Author: Mike Pierce

ABOUT THE AUTHORS

Our mission is to help you reach your personal and financial dreams through the power of franchising.

Professional Franchise Brokers was founded by Michael and Laura Pierce, CFEs, to provide the expertise and resources for those who are interested in owning their own business. We have real world experience to help people who are interested in owning their own business through franchising. Owning a business is not for everyone. We know that and we have the tools and resources to determine if business ownership is for you. Professional Franchise Brokers have the resources to help you locate a top quality franchise – one that is a good match and enables you to meet your personal and financial goals and dreams.

You Don’t Have To Start A Business Alone

During this time of Covid, many people are thinking of starting a business. The fear of starting out on your own is a major stumbling block.

Read this post; These are the reasons not to run a business alone.

I am here to tell you there is a way to overcome that fear, franchise business ownership.

The franchise business model is a proven formula that you can easily follow. It is a great way to be in business for yourself and not by yourself. That is why there are 773,603 franchise establishments in 2019 and franchising a major driving factor in the US economy.

You should start by understanding your strengths and skills.

To learn more about franchise opportunities in your area, go to my calendar and set up a time for us to talk.

 

Using A Proven Method To Find The Right Franchise

Trying to find the right franchise can be frustrating. After all, there are nearly 3500 franchises in the world today.

For most people, they have no idea how to determine if a franchise opportunity is right for them.

Finally, who do you trust?

All of this leads in two directions. You get stuck in what we call, “Paralysis by Analysis” or you just give up and look for a J-O-B (which is why you started looking in the first place).  In either case, the major factor is fear or just lack of knowledge about the opportunity.

So what is a good shortcut to finding the right franchise?

Start by understanding your strengths and skills. This will save you time and frustration in the long run.

How bad do you want to be your own boss? Use our shortcut, it only takes about 10 minutes and you will learn your strengths, skills and more importantly what business culture is the best fit for you.

Click Here for Our Shortcut.

 

Passive Income Franchises Available

ACFN Logo
ACFN Logo

ACFN is North America’s only ATM Franchise

The Concept

We have been providing ATM services since 1996, began offering ATM franchise opportunities in 2003, and we now have more than 240+ franchisees that own and operate 2,250+ ATMs in the United States and Canada.
We’ll find qualified locations in your area, negotiate and obtain the contract for the placement of your ATMs.

Please Contact Us!

List of Franchise Industries still open during Covid-19

Social Distancing

You probably never consider what was an “essential” or “non-essential” business until the Coronavirus Pandemic. You probably never thought  we would see a time when ONLY “essential business” would remain open. It has been left up to state and local governments to determine which businesses are essential or non-essential. But there have been many businesses that have been deemed essential by everyone.

I thought it might be interesting to start a list of franchise industries that are open and doing business. When you think about all the advantages of buying a franchise over starting from scratch, no one ever considered a national shutdown. Franchisors have been working hard to help their franchisees during this time. The type of support that a stand-alone business would not have access.

Here is a list of industries that are still open:

  • Disaster, Recovery, and Restoration
  • Automotive
  • Pet Related
  • Packing and Shipping
  • Fast Food (that have Drive-Thru or can offer Curbside service)
  • Pest Control
  • Home Services
  • Senior Care
  • Moving Companies

Financing the Start of Your Franchise

Deciding to start a business is exciting and scary. There are many considerations but depending on your business plans and overall goals. Choosing to buy a franchise can help solve many of the problems when starting a new business, especially if it is an established brand with a loyal consumer base. It does not solve then need for financing. You may still need to find financing. Here are several options and we are here to help you find the one that works best for you.

Franchisor

A great option for financing is from the franchisor directly. Granted, this is not offered through every franchise, but a growing number of reputable businesses are offering this potential funding solution. In fact, several companies even help to guarantee the loan in case of franchisee default. If interested in franchisor funding, then look under item 10 of the FDD to see if it is offered.

SBA Loans

The Small Business Administration offers partial guarantees to third-party lenders to help reduce the risk of lending to new ventures or franchise developments. Many franchisors are approved by the SBA, meaning that the loan process is streamlined, not guaranteed. The 7(a) loan program is the most beneficial program for franchisees and has a cap of $2 million.

Family and Friends

While it is a nice idea to partner with family or friends in a business venture, it is vital that the details of the partnership are laid out in a legally binding agreement. These agreements offer clarity and specify obligations, which help to avoid potential personal and professional conflict later.

