Tag: affordable franchise

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.

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.

Dirty Words in Franchising

Secret

The Value in the Fees

Just about every time we speak to a person who inquiries about a franchise, they get turned off by the franchise fees, advertising fees, royalties and other fees a franchisor assesses their franchisees.  We get that.  As multi-unit franchisees with about $3,000,000 in revenue – we paid a lot in advertising fees and royalties.  There were a few months during the recession where we paid the franchisor more than we paid ourselves.  Were we angry – yes, if you want to be truthful?  Who wouldn’t be? 

So why not go it alone?  We get people who opt to do that.  We do not suggest that because you have to create a brand and trademark it, set up your operations platform by either finding something out of the box or paying a programmer to customize a system just for you, write your operations manual, write your HR manual, figure out who your ideal employee is (there is an art to finding a person who will fit into your culture), hire an accountant to set up your chart of accounts and figure out how to measure your key metrics, find the right retail or office space and figure out how much you really need, design your space to accommodate the needs of the business and you can see this is a very long run-on sentence that I could continue for at least 10 more lines.  Basically, I just scratched the surface of what your initial franchise fee pays for.  I also did not mention the time it saves.  We all agree time is money and many people run out of money just trying to get those doors to open.  We have seen many “mom and pops” with the coming soon only to see them go out of business in a few months because they spent too much money just trying to open.  To be fair, we have also seen franchises do the same.  Those people were also undercapitalized and did not get a realistic picture from a broker or a franchisor about what it will take to be successful. 

Does $25,000 to $50,000 sound a little bit more reasonable?  Here is another dirty little secret in franchising.  Franchisors lose money in selling the franchise.  They are looking long term in revenue from royalties. 

The next dirty word.

Like I had mentioned, we paid a lot of money in royalties.  To be perfectly honest, the support we received was sometimes very disappointing and we sought outside coaches and advisors.  You may have to do that too.  But what do royalties really get you?  I had mentioned support, but what is more important is the operational platform and backbone to automate and measure your business.  When we sit in on initial calls with our clients, we are always amazed at how much technology is woven into an operating system.  For example, you want to open a handyman business.  Seems simple enough, buy a van, wrap the van, buy tools, stock the van and start marketing.  Cha Ching.  If you bought a  Handyman Connection, for example, you would have their training, be coached through their quick start program, have a call center answer your incoming calls and schedule appointments, when the job is bigger than a simple quote – estimating software, and an Uber backed program that allows your customer to see who is coming and when.   Their software is so granular, you can see exactly where you are making money and where you need to improve your margins instantly.  Knowledge is power in your business.  I also forgot to mention they have national contracts with many retailers, real estate companies, and discounts. 

Still not convinced? 

What is Stopping Your from Buying A Franchise?

Question about buying a franchise

The answer could be fear.

As a franchise broker, we often ask this question and we hear answers such as “There is a lot of competition in this market” or “I don’t know if people are interested in these services” and most commonly “I don’t know if I can make enough money to live on.”

When the smoke clears, it is not about the product or services that are being sold or even the money – it is about fear. The fear of failure. We tell our clients that if you don’t have a little fear, we would be worried. But too much fear can cause decision paralysis. Fear can be a good thing and it has it place – in moderation. Don’t let fear keep you from your dreams.

There are ways to overcome your fear of failure and be able to forge ahead. First, face your fears in order to change your attitude. Secondly, make a plan for success.

Facing your Fear of Failure

When it comes to business, the biggest fear is that you will lose all your money and possessions. Another fear is shame, which can elicit feelings like anger, frustration and regret. Failure does not make you a bad person nor does it physically change you. The fear of losing all your possessions/money is not very likely. You are able to structure your business in a way to limit liability and protect yourself. You will need to know how much money you are comfortable losing in the worst-case scenario. Nothing is ever guaranteed.

There are two things you can do: face the fear and focus on aspects you can control.

Face the fear. Accept that failure makes you afraid and ashamed. Find advisors you can trust and bring these feeling to the surface with them.  This will help prevent your unconscious from sabotaging  your efforts and it will get assurance from them that can bolster your self-worth and minimize the threat of disappointing them.

Focus on the aspects that you can control. For example, worrying about whether people will want your product or service. A franchise can minimize this fear because they have already forged a process that has proven successful to others.

Make a Plan for Success

You already know how to fail by doing nothing. You need to learn how to succeed.

