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Keep Your Job Or Buy A Franchise?

Bigg Challenge
Ellen e-mailed us because she and her husband are considering buying a franchise. Currently, she’s the #2 executive at a small business she’s worked at for years. She has two questions:

  • What franchise should she buy?
  • Will it pay off within ten years, because she plans to retire then?

Bigg Advice
Obviously, this is a very personal decision, so only you can decide what franchise to buy. We can, however, give you some guidelines.

What’s your expertise? What are your interests? Where’s the opportunity? Match these up when looking for your franchise.

How to find your franchise

Check out How To Buy A Franchise to learn more about the International Franchise Association. This industry group also provides some fantastic resources for people like you. In the article, you’ll see our review of their exhaustive, step-by-step guide to buying a franchise. The only thing we don’t like about it is that we didn’t write it!

They also have a listing of franchises, but in our opinion, it’s not as user-friendly as the next great resource.

You’ve probably heard of the Fortune 500. Entrepreneur publishes a similar list called the Franchise 500 every year. You can look up franchises by category – restaurants, business services, and just about any other category you can imagine.

They also have lists of the top new franchises, the lowest cost franchises, top home-based franchises, fastest growing franchises, and more. We definitely recommend that you check it out.

Making it pay
Buying a franchise, as with any business, comes with uncertainty. You have to take chances to succeed. However, you can and should reduce your risk to a level you can tolerate. You’ve heard us say this before – successful entrepreneurs are very adept at that.

Use the resources we mentioned above. Do your homework. Build your projections, but remember they are just SWAG.

SWAG, in this sense, has nothing to do with the Oscar presenters! It is an acronym for scientific, wild-assed guesses! So make sure you build some “fudge” into your guesstimates.

Is there another option?
You’ve painted an either / or picture – you either keep your job or you buy a franchise. We wonder if there are other alternatives.

You mentioned your husband, but we don’t really know what his situation is. Could he run the business?

You could also hire someone to run the franchise for you. Find a way to align their interest with yours. This could range from sharing profits to an actual ownership stake.

Obviously, if you choose this last option, you’ll have to accept a lower upside. However, your downside is a lot less, too.

If either of these works, you can keep your job AND buy a franchise!

Thanks, Ellen for sharing your bigg challenge! We wish you bigg success, whatever you decide!

What’s your bigg challenge? E-mail it to us at bigginfo@biggsuccess.com!

Our bigg quote today is over 2,000 years old. Seneca, the Roman philosopher, said:

“It's not because things are difficult that we dare not venture.
It's because we dare not venture that they are difficult.”

You have to look at the downside, but if you spend too much time focusing on that, you’ll never enjoy the upside.

Next time, we’ll discuss a recent study that shows that happiness is overrated. Until then, here’s to your bigg success!

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Start a Franchise or Business to Create Passive Income 


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Hot Businesses in 2009

By Bigg Success Staff
12-17-08

2009_hot

It’s not easy to succeed in your own business even in good times. So why would anyone consider starting a business now?

You might be surprised to know that many people think it is a good idea. They learn they can’t easily replace the income earned from a lost job and decide to try their hand at self-employment. In addition, after losing a job, a person might want to feel a stronger sense of control over his or her own life. Being your own boss may be the answer.

Whether you’re considering starting your first business or adding to your empire, it pays to think about what will be hot in the near future. Here are our picks for the best businesses to be involved in for 2009:

Repairs

Consumers and businesses are expected to cut back on their major purchases in 2009. So rather than replace their old do-hickey, they will repair that old do-hickey. This will create tremendous opportunities for repair businesses.

As an example, shoe repair shops are reporting incredible demand. This is a highly fragmented industry with lots of possibilities. How about a service that picks up and delivers shoes that need to be repaired? A good place to start your investigation would be the Shoe Service Institute of America

Reports are that more people are staying home more often. So home repairs of any kind should do well in the coming year since people will be home to see, hear, or smell the problems they may not notice in good times. For example, handyman services were booming even before the recent financial storm. They are expected to continue to thrive in the current economy.

These are just two examples of repair businesses that are likely to thrive in 2009. It is impossible to list all of the possibilities. So think about your own repair skills or find a partner who can do the repairs while you run the business. Then research the industry to see if the service you’re thinking about is experiencing growth right now.

Used

Consumers and businesses are also expected to purchase “used” more often in 2009. In fact, used may become chic in a world where frugality is a status symbol. So look for opportunities in industries that offer lower-priced second-hand products rather than something new.

If you have a flair for fashion, consider starting a resale clothing business. There are many possibilities even within this category. In most cases, these businesses are racking up sales almost as fast as they can get clothes on the rack. 

Beyond clothes, there are many more businesses that sell second-hand items that are reporting boom times. From books to office furniture, if there’s been demand for new products in the past, there is probably demand for used items now.