Online Lenders

Many online lenders may be happy to work with a new franchisee, but not everyone is aware of this potential marketplace. There are several websites available that act as intermediaries between lenders and borrowers. Essentially borrowers create a loan request, the intermediary site then posts the request to its pool of potential lenders to find a suitable loan match, which can be a line of credit, bank loan, SBA loan, etc.

Retirement and C Corporations

One of the last options available to a franchisee is to use their retirement accounts. Now, since there are penalties for removing these funds early, they can establish a C corporation, which would then be the owner and operator of the business. The franchisee can then roll their retirement accounts into the corporate account, investing it into the newly formed company.

A franchise can be a great opportunity and funding may be difficult, but we are here to help you navigate all the challenges of business ownership and financing.

Mythbuster: Perception vs. Reality of Owning a Business

Owning your own business can be life-changing. The difference between a good life change and a bad life change is having the right expectations from the beginning. Knowing the reality of owning a business is your first step toward success.

Here are some of the misconceptions people may have:

  • Buying a business will solve my near-term financial issues
  • A business will quickly replace my lost salary
  • There will be immediate cash flow/profit available
  • I can start a business without any money down
  • There will be no additional investment needed after the initial purchase
  • The business will create wealthy on Day One

Here is the reality:

  • A new business will not solve any short-term financial needs. In fact, it can do just the opposite. A new business may not show profits for 6-month, 12-month, sometimes 24 months, or more.
  • You may need to put money into the business to help it grow. Therefore, you may not see a salary for 6 to 12+ months.
  • Wealth creation may take longer than you think. Many people do not understand revenue, cash flows and profits. Just because you received $100 in sales does not mean you have $100 in your pocket.

Quality of Life misconceptions:

  • Once I open the doors, people will be coming in
  • I can take a lot of time off
  • Other people can run the business; I will manage from a distance with minimal effort; or I will just hire people to run the business        
  • I can just hire friends and family without regard to whether they are the best fit for the job
  • I can buy personal luxuries to appear successful i.e. going out and buying a BMW to show people I am a successful business owner

The reality of what your life may look like as a business owner:

  • When starting a business, you may need to put in long hours or be “hands on.” You will need to understand the day-to-day workings of the business. You may be working more hours than your current job. Nobody is going to have the drive or incentive to start and grow the business the way you will. Remember, you just invested thousands of dollars to start your business. You should want to know how the business works.
  • All this work is not the long-term solutions. Your long hours will pay off with the ability to hire the right management staff and you will have gained an acute knowledge of expense management which is critical to your business survival

Myth: Buying a franchise will Guarantee success

Reality: There is no guarantee of success when starting a business. A franchise can provide you a better chance for success but it you are not the right fit, don’t dedicate yourself to its success or don’t follow the system, your business can fail.

Myth: The franchisor provides you solutions for all your problems

Reality:  Every business and business owner is different.                 There is no “cookie-cutter” business. A franchise provides a system that has been proven to be successful many times over. If you follow their system, your chances of success will increase but it may not solve all the problems you may encounter. You must be able to solve problems and come up with creative solutions.

Myth: A franchise is a business that can run itself

Reality:  A franchise has a proven system, but it cannot run itself. It needs a strong owner to ensure the system is being followed. That is why finding the right franchise that fits your business style is important. You can launch a ship into the ocean but without the right Captain, it will just float aimlessly.

Myth: The franchise will provide support to prevent failure

Reality:  A good franchise will provide you initial and on-going support to help you become successful. That does not prevent a bad owner from performing poorly.  The owner may ignore the system, they may not put in the hours need to run the business or just may be a bad fit.

Myth: If my business fails, I am only out of my initial investment

Reality:  Your financial losses could be more far-reaching than you think.

  • When starting your business, you may get a loan or take out a second mortgage. If you take out a loan you will need to make a personal guarantee for that loan. If your business fails, you still need to pay off that personally guaranteed loan or you may lose your house.
  • If you leased any equipment, you will still need to make payments
  • If you leased retail or office space, the landlord will still expect you to make payments
  • The franchise will expect you to pay future royalties
  • You may incur litigation costs

Owning a business is not for the faint of heart. There are many risks that you must take into consideration. You must weigh the rewards against the risks.

What are your long term goals? More time with family? Wealth creation? Work for yourself and not others?

If you are willing to put in the time and effort, business ownership can be a path to reaching those goals.

Once you understand the realities of owning a business, the next important step is finding the right fit.

If you would like to explore which franchises are a fit for you, start by completing our Business Profile Assessment: Click Here to Begin

Employee vs. Franchise Ownership

Question about buying a franchise

Employee vs. Franchise Owner Facts and Stats

Not everyone is suited to own their own Franchise.  We have spoken to many people who are perfectly happy working for someone else.  Here are some Facts and Stats you may find interesting.

