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Researching a Franchise

Be Sure to Shop Around

Eight steps to choosing the perfect business opportunity.

Entrepreneur

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For an entrepreneur, reading about business opportunity programmes or attending business opportunity trade shows is like being a kid in a candy store. Each concept and product is more stimulating, dazzling and exciting than the last. It starts as an exercise in pure imagination, as every opportunity is mentally tested against your secret ambition to be in business for yourself.

If you find this mental exercise stimulating, however, you’re more vulnerable when it comes to investing in a business opportunity, because you may be manipulated by sales people who recognise your passion for business involvement. So before you reach for that credit card and buy a business opportunity, stop for a moment to consider the following.

Good Advice

These eight steps will not only protect you, but help you select the perfect business opportunity:

Step 1: Focus, focus, focus

Write down your core interests. What have you enjoyed most about current and past jobs? Contact with people, working with computers, making sales? Home in on the activities that stimulate and inspire you, and let them guide your search. Once you edit and think about your ideas, discuss them with those closest to you.

Also, consider your goals for the business.

Do you want to run it part-time or full-time? What can you afford to spend (and lose)? How will you pay for the business opportunity? What are your income aspirations? How does business ownership fit into your lifelong goals?

Keep these guidelines in mind when you either attend a business opportunity trade show or begin contacting business opportunity sellers. You’ll be surprised how easy it is to get distracted by interesting leads that stray from your goals. Above all, stay focused.

Step 2: Get organised

Before you start investigating business opportunities in earnest, take some time to prepare for the piles of paperwork the process will generate. Set up labelled files to store information about the programmes you like and don’t like, general information, notes on your personal interests and so forth.

When you receive a mailing or return home from a business opportunity trade show, sift through your plastic bag of handouts. Throw away the junk, and file the materials that interest you the most.

Step 3: Shop ’til you drop

Your challenge is to overcome every obstacle when gathering information. This entails attending trade shows, calling sellers whose advertisements intrigue you, visiting sales representatives and talking to other entrepreneurs who’ve purchased business opportunities in the past. Stay in information-gathering mode for a while, and don’t rush into buying anything.

Step 4: Develop healthy scepticism

Whenever you listen to a sales presentation, stay on guard. Expect to hear that the programme can yield thousands of rands in your spare time with only a few hours of effort each week. But be realistic! Sorry to break the news, but no matter what business opportunity sellers tell you, there’s no such thing as easy money. It’s actually hard work to be successful, and if you think otherwise, you are hereby instructed to leave your credit cards and blank cheques at home.

Step 5: Information, please!

As you find programmes that fit your criteria, ask questions of the sellers . . . and keep asking. No detail is too small to investigate further. Take a notepad with you to all sales presentations or trade shows; taking notes will help you remember the questions you need to ask. Some to start with include: Exactly what kind of work will I do in this business? What if no one responds to my marketing efforts? If it doesn’t work for me, will you [the seller] help? Is there a limit to the help you’ll provide? Have you ever been sued by one of your buyers or investigated by a state agency? How long is the training? Are there any circumstances under which my money would be refunded?

Step 6: Check out the company

This is not an easy step. There are a number of places to go to enquire about the legitimacy of a business opportunity seller; unfortunately, they may not have any specific information for you. The best sources of information about a business opportunity are the people who have actually purchased the programme. Ask the seller for a list of buyers in your area. Don’t accept just one or two referrals – they may not give you an unbiased story. Get a full list instead, and call the contacts. Ask them: Did the programme work? Have you made money? Are there any weaknesses in the programme? How much time do you spend every week working on the programme?

Step 7: Test the market for the product or service

Many first-time business opportunity buyers are disappointed when the product or service doesn’t sell. They purchase the advertising and mail the promotions, but nothing happens.

Always try to test the potential of a product or service before you plunk down your credit card. Ask friends and family: Would you buy it? How much would you pay? Run your own focus group, interview people at the local shopping mall – do anything you can to get feedback on the marketability of the product or service.

Step 8: Negotiate the purchase

Here’s a secret: Business opportunity sellers charge prices that vary widely and depend largely on what they think you’re willing to spend. So be a tough sell. Make an offer on your terms, structured to suit your interests. Spread payments over time, defer payments until after delivery of the goods or simply make a low-ball offer. You’ll be surprised when the seller doesn’t close the door on you but keeps right on talking.

Change Your Attitude

These eight steps will help you avoid the most common traps of buying a business opportunity programme, but there’s one last pitfall to be wary of: your attitude. Don’t expect to ever see the value of your investment if it just sits on your shelf gathering dust. Always maintain your enthusiasm, and follow through. It could make all the difference to your future success.

