Buying A Franchise Versus Starting A Business

Starting a business can be an exceedingly rewarding endeavor. From its inception you have complete authority on all decisions big and small - something as imperative as planning a restaurant menu, for example, to choosing what color and style of blinds to hang in the windows, you control everything.

Additionally, for those lacking the start-up capital to purchase or rent a location, you can start a business from home with little more than a computer with Internet access.

As attractive as this autonomy seems, however, starting a business from scratch is not without pitfalls.

For instance, there are high failure rates for new businesses. It takes time and effort to develop your business plan, secure financing, acquire the necessary licenses and get a clientele base. Indeed, it is wise for new business owners to have six months to one year of income set aside to subsist on while the business gets its footing. And, unless you have a wholly unique business idea, you will likely find yourself in competition with franchise businesses that enjoy vast brand awareness and customer loyalty.

This brand awareness is one of the major pros of buying a franchise business. You will be working within a proven system and enjoy instant brand awareness and credibility.

Additionally, a network of support is available to franchisees. This includes technical and managerial support from individuals who are knowledgeable about your specific business as well as the benefit of shared marketing.

And, if another franchisee in your area airs a commercial or sponsors an event, it stands to reason that your franchise location would share in the customers purchased by your neighbor’s advertising dollars.

All of these facts add up to a quicker return on your investment because your franchise business is recognized from the moment you open its doors for the first time. Also, should you find that you are enjoying great success with your franchise business; expansion is far easier with franchises than with a small business.

Finally, if it’s the food, hospitality or retail industry in which you’re interested, franchise businesses have a much greater success rate in all of these areas.

Despite all of these redeeming qualities, a new business owner should remember that a franchise business is not a guarantee for success, and the start-up can be quite costly. A franchise business requires the same initial investment as a new business where location, supplies, inventory and employees are concerned, but it has the added cost of a franchise fee which varies widely but can be as much as several hundred thousand dollars.

Franchise Red Flags

Entrepreneur.com lists five red flags that should alert a new business owner to a potentially poor franchise choice:

One is the franchise’s litigation history, which must be made available to prospective franchisees in the Uniform Franchise Offering Circular, or UFOC. A new business owner should look for how many cases the company has been involved in with franchisees. Anything greater than one or two cases per hundred franchisees is cause for concern.

Second, you’ll want to examine the turnover of units in the company, also available in the UFOC. How many franchisees have left the company and why? Was it due to failure or the sale of a successful unit to a new owner? The answer to this question can help determine—at least partially—how successful you might expect your unit to become.

Another factor that should disquiet a prospective franchisee is, after sincere research, an inability to come up with any substantial numbers concerning things like sales and profits. If it seems that this issue is skirted around, another franchise may be a better option.

Additionally, before buying a franchise business, you should ask around about the relative happiness of other franchisees. Talk to other franchise owners. Are they happy with the support provided to them by the company? Are they pleased with the success of their own units? A preponderance of unhappy franchisees suggests that you may be unhappy in this franchise as well.

Finally, although it seems simple enough, a brief look into whether your cultural and moral values mesh with those of the franchise might be easily overlooked. Is the franchise run by individuals whom you deem to be honest and that share your ethical guidelines? If not, it may be a difficult system in which to work.

Top Franchises of 2007

The Franchise 500® is a list compiled by Entrepreneur.com using the same criteria to judge each company, no matter what the size. These factors are “objective and quantifiable” and include, but are not limited to, the company’s financial strength and stability and the growth rate and size of a company.

Entrepreneur.com examines the start-up costs for each franchise, the length of time the company has been franchising, as well as some of the factors on their red flag list, particularly litigation and turn-over rates. They find out whether the company provides financing and use an independent CPA to audit its financial data. They insert all this data into an exclusive formula and assign each company a cumulative score. Then, the companies are simply ranked based on those scores.

Just a few of the franchises you’ll find on the Franchise 500® are: UPS Store/The Mail Boxes, Etc., Liberty Tax Service, Super Cuts, Two Men and a Truck, Golds Gym, Arby’s, Microtel, Beef O’Brady’s and Chem-Dry Carpet, Drapery and Upholstery Cleaning.

While the Franchise 500® can be a valuable resource for someone considering buying a franchise, Entrepreneur.com does not evaluate subjective criteria, and these areas—such as franchisee satisfaction—will need to be researched independently.