Employee- Facts & Stats

  1. Average American works >8.5 hours each day. This means more time spent working than:
  • Sleeping
  • Enjoying hobbies
  • Spending time with family and friends
  • A typical 40-year career which consists of working 50 weeks a year, 8.5 hour work days, will mean working 86,000 hours for the average Americans lifetime.
  1. The average American will spend over $600K in interest throughout their working life.
  2. Only 45% of Americans ARE satisfied with their jobs. This means that the majority (55%) of Americans are unsatisfied with their current job.
  3. 16% drop in job-satisfaction in just over 20 years
  • Unsatisfactory rates spring from disappointment in benefits, job stability, and growth
  1. 26% of Employees were dissatisfied with the outlook on potential future promotions (up from 19% in 2008)
  2. Less than 50% of employees were completely satisfied with their job security; with 30% of workers being worried about being laid off in the near future.
  3. Roughly 34% of employees were dissatisfied with the amount of on-the-job stress.
  4. There are currently more workers than jobs. This causes most workers to stay in these less-than-satisfactory conditions.
  5. As an employee, you are capped at contributing $16,500 pre-taxed into retirement fund annually; a business owner can contribute up to $50,000, pre-taxed.
  6. The average account balance in retirement plans according to an Employee Benefit Research Institute (or EBRI) study stated that participants in their 60’s had saved $144,004. Retirees should pull money from their 401k account at a withdrawal rate of 4%/year. When they allowing for an adjustment in inflation, this provides the average 401k holder in their 60’s an annual income of only $5,760, or $480 each month.
  7. The poverty level for 2011 was set at $15,130 (total yearly income) for a family of two or $1,261 a month.
  8. According to the 2010 Census Bureau, 79% of the population is a salary or private wage employee. Of that 79%, only 3.9% were earning more than $200K per year with the average working American sitting in the $50-$75K range.

Business Ownership and Franchise- Facts & Stats

  1. Two-thirds of all American millionaires are business owners.
  2. In a study by Scott Shane, a franchise scholar, the success rate of a franchise (62%) is nearly double that of an independent business (35%) after 4 years of operations.
  3. In 2011, franchise establishments employed nearly 8 million people with 735K units.
  4. “Active” Baby Boomers not quite ready or able to retire are turning to the $1.5 trillion segments of franchise businesses.
  5. As a business owner, you could be making the same amount in your business as in your last employment. However, you can keep more of your earnings with smart & legal tax deductions.
  6. As of 2009, entrepreneurial efforts in the U.S. were at a 14 year high, with 558,000 new businesses being started each month. It’s great for the economy and it’s an excellent opportunity for the business owner. Today, labor is abundant and less expensive, equipment and resources are discounted & real estate and rent is lower.
  7. Based on a study of an entrepreneur followed by the FBA in 2010, the initial investment, such as time, money, commitment, and frustration were all drastically reduced when investing in a franchise versus starting an independent business. The franchise business offers support, provides the opportunity to become passive and also has a considerably shorter learning curve (on average 9 months vs. 2.5 years).
  8. With a franchise, you often have sales assistance available.
  9. Upon purchasing a franchise you are provided an FDD, or Franchise Disclosure Document. This document includes all the background information of the franchise.
  • How many years it has been in business
  • Lawsuits and litigation history of the franchise and its executives
  • Initial and ongoing costs
  • Outlines what the franchisor offers to a franchisee
  • A list of current and former franchisees
  • The franchise financial statement and earnings information when it is available
  1. As a business owner purchasing a franchise you are provided with a complete system. You can be confident in your marketing plan, benchmarks, goals, and support that are required to make your business thrive.
  2. Thousands of franchises are available; some are brand new (under 1 year) and some have decades of industry experience.
  3. There are a plethora of options available with franchise systems. Some franchises allow you to operate out of your home; have or have no employees; have or have no inventory or be a passive owner.
  4. Banks are more likely to loan money to a successful franchise. They are willing to do this for a franchise compared to a start-up business because of a lower risk of repayment default.

The purchase of a franchise is a major decision. You should only make that decision after retaining and consulting with competent legal and business professionals.

www.ProfessionalFranchiseBrokers.com

Works Cited

Employee Facts and Stats

  1. Information can be found in The United States Department of Labor, The Bureau of Labor Statistics

Website

  1. http://www.bls.gov/tus/charts/chart1.pdf
  2. A fact mathematically taken from the chart found on The United States Department of Labor, The

Bureau of Labor Statistics website above.