Think about what you like to buy and then do some research to see where it’s being offered second-hand. Don’t be discouraged if you see some competition. Instead, think about what you could do differently (and better).

Seniors

The baby boom is starting to retire. This will create demands for products and services for seniors like never seen before. Many of these businesses will thrive in spite of economic conditions.

Start a senior service business to and help seniors do things that they don’t know how to do, don’t want to do, or can’t do. There are a number of ways to service this large and growing market including starting a(n):

  • adult day-care center
  • relocation service
  • home health-care service
  • concierge service

You could also think about combining opportunities. By this we mean, you could target seniors with your new repair business or think about used items that would be useful to seniors.

Free agency

Here’s something to ponder – if you have a job, you essentially have one customer. What kind of security does that offer? We think it’s possible to have freedom with security.

The overwhelming majority of small businesses are micro-businesses, often consisting of a single person. We think more people will continue jumping on this free agency bandwagon in the years ahead.

So instead of going for a new job, why not try to land two customers that pay you what you would expect to earn from a single job? Take that special skill you have and market yourself as a specialist rather than an employee.

Like any business, it’s usually not easy to get started. While start-up costs can be minimal, you still need the financial resources to weather times with little income or you can start part-time. However, many people find the lifestyle of a free agent very rewarding.

Consider a franchise

Franchisors often state that, when layoffs occur, they get more prospective franchise buyers. So expect franchise sales to do well in the coming year. Another piece of good news is that many franchisors will be more likely to help with the upfront financing, directly or indirectly, in light of the credit markets.

In addition to that, when you think of investment alternatives (e.g. stocks, real estate), a franchise may seem like a good option. Many people may prefer to invest in something over which they feel they have more control after the volatility of the last year. 

Many franchisors offer a proven business model. They are often less risky than a new franchise system. However, there may be more opportunity in a new franchise system. You have to determine what is best for you. Start by learning how to buy a franchise.

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Beware of scams

One word of warning – in tough economic times, scam operators come out in full force. Kiplinger has a great quiz that tests your ability to spot a scam. They present you with eight business opportunities, some which are legitimate and some which aren’t. See how you do!

Then apply this to the real world. With any opportunity you consider, trust your own instincts and do your own research. Prove to yourself that it is the right opportunity for you and the right time for the opportunity.

Hear today's lesson and laugh on The Bigg Success Show. 

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(Image in this article by -MISHA)

The Champions Of Breakfast

By Bigg Success Staff
02-26-08

Success stories

the_cereal_bowl_logo 

Twin brothers Kenneth and John Radar remember their Dad’s fascination for cereal. He was always scouting out the most recent offering.

As a college student at Syracuse University, Kenneth noticed that students ate a lot of cereal. He also noticed that everyone had their own taste in cereals.

That sparked an idea!

Why not create the “Starbucks of cereals”?

He wrote a business plan for his idea that won competitions. That gave him the encouragement he needed.

He teamed up with his brother, along with life-long friend Michael Glassman, to put the business together and arrange for financing while the three young men finished graduate school.

Upon completion, they launched The Cereal Bowl!

Their first store opened in Miami in February 2006. It serves college students, business people, and families.

They let their customers create their own cereal combination or select a specialty, such as:

  • Give Me S’more, which is a mix of Golden Grahams, Coco Puffs, Graham Bites, marshmallows, and chocolate milk crystals.
  • Ruby Nut’s About You, a blend that includes Honey Nut Cheerios, Grape Nuts, walnuts, almonds, pecans, and cinnamon.

They also offer combinations made with oatmeal as well as yogurt parfaits, granola bars, Rice Krispies Treats, and their own version of a smoothie, made with sorbet and oatmeal.

It’s a very simple business – they don’t have to cook anything. They only need a burner to make hot cereal. Yet their customers love it! Business is as healthy as many of the items on their menu.

They have worked on perfecting their prototype store over the last couple of years. Now they’re planning to test their concept in a kiosk. They also have started franchising, with one store on the drawing board and more to come.

They believe they can expand their chain to at least 200 stores in the next few years.

These young men have become the champions of breakfast!

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Sources

The Cereal Bowl 

QSR Magazine, Ones To Watch: The Cereal Bowl, by Sabrina Davis 

More Success Stories

Snowboarder Busts Into Business

Busting Into A Niche

90-Year Old Finishes Career On A Super High

Russia’s King Of Franchising

The Mail Order Bride

The King Of Television

Stepping Up To The Plate 

Should You Buy A Franchise Or Go It Alone?

By Bigg Success Staff
02-07-08

Bigg On Small Business

sunflower 

So you want to be in business FOR yourself. But you’re not sure you want to be in business BY yourself. You want to know if you should buy a franchise or go it alone. In the end, only you can make that decision by understanding the advantages and disadvantages of pairing up with a company that offers franchises (“franchisor”).