Capitalism Versus Socialism In A Home Based Business Enviroment

Though capitalism has made the United States the richest country in the history of the planet, there are still detractors (with great numbers) who would prefer the country move to more a socialistic form of economy. These detractors, by and large, are not uneducated, communist haters of America. They are liberal leaning patriots with an idealism that many in the past have had. On paper, few can argue that the socialist utopia sounds nice. Everyone working for everyone, pulling their own weight, and sharing alike the bounty of the land. It’s hardly a step forth from the way the Native Americans lived in the days before European settlement. The trouble with socialism (beyond what some consider at the outset to be an unfair and stifling dogma) comes with its application. Even more so than with free enterprise, the rich get richer and the poor never have a chance for advancement. Greed sets in among those in the highest levels of government, and eventually, rather than all working for all, all are working for a few. With capitalism, at least in its strictest form, everyone has an equal shot.

Before we go any further, let’s define capitalism. It is, basically, the existence of a free marketplace, where people may set their own prices for their services, and the market will determine whether or not a product or service can be sold for that price. The government, except in extreme cases of corporate monopoly, stays out of the way. The theory behind the system says that products and services will naturally balance due to supply and demand. The more people want a service or product, the higher the price (with factors such as production costs and advertising of course playing a part). The lower the demand, the lower the cost. And, of course, the rarity of a product or service will also play a gigantic role in setting the cost. With this system, the stage is set for competition. This, in turn, helps drive prices to their lowest possible set point, while encouraging a system that allows everyone a chance at the brass ring. The smartest, the hardest working, the most ingenious–these people will rise to the top in a capitalist society.

On the other hand, let’s look at socialism. In a socialist system, the government provides the country’s basic needs and requirements. It sets the price on health care, food, schooling, housing, and almost everything else. Most often, these basic needs are free of cost to the general population. Those who do no work whatsoever are provided for just as well as those who work the hardest. There is little chance to become rich in a socialist economy, and little incentive to be the best or work the hardest at anything. The idea that everyone is equal is taken to the extreme. Except, of course, this becomes perverted in almost every socialist nation. The government reaps the reward of the populace’s hard work, and the politicians (who may or may not be in office due to a general election) become the only example of wealth in the country.

As a business man or woman, you owe whatever success you might have first and foremost to the fact you live and work in a capitalist society. Your advancement will be as high and far as your merit will take you. Your ideas and speech are free, and the only thing holding you back is your own limitations. At the same time, we live in the most generous country on Earth. Through government programs and, more importantly, private charities, we take care of those less fortunate better than any other economy. This is why capitalism will continue to prevail, and the United States will continue to be the world leader in progress and innovation.

Business Competency Versus SEO

A discussion about business competency and how offering a good product or service at a reasonable price can be much more effective than employing SEO strategies.

There are many people out there who think that the integrity of the Internet and its content is being corrupted by search engine optimization techniques and they may well be right. The result of SEO practices has been misleading redirects, incomprehensible writing and the ruin of online entity that had the potential to become the next big Alexandrian library.

This is why many web site and search engine experts are advocating the use of competency as good SEO. People are simply sick of being manipulated by clever SEO individuals who use misleading keywords and other devices to lead them to a website that is trying to sell them something that ninety percent of the time they don’t even want. The polarity this of course is a website that is competent. This would be a website that takes the time and trouble to provide a great product or service at an affordable price. The theory here is that nice guys don’t have to always finish last and that it is possible to get all of the business that you need simply by typing in honest keywords that reflect what it is you really do.

SEO is all about the manipulation of a search engine and if you are offering a service or product in the first place clients will come to you. You simply won’t have to spend a lot of money building lists or applying professional SEO strategies trying to convince them to visit you.

The idea that customers respond the most to excellence is not a theory that should be shrugged off so easily by fans of practicing SEO. In fact, so many members of the public are becoming aware of SEO techniques that they may even see the application of them as an indication that the site is selling something of a lower quality.

Business Advertising: Do-It-Yourself Advertising Versus Using A Promotional AD Agency

Are you a small to medium sized business owner? If you are, you may be looking for ways to improve your customer base and your profits in general. If you are you, you may be interested in starting a new marketing or advertising campaign. When it comes to business advertising and business marketing, you will find that you have a number of different options. Many business owners choose to do their own direct marketing promotions, while others choose to use the services of a professional promotional ad agency.

If this is your first time proceeding ahead with a full scale marketing or advertising campaign, you may be wondering whether you should use the services of a professional promotional ad agency or if you should perform your own direct marketing promotions. When it comes to determining which marketing approach is best for your business, you will want to examine the advantages and disadvantages of each. A few of the most influential advantages and disadvantages, of both promotional ad agencies and direct marketing promotions, are outlined below for your convenience.