  1. Sources are cited within the graphic from Credit Loan
  2. http://www.creditloan.com/infographics/a-lifetime-of-debt-the-financial-journey-of-theaverage-american/
  3. Information found on The NY Daily News website
  4. http://articles.nydailynews.com/2010-01-06/news/17944097_1_job-satisfaction-conferenceboard-research-group-lynn-franco and
  5. http://money.cnn.com/2010/01/05/news/economy/job_satisfaction_report/
  6. Information found on CNN Money
  7. http://money.cnn.com/2010/01/05/news/economy/job_satisfaction_report/
  8. These statistics can be found within the Kauffman Index of Entrepreneurial Activity Report
  9. http://www.kauffman.org/uploadedfiles/kiea_2010_report.pdf
  10. This information has been stated on gallup.com, under
  11. http://www.gallup.com/poll/102898/us-workers-remain-largely-satisfied-their-jobs.aspx
  12. This statistic can be found in the chart at http://www.gallup.com/poll/149324/workers-unhappy-healthbenefits-promotions.aspx
  13. This fact is cited in the first paragraphs on
  1. This information can be found in the fifth paragraph on http://www.irs.gov/pub/irs-pdf/p560.pdf
  2. Information about Retirement Savings and 401k’s http://www.mint.com/blog/planning/cheer-up-yourenot-as-far-behind-on-retirement-savings-as-you-think/
  3. The figures are the 2012 HHS poverty guidelines as of January 26, 2012. (Source: http://aspe.hhs.gov/poverty/12poverty.shtml)Monthly percentage data calculated by FHCE and rounded to the nearest dollar.
  4. A Franchise Brokers Association Independent Study

Business and Franchise Facts and Stats

  1. Information can be found in The Entrepreneur Café, LLC website
  2. http://www.ecafellc.com/small-biz-stat/first-generation-entrepreneurs-make-forbes-list
  3. These statistics are stated in the second paragraph under the section titled Independent Small Business

Failure Rates http://www.bluemaumau.org/what_success_rate_a_franchise_versus_independent

  1. This information can be found within the text at http://buyafranchiseblog.com/?m=201101
  2. This statistic can be found in the article at Blue Mau Mau, here: http://www.bluemaumau.org/2006_franchise_trends
  3. This fact is cited in the graph on the Kauffman Foundation website here http://www.kauffman.org/newsroom/despite-recession-us-entrepreneurial-activity-rate-rises-in-2009.aspx
  4. This statement on FDD’s can be found on the FBA website here http://blog.franchiseba.com/franchisenews/need-to-get-your-business-funded-consider-a-franchise/
  5. A Franchise Brokers Association Independent Study
  6. A Franchise Brokers Association Independent Study
  7. This information can be found on the FTC website here http://www.ftc.gov/bcp/franchise/amendedrule-faqs.shtml#26, specifically in points 20-22.
  8. A Franchise Brokers Association Independent Study
  9. This information can be found at http://franchise.org/franchiseesecondary.aspx?id=52630
  10. This information can be found at http://franchise.org/franchiseesecondary.aspx?id=52630
  11. A representative at M&I Bank

The purchase of a franchise is a major decision. You should only make that decision after retaining and consulting with competent legal and business professionals.

 

It is possible for networking to improve your quality of life?

A study by Network Wise (see below)  has shown that networking can improve quality of life. Having a strong social network is an indicator of psychological, emotional and physical wellness. The lack of a social network is connected to poor health and increased risk of mental and physical ailment.

Strong and healthy networks lead to decreases in:

  • Dementia
  • Breast Cancer
  • Premature Death

There is more to networking, and technology is changing everything.

We traditionally think of networking as a chamber of commerce meeting, where you meet in the evening for free drinks, exchange business cards, hanging out and maybe look for a new job. Or people think it may be getting as many LinkedIn connections as possible.

Networking is changing. Network Wise has discovered that networking is used for more than getting a new job. New business opportunities are uncovered, leads are being exchanged, new scientific discoveries are being made. Technology is driving the change. With sites like LinkedIn and Alignable, we can extend our professional networks beyond our local area and with sites like Facebook and Twitter, we are able to drastically increase our social networks.

The are three types of networks: Operational, Personal and Strategic. Operational allows us to engage with people who are central to our business success. Personal allows for socialization and we can seek out mentors and share ideas with Strategic networks.

Online or Face-to-Face?

The answer is both. Even though technology has allowed us to create more far-reaching networks, face-to-face networking is still important. Online networking can increase the size of your network, but face-to-face networking can help you build more meaningful relationships. The goal of an online connection is to gain a face-to-face meeting.