Most franchisors today offer business-format franchises – you buy an entire operating system, not just the rights to distribute a product or license a name. So we’ll focus on business-format franchises in our discussion today.

Advantages of buying a franchise

  • Proven concept
    A good franchise system has been proven. They have units in place. The kinks have been worked out. Consumers have voted with their dollars. Owners are earning a good return on their investment of time and money.
  • Recognized brand
    A good franchisor makes a bigg brand available to small business people. They have a trademarked name, logo, slogans, identification materials, and more. You don’t have to spend time and money building a brand; the franchisor has done it for you.
  • Proven systems
    With a good franchise, you get a complete operating system. They have tested how to produce their product or service in the most efficient way. They continue finding new ways to improve their operations through scientific testing and measurement.
  • Proven promotion
    Along with proven systems, a good franchise has market-tested advertising in place. As a franchisee, you participate in effective advertising campaigns developed with the resources of a bigg company.
  • Training
    A good franchise system trains you and your staff to run your business profitably. You’ll probably be required to complete extensive training upfront. You’ll likely be obligated to update your training regularly. You’ll have training programs for your employees, as well, so they get to the top of the learning curve quickly.
  • Ongoing support
    With a franchise, you are the local branch manager of a large chain. You’ll get support from your parent company on an ongoing basis. You’re also part of a club – other franchisees who are motivated business owners just like you. Since you don’t compete with each other, you can share tips on how to be more successful.
  • Buying power
    A good franchise organization brings economies of scale to you. Because they buy in volume, you’ll often get significant discounts on essential products and services.
  • Site selection
    A good franchisor can help you research markets to determine the best place to locate your business. Beyond that, they can help you select a specific site within that market that has the traffic you need to succeed.
  • Store design, construction, and layout
    Consumers today are looking for an experience. With a franchise, you get a proven store layout that maximizes your sales through effective sales psychology. In many cases, they can also help you get the store built.
  • Benchmarking
    A good franchise system delivers critical numbers to you so you know how you’re doing and where you need to improve. This will help you tweak your operations and give you goals to achieve.
  • Marketable asset
    When you’re ready to move on, a good franchisor may help you find a buyer. They are constantly fielding calls from people interested in getting into their system. Your business will likely be easier to sell if it’s part of a large franchise system.
  • Less downside risk
    Research on the success rates of franchisees shows mixed results. However, these studies look at the entire spectrum of franchise organizations. If you do your research, you can find a system where your risk is less than going it alone.

Disadvantages of buying a franchise

  • Start-up costs
    All of the benefits listed above don’t come without a cost. You’ll have to pay an initial fee to become part of any franchisor’s system and start reaping the benefits. This fee may be offset, in part or in whole, by the discounts you get on purchases through their system.
  • Ongoing costs
    You’ll be required to share a percentage of your sales or pay a fixed monthly fee. You may also be required to participate in system-wide endeavors, like coop advertising. You’ll likely be required to adhere to certain operating standards, which will cost you money.

    Hopefully, these costs pay for themselves (and more) through your volume discounts and an increased value-perception in the minds of your customers.

  • Partnering problems
    When you’re part of a franchise system, their image is your image. A customer from your city may have a bad experience with a franchisee in another community. So they won’t patronize your business. That’s why good franchisors maintain such exacting standards.

    If your franchisor runs into trouble, financially or otherwise, you may be hurt as well. Whatever happens to the chain as a whole, for good or for bad, will likely impact you. Make sure your franchisor is financially sound before you sign on the bottom line.

  • Lower upside return
    If you have less risk, you often accept less return. You’ll have the additional costs discussed above. You may also have less opportunity to grow your business – you may be restricted to a certain territory in which you can market or operate.

    Keep in mind, you can always buy additional franchises. Many franchisees have become bigg businesses in their own right through owning and operating multiple locations!

  • Loss of creative control
    Mavericks need not apply! When you buy into a franchise system, you are agreeing to use their system, not yours. You can make suggestions on how to improve it, but they decide if you can implement it.

    This is perhaps the biggest disadvantage to buying a franchise. Some people just can’t be happy under these circumstances. They don’t make good franchisees.

A business-format franchise is an “instant business” – just add capital and start! You can’t get more turn-key than that. There are many advantages to buying a franchise. There are a few disadvantages. In the end, only you can determine if a specific franchise opportunity is right for you, or if you should go it alone!

Find out when we post new articles. Subscribe to the Bigg Success Weekly.

Hear today's lesson and laugh on The Bigg Success Show. 