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Researching a Franchise

5 Strategies For Franchise Leadership Development

Follow these steps to develop the most effective leadership skills for your franchise business.

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In my most recent article, I identified the five primary departments that make up every business: Leadership, finance, operations, marketing and technology.

The most important of these is leadership. The experience, business acumen and commitment of company leaders have a greater impact on the outcome of the business than the other factors.

Apply these strategies to create a leadership development plan for your franchise business – or for any other kind of company, too.

1Develop a clear vision and plan

Many companies suffer due to the lack of a plan. This leaves the team to struggle for direction and spend time putting out fires instead of taking constructive action. This is like taking a journey without a map.

The first step is to write down the company leadership vision. Be specific and include job descriptions and action items.

Related: How Body20 Moves Their Franchisees In The Direction Of Success

2Choose your model

I always say that it is critical to identify your operating system and adapt the business model accordingly. Your operating system is what makes you tick? For instance, if you have experience and work better in the field than behind a desk, you may be more effective as a hands-on trainer than as an in-office resource. In this example, you may choose to have others run the office duties.

3Examine your current team

One of the more painful consulting duties I have had over the years has been the duty to reposition or remove team members. This can be especially difficult if the individual is a friend or family member. Make sure each member of your team is the most qualified for the position.

Don’t be afraid to make necessary changes for the good of the overall company. Be selective as you add people to your organisation to make sure they are a good fit and have what it takes to help your company thrive.

Related: Savvy Sales Skills To Grow Your Franchise Footprint

4Get outside help

I frequently hear from my clients that they don’t know what they don’t know – they don’t know where to start or what they need to learn. Leadership is one area that has many resources for ongoing education and development. Recently, I attended the Multi-Unit Franchise Conference in Las Vegas.

One of the most successful multi-unit franchisees stated that the most important strategy he has implemented was signing up for a leadership training and development program.

5Use technology tools

Engagement and implementation are the most important factors of any business system. Technology tools can enable you to make sure that the leadership key performance indicators (KPIs) are executed and are being tracked. You will want to make sure that the technology tools also help you implement the important leadership development tasks and behaviors on all levels of your organisation.

Becoming a great leader may seem to be a daunting undertaking. Remember that every great leader started out the same way you did, and you are still writing your success story.

Related: Why Digital Isn’t Enough To Attract (And Keep) Every Customer

One of my favorite examples of leadership that I wrote about in Franchise Bible, 8th Edition contrasted the difference between inspiration and motivation. I was the CEO of my second franchise organisation, and I was talking to one of our franchise owners on the phone about my leadership style and strategy. I told him that I identified that I needed to be a motivator. He quickly corrected me by saying “we don’t need a motivator, we want you to inspire us.”

It is critical to be an inspirational leader for your business to thrive. Each member of the community needs to look up to you and your team. They need to turn to you when things get tough.

This article was originally posted here on Entrepreneur.com.

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Researching a Franchise

3 Books Every Franchise Buyer Needs To Read

With technology disrupting the world of franchise, use the tools from these three books to stay innovative with your business.

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There are many new authors in the franchise and small business category that have written some very helpful books for our industry. Recently, I have been asked to recommend books to help franchisors and franchise owners.

Take a look at the following books:

1Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne

Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne

I have been coaching some very innovative new companies lately that are bringing new technology, business models and marketing tools to the franchise world. Some of these businesses are creating a whole new market. When I identify companies like these, I always suggest that they read Blue Ocean Strategy to further develop their skills and vision. This book is a paradigm shift for many business owners that focus on moving in the direction of untapped new markets, or “blue oceans,” instead of going head-to-head with the competition in “bloody red ocean” existing markets.

Related: Should You Purchase An Existing Franchise?

2Brick and Mortar Franchise Success by Carolyn Miller

brick-and-mortar-franchise-success-by-carolyn-miller

This book is a must-read for anyone that is opening brick and mortar locations. In her book Brick and Mortar Franchise Success, Carolyn Miller identifies the industry tips and gold nuggets to save money and time before, during and after the build-out and construction phases of a new business.

Many of my clients have benefited in a very tangible way from this book. Franchisors will find many strategies that can immediately be implemented to better train and support franchise owners as they prepare to launch. Franchise owners can use this book as a guide as they move through site selection, assemble their construction team and initiate their pre-opening steps.