Is there an opportunity to make money?

Networking’s importance increases every day. It is creating more opportunities, growing businesses, and creating jobs. The franchising industry has a way for you to get involved and develop your own groups. Network In Action is disrupting the networking industry. It is using technology to help its franchisees build long-lasting and valuable relationships. They have developed a system that has a low investment and a quick ROI. They give their franchisees the ability to give back to the community and help all its members grow their businesses and not have to sacrifice time.

Click Here to learn more about Network In Action or to start your own networking groups.

 

 

The Art and Science of Networking

Source: NetWorkWise

Tax Benefit of Owning a Business

Owning a Side Business can save you hundreds of dollars every year.

You don’t need to invest hundreds of thousands of dollars to open a business. It doesn’t need to be a full-time business to take advantage of the tax savings. It can be a part-time or side business that may grow to a point where it becomes full-time.

Most people don’t think about owning a business unless it will make them a lot of money. Making a profit is extremely important when starting a business because nobody starts a business with the idea to lose money. It may take two to three years to show a profit and start replacing your salary. But what if you could save money each year with your business while it is making very little profit or no money at all?

There are tax savings involved in running a business that many do not consider. Being an employee is the worst way to save on taxes because Uncle Sam takes a large portion out of your paycheck before you get anything. With a business, you can pay for many things using pre-tax dollars, which can save you hundreds of dollars every year. So, while on paper, your business is not making money, you are getting the savings of buying goods with money that is not being taxed.

Some of the most common deductions include:

  • Home Office Deductions
  • Business Use of Vehicle
  • Equipment
  • Business Trips
  • Health Insurance

Put Up, or Shut Up

What you really what to see are some numbers. According to the Bureau of Labor Statistics (BLS), the average income for a family 2016 was $74,664 and the most common tax bracket is 15%. This means you are paying $11,199.60 to Uncle Sam before you take home $63,363.40. The BLS estimate that the average family has $57,311 in expenditures every year. It is not surprising that the average family is struggling to get by.

Let’s see how much an average American can save by owning a business. We will look some of the expense costs (per the BLS) for the average American family and look at just a few common deductions you could see by owning a business; Auto Mileage, Home Office, Travel, and Equipment.

Transportation

According to the BLS, the average American spends $9,049 on Transportation and drives 13,474 miles per year. Let’s assume you are using 20% of your miles for business purposes. This would allow you to deduct 2,695 miles and with the 2017 IRS mileage deduction of 53.5 cents per mile, you would have a $1,442 tax deduction.

Housing

According to the BLS, the annual expense for Housing is $18,186. By working out of your home, you are able to take advantage of many tax deductions. If you were to assign 20% of your home to dedicated business use, your deduction would be $3,637.20.

What about utilities such as water, gas, electric and a dedicated phone line? The average American will spend about $2,400 on utilities. We will assume a 20% deduction which is a $480 savings per year.

Food

The average American family spends $3,008 on dining out. My wife and I are always discussing our business whenever we eat out. As a result, we expense some of our meals every month. We will assume the average American can expense 20% of their meals. The IRS only allows you to expense 50% for meals and entertainment, this would equal at 10% deduction equal to $300.80.

Travel

Financial experts suggest that the average family spend about 5% of their total income on travel, or $3,733.20. You are not able to deduct the expense for travel that is purely for pleasure, but with proper planning, you can make the trip business related. We don’t have a breakdown of the $3,733.20 (airfare, lodging, food), so we will assume that 70% is deductible. This would give the average American a total deduction of $2,613.24.

Equipment

Thanks to the new tax laws, the Section 179 provision is continued and has increased its threshold. Computer equipment and furnishings can be expensed 100%. If you need a new laptop, printer or desk, you can deduct 100% of that cost the year in which you put it in use. If we were to assume that the average American spends $1,900 on equipment and 20% is used for business, the total deduction would be $380.

How much can I save?

There are many more areas in which a business can save you money and my assumptions are on the conservative side, but if you total up just a few examples we have here:

$1,442.00 + $3,637.20 + $480 + $300.80 + $380 = $6,240.00

Based on an average income of $74,664 in the 15% tax bracket, you would be saving $1,026 per year even if your business is not making any money. Even if the business is part-time.

You will need to document every expense carefully and you should work with an accountant. There are easy to use software programs, such as Quickbooks, that make this process simple. Oh yeah, you can deduct the cost of your Quickbooks software.

Finding a business to suit your lifestyle and budget is not as hard as you think. This is one reason why you should use a Franchise Broker because they have more information than you can find on the Internet.