-author of the book Prep for Success: The Entrepreneur’s Guide to Achieving Your Dreams. Trapp is a former senior military leader who served as chief of recruiting for the Army National Guard and holds over 30 years of experience in contract management, event planning, and organizing conferences, seminars, and meetings.

Stephen Davis is a founding owner/president/COO of EventPrep, Inc., and co-author of  Prep for Success: The Entrepreneur’s Guide to Achieving Your Dreams. Davis is a multi-state operations director who focuses on conference development, implementation, management, and conference design. He currently serves as a chief warrant officer and CID special agent in the Army Reserves. Davis deployed twice in support of the global war on terrorism. In 2016, Davis and Paul Trapp launched  Federal Conference, Inc., which provided professional event planning and management services to the government and commercial marketplaces. Federal Conference, Inc., twice was an Inc. 500 award recipient and executes over 3,000 events annually around the world.

business
Archives, Commentary, Global Trade Daily

4 Tips For Steering Your Business Through Tough Times

Leave a comment

Good times come with this certainty: They never last.

For businesses, that means formidable challenges (a weak economy, new competition, a sea change in the marketplace) are always just around the corner, and unprepared business leaders face the potential for disaster.

“You don’t have the luxury of resting on your laurels,” says Alyssa Rapp (www.alyssarapp.com), CEO of Surgical Solutions and author of Leadership & Life Hacks: Insights from a Mom, Wife, Entrepreneur & Executive.

“You have to keep battling, innovating, out-innovating, and outworking your competition.”

She knows something about that. From 2005 to 2015, Rapp served as the founder and CEO of Bottlenotes Inc., charting a course for the company through the turbulent years of the Great Recession. During her time at Bottlenotes, Rapp was named one of Inc. Magazine’s “30 Under 30” coolest entrepreneurs in the U.S. Starting in 2015, she served as the managing partner at AJR Ventures, which advised privately-held companies and private equity firms on their digital-marketing strategies.

Rapp offers four tips for helping business leaders meet the toughest of times with a resolute attitude:

Acknowledge fear, and move through it. Fear gets a bad rap, but it’s there for a reason: to protect you from something. “Just like standing on a balance beam is scary because your life or limbs are at risk, so, too, is making business decisions that carry huge risks,” says Rapp, a former competitive gymnast who knows something about balance beams. Your job is to acknowledge the fear – to take note of its presence – and then push through it. “Fear is a normal human response,” she says. “The trick is in not letting it dominate your psyche.”

Commit to finishing what you start. You have to commit before you even begin. “If you start anything knowing you probably won’t succeed, then you won’t,” Rapp says. “You’re setting yourself up for failure. You must show up with full commitment, having faith, true grit, and belief in yourself.”

Know that all great ideas start with ‘what if.’ Never be afraid to ask what if, over and over, until you find a solution, Rapp says. She points out that most of the best entrepreneurial innovation in the United States over the past 20 years has been born out of Silicon Valley, precisely because of the constant willingness to ask and re-ask this simple question. “Some people’s responses to challenges or obstacles are to stop asking questions,” Rapp says. “If you want to solve a problem, you have to open yourself up to the possibility that change is inevitable, and reframing the problem will present an otherwise undiscovered solution.”

Remember that you have to be present to win. You can’t win a race if you’re not competing. “So before you do anything else – before you commit to finishing what you start, before you acknowledge your fear and move through it – you have to show up,” Rapp says. “Remember that saying that 80 percent of success is showing up? There’s truth to that because showing up matters.”

It’s inevitable that, regardless of how well you think you’ve planned, life will throw you curveballs, Rapp says.

“They will come at you in every area, every industry, every walk of life,” she says. “I’ve faced them as a mom, wife, entrepreneur, executive, friend – you name it. But I don’t run from them. I’ve learned to apply my brother’s advice: ‘The only way out is through.’ The truth is, I love curveballs because each one comes with a question: What are you going to do about it?”

_______________________________________________________

Alyssa Rapp (www.alyssarapp.com), author of Leadership & Life Hacks: Insights from a Mom, Wife, Entrepreneur & Executive, has been CEO of Surgical Solutions since 2018. Previously, from 2015 to 2017, she advised startups and private equity-backed companies through AJR Ventures. Prior to that, Rapp ran an e-commerce business called Bottlenotes. She has been named one of Crain’s Chicago’s “Notable Women in Health Care.” Rapp also teaches at Stanford Business School and has recently been named Adjunct Professor of Entrepreneurship at the University of Chicago’s Booth Business School.