3Millennial Millionaire by Bryan M. Kuderna

millennial-millionaire-by-bryan-m-kuderna

I recently wrote an article about the millennial generation and what is important to consider as a franchisor if you seek to recruit these individuals. This led me to meet the author of Millennial Millionaire, Bryan Kuderna. Kuderna is a Certified Financial Planner with a goal to educate young professionals in the area of financial literacy. This book will help you understand the priorities, beliefs and lifestyle of this generation as well as reveal some solid financial strategies.

During my research for Franchise Bible, 8th Edition, I found that the franchise industry has changed in many ways over the years. Technology has had the biggest impact by modifying buying behaviors. Not too many years ago, franchise buyers would find an opportunity in Entrepreneur magazine or by attending a franchise expo in-person.

Related: Owning A Franchise – Good Idea Or Bad Idea?

They would then go through the franchisor’s respective step-by-step process to qualify, purchase and launch their franchises. But today, buyers can find a plethora of information online about nearly any franchise they want to learn about. This has leveled the playing field for new innovative companies to compete favorably with the “big boys” in the marketplace. Now, the more creative and tech-savvy companies have the advantage instead of the ones with largest budgets.

Franchise operations have also shifted quite a bit due to technology. Franchisors now have more information at their fingertips than any other time in history. This enables them to offer better training such as video operations manuals, ongoing educational webinars and a variety of dynamic tech tools to gather critical stats.

These changes have made it more important for franchise leaders to learn as much as possible to gain a competitive edge and stay relevant in an ever-changing business world. The books that I reviewed in this article are a great starting point. But, remember that innovation is the key to growing in the modern marketplace. Now is a great time to get your team together to create leadership and marketing strategies using these tools.

This article was originally posted here on Entrepreneur.com.

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Researching a Franchise

Start A Service Franchise: Cash In On These 3 Successful Models

If you thought all the money was in fast food, think again. Consider switching your focus to a service franchising as a profitable business investment.

Diana Albertyn

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sorbet-store

There are important considerations to make when choosing to buy into your first franchise. Sure, everyone’s going for the restaurants, grocery stores, and other product-based concepts, but is that really where the money is?

“The franchising services sector has shown healthy growth despite challenging economic times,” says Sybrand Bezuidenhout, business development manager franchise: services, Barclays Africa Group.

“All indications are that it will continue to grow and positively contribute to the economy – especially if franchisees focus on providing quality products and top-class customer service.”

Related: 4 Types Of Business Models

Take advantage of ‘the lipstick effect’ – where consumers are more likely to spend on little luxuries such as lipstick (or renovating instead of buying new homes, or keeping their cars for 10 years instead of five) as opposed to making big purchases in dire economic times – by investing in the following service franchises, to experience good returns, even when product franchises aren’t:

1Harness the power of pampering

woman-getting-manicure

When money’s tight, consumers tend to cut down on so-called ‘luxuries’, but they don’t deny themselves the odd indulgence. People still strive to spoil and pamper themselves, the difference is the price tag.

“The change is seen in what their hard-earned money is spent on,” says Bezuidenhout. “For instance, rather than going to a spa, a woman will choose to get her nails done. That way, she still feels she is treating herself, but at a fraction of the cost.”

Sorbet, a branded chain of health and beauty salons, nail bars and dry bars, is on almost every corner for a reason – people are using its services, even when disposable income is low. It not the cheapest treat, but also not the costliest.

2Build a future-proof franchise

A recession isn’t the ideal time to start renovating or building your dream homes, but a wise franchisee knows that it’s not when you start a construction services business, but where. ‘Location, location, location’, so goes the real estate adage.

Related: 3 Types Of Ecommerce Business Models

Have you noticed a suburb where newly built complexes and houses are springing up lately? This could be your new premises. “Building franchises specifically, perform much better in these because home owners are more likely to undertake work on their homes,” says Bezuidenhout.

Silverline Group provides construction services including architectural support, detailed shop drawing design, structural engineering, quantity surveying, distribution, and construction.

3Older cars, more servicing

older-cars

As the fleet of cars on South Africa’s roads get older, auto services franchise groups are soaring in popularity. You can join them if you effectively market your competitively priced services as a viable alternative to dealerships.

Related: How Women Entrepreneurs Can Change the SA Business Landscape

“Even if the economy shows unexpected recovery and growth, the auto services franchise industry will still thrive as higher disposable income will see a new wave of entry level consumers who will replace those customers who upgrade their vehicles to new ones under maintenance plan,” explains Bezuidenhout.

Car Service City, specialists in affordable service and repairs, is fast becoming one of South Africa’s leading car servicing groups, according to FASA. Its rapid growth is owed to exploiting a gap in the market and running with it.

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