  • Do your research – While you cannot possibly have every piece of information, collecting the most important data will help you make a smarter decision and help alleviate the fear of failing. A franchise has already completed a lot of this information and has used it to makes its franchisees successful. As a broker, we will help you in gathering all the data and information to help you make a smart decision.
  • Create a Plan -Writing a business plan is not easy but it is worth the time and effort. The business plan can act as a roadmap to success. Many franchises have already created business plan templates you can use, you will just need to customize it to your market.
  • Make a Plan B – Making a Plan B is NOT setting you up for failure. It shows that you are a smart business owner. Starting a business is taking a measured risk and by planning accordingly, you can build your confidence in your decisions. Your Plan B does not have to be an alternative course that you take if you fail. It can be a tool to help you consider alternative paths.
  • Get Support – When to starting a business alone you can get stuck in your own self-doubt. You will need a support system to help you on your journey. This is the beauty of a franchise, you are in business for yourself but not by yourself. You are buying into an already existing and successful support system.

My point is that fear is not a bad thing. It can help you be more successful. It can take outside your comfort zone to learn something valuable. Owning a franchise can be one of the most rewarding experiences of your life and we would not want you to miss out just because of a fear of failure.

Our role is to help you through this process and to help you face those fears. As franchise owners for 16 years, we have faced those fears. We had our doubts. But in the end, it was the best decision we ever made.

College v Franchise

Question about buying a franchise

With the cost of a college degree surpassing the annual rates of inflation and the job market is so weak due to a poor economy, it is no wonder why so many young adults graduate with an average debt of $30,000.  The researchers also note that student debt figures could be misleading because colleges/universities may not account for private loans students take out that the school is unaware of. Nationally, nearly 20 percent of all graduating seniors’ debt came from private student loans.

Does graduating from college guarantee you or your children a job?  Not always.  Our economy is a capitalist’s economy and if you graduate with a degree that is in low demand – those college graduates may spend the first few years of their careers underemployed or in a career outside their major.  The problem is – not everyone can be a programmer, engineer or a multi-lingual international business degree graduate.  Plus what is “hot” now may not be in demand in 4 to 5 years.

Why Franchising?  You can be anything in a franchise.  Do you have a passion for children – we have that franchise.  Do you want to be in the hospitality industry – we have that franchise.  Are your interests in helping people – we have that franchise.  Do you like working with your hands – we have that franchise too.

Is starting a franchise expensive?  It can be.  Can you get a SBA Loan to start a franchise?  Yes, you can.  If we had children that were about to go into college, I would ask them about franchising and give them a head start on their peers.  As a business person, I can see a better ROI going the franchise route in today’s economy.

I went to collegedata.com to see what the average cost of tuition, room and board, books, and incidental items were for school year 2013 to 2014 for the average state college.

Tuition                                  $ 8,893

Room and Board               $ 9,500

Books                                    $ 1,207

Incidentals                          $ 2,580

Total Year 1                         $22,180

 

Assuming 3% inflation per year

 

Total Year 2                         $22,845

Total Year 3                         $23,531

Total Year 4                         $24,237

Total for 4 Years               $92,793

 

This cost can be even higher for a private college.  Let’s take an even $100,000 for the cost of a 4 year degree.  This is a lot of money to start a franchise.

 

We have over 300 franchises we represent – from brick and mortar to work from home.  Franchise fees range from $10,000 to over $100,000 (we would not recommend buying a $100,000 franchise for a child).  So which franchise is right for your family?  What are your or your child’s interests, where do you live, what is your credit score, what franchises are available in my area that make sense, does the family have retirement funds to help fund the business, are you or your child mature enough to take on the responsibility of running a business, can you rely on your parents for support and guidance, are you entrepreneurial (we have a test for that)… There are so many questions to be answered and it this a risk you are your family are willing to take?  This is an investment.

 

Why talk to us?  Our job is not to just sell you a franchise.  Our job is to help guide you through the process of possibly buying a franchise.  We have told some people to not buy a franchise because they did not have the time, money, level of commitment, the passion, the credit score, the right market or the support to start a franchise.  Buying a franchise does not guarantee success.  You must evaluate the opportunity and identify all the risks and rewards before investing.

Corporate Visit

Our First and Only Corporate Visit

At the time it seemed to be a waste of time. We understood the concept – non-medical in home care for seniors. We knew it