When using the services of a professional promotional ad agency, many business owners appreciate the time that they are able to save. It is no secret that business marketing and business advertising are time consuming tasks, especially if you are unfamiliar with the process. Should you decide to allow a professional promotional ad agency handle your business’s marketing and advertising, you will likely find yourself able to focus on other important tasks.

In addition to saved time, using the services of a professional promotional ad agency often produces professional results. Many promotional ad agency employees have experience with business advertising and business marketing. Most promotional ad agencies have taken the time to research and test out numerous marketing approaches. This, essentially, means that they already know which approaches are successful, like promotional gifts, and which ones are only a waste of time and money.

Although there are a number of advantages to uses the services of a professional promotional ad agency, there also a number of disadvantages to doing so as well. One of those disadvantages is the cost. Hiring a professional promotional ad agency can be fairly expensive. Despite the cost of doing so, many business owners find it well worth the costs. In fact, many look at it from the standpoint of a business investment; an investment that they will likely see a return on.

If you are uninterested in using a professional promotional ad agency to your advantage, you may be interested in learning the advantages and disadvantages to doing your own direct marking promotions. As for the main disadvantage to doing your own direct marketing promotions, you will find that it can be time consuming to do. If you are relatively unfamiliar with business marketing and business advertising, you may spend a good deal of your time doing research and then relying on trail and error. As previously stated, many promotional ad agencies already have proven marketing and advertising plans in place, which include reward or incentive programs.

Perhaps, the biggest advantage to doing your direct marketing promotion, either yourself or by having one of your staff member do it, is the money that you may be able to save yourself and your business. This is ideal if you are operating your business on a budget. Although your time or the time of your employees will cost money, you will find that the cost is often lower than that of using a promotional ad agency. It is also nice to have complete control over all advertising and marketing decisions.

Whether you decide to handle your own direct marketing promotions or rely on professional assistance, you will want to consider using reward programs or customer incentive programs to your advantage. These programs can include rewards, like free merchandise or travel certificates, to new or returning customers. If you decide to perform your own direct marketing promotions, you will need to find an incentive company to do business with. You will want one, like the Infinity Incentive Group, that gives you the option of choosing multiple promotional gifts.

Business Opportunities Versus Employment: Which Is Right For You?

When it comes to making a living, there are two options: being in business for yourself or being employed by a company or an individual. Of these two options, there is great latitude in what is considered being in business for yourself, especially if you take advantage of business opportunities. In fact, some business opportunities so closely mirror employment, that many people mistakenly consider them ‘jobs.’ But in reality business opportunities are not in this category. To understand the difference, read on as this article will explain in detail how things work with business opportunities versus regular employment.

Firstly, most business opportunities will require a person to fill out a 1099 versus a W-2, which is the tax form used for regular employment by companies. Both forms will alert the IRS that you need to pay your taxes, but the 1099 does not actually allow for deductions like a W-2 does. When you use a 1099 you have to pay for your taxes on your own. This is one of the major disadvantages to working with business opportunities, especially if you make a lot of money. To try to avoid problems, make sure you keep a close record of all of your business transactions. Also set aside 35 percent of your salary for taxes. You can put this in a savings account so you can accumulate interest. Hopefully, you will have enough write-offs that you’ll be able to pocket your savings once tax time comes.

Secondly, most business opportunities do not offer ‘guaranteed’ 9-to-5 employment, as most hire you as an independent contractor. This is the case whether you are working business opportunities at home or in an office. Basically, if you have to fill out a 1099, you are in business for yourself. Anyway, some business opportunities offer such a steady stream of work that you not being hired as an hourly employee is not a problem. However, there are many others that have work every now and then. In these cases you will want to try several sets of business opportunities, so you can always have a steady stream of work to support yourself.

Lastly, business opportunities tend to not offer health insurance. Granted, nowadays there are many ‘regular’ employers that also won’t offer health insurance, but being able to get some form of health insurance seems to be more typical with full-time jobs. With most business opportunities, you will not get health insurance no matter how many hours you work. However, there are the exceptions but they are exceptions that are quite expensive. In these situations all that has happened is that the company offering the business opportunity has struck up a ‘deal’ with an insurance company. You are still paying as if you had signed up for the insurance yourself without the aide of a company.

In conclusion, the main differences between business opportunities and regular employment can be found in the areas of taxes, work structure and health insurance. Indeed, these differences may make some conclude business opportunities are not for them. For others it may not matter as much because the freedom offered through business opportunities outweigh the disadvantages.