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(Image by Eric Skiff, CC 2.0)

Russia’s King Of Franchising

By Bigg Success Staff
01-26-08

Success Stories

red_square 

Russia’s Merab Elashvili oversees four franchise chains with a rapidly-growing network of 160 restaurants. Through these restaurants, he employs over 3,500 employees and serves over two million customers a year. 

And he’s just getting started!

Tai Adelaja wrote a great article recently for The Moscow Times called, Sparking a Chain Reaction that tells Merab’s story.

Getting started
He started his first business before he reached his twenties. He imported assorted goods – like candles and chocolates – from Europe shortly after the collapse of the Soviet Union.

He found it difficult to gain people’s trust because he was young and inexperienced. He kept pushing to prove himself and win confidence.

Making the break
It paid off. In 1997, at the age of 23, he found a financial backer. He applied to Sbarro, an American franchisor of Italian restaurants, for the exclusive rights to the Russian market. Sbarro wasn’t sure how to respond to this young, dreamy-eyed lad!

Merab won them over through his perseverance and persistence – they granted him the rights he sought!

Over time, he has expanded his territory with Sbarro to include the other countries of the Commonwealth of Independent States, the Baltic States, and much of Europe.”

Overcoming adversity
But life hasn’t always been easy for Merab. His father died when he was three years old. He was forced to flee Georgia, the country where he was born, due to civil unrest. He wasn’t even eighteen yet.

In 1998, after less than a year with Sbarro, Merab faced perhaps the biggest challenge of his life. It was the early days of the post-cold war era in Russia. The economy was unstable.

Merab was forced to make difficult decisions in order to survive. He closed down some restaurants and laid people off. He also negotiated with Sbarro. They agreed to defer some of his royalty payments and to let him purchase some food locally.

He faced questions about the viability of his franchise model in a developing country. But he persevered. He survived and thrived!

Going and growing
He continued to develop his Sbarro chain. In 2002, he began franchising two of his own concepts: Vostochny Bazar and Bash-na-Bash. He launched a third, Viaggio Italiano, three years later.

He plans to continue developing his franchise organizations. He’s also giving back to the communities he serves with his restaurants. He believes that business people need to do that.

Gennaro Sbarro, Sbarro’s founder, said Merab is one of their top franchisees. Ernst & Young, the giant professional services firm, named him Russia’s Entrepreneur of the Year in 2006.

Many of the same people who questioned his franchise model early in his career now applaud his vision of bringing franchising to the country.

He saw opportunity. He acted upon it. He persevered. That’s why he’s now known as … the “king of franchising”.

Find out when we post new articles. Subscribe to the Bigg Success Weekly.

Hear today's lesson and laugh on The Bigg Success Show. 

Other success stories 

Success Came Slowly For This Fast Food Legend

The King Of Television

The Mail Order Bride

Stepping Up To The Plate 

How To Make $3 Billion A Year 

Use Your Strengths To Balance Your Life

By Bigg Success Staff
01-23-08

Work-Life Balance

man_balances_bicycle_on_head

Like most professionals, you probably feel pulled almost constantly. Work demands spill over to home and vice versa. You often feel pulled in several directions at once. You try to sort things out by priority, but what do you do when everything is a high priority?

There’s a great article at the Business Week site called Custom Building a Life.
Jeff Weinstein tells his story to Nick Leiber. We give a “bigg salute” to them both! We’ll give you a summary here, but you should definitely read the article.

Jeff started The Counter, a restaurant that serves custom-made burgers at a great price, in 2003. He mentions three goals for his business at that time:

  • To earn a good income
  • To satisfy his customers by serving quality food at an affordable price.
  • To have a place to have dinner with his wife

Things didn’t turn out the way Jeff planned – they turned out much better!

He attracted attention because customers loved his place so much. Soon he started franchising. Last year, sales topped the $3.5 million mark from his seven stores. Now with 125 more stores on the table, he projects $9 million in revenue this year!

Obviously, Jeff is still focused on his growing business. However, he also wants a satisfying life outside his career. That desire is not unique. It’s HOW he’s trying to fulfill it that’s interesting.

He gives his customers what they want, when they want it. Why couldn’t he apply that to his life?

He wouldn’t segment his life anymore; that was a recipe for failure.

Instead he would flow like soda from one area of his life to the other. His wife may say something that helps him at work. His co-workers may give him insight for things at home. He would pay attention to all the important people and priorities in his life all the time!

What about your work? Is there something that works in your professional life that you can use to balance your world? Your solution may be different than Jeff’s. He’s doing what he understands … what works for him.

That’s the real lesson – use YOUR strengths to find the balance you desire.
Share your solution with us! Leave a comment below.

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Hear today's lesson and laugh on The Bigg Success Show. 

Related posts:

Your Personal SWOT Analysis (Part 1)

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The Work Life Teeter-Totter

(Image by mushroom and rooster, CC 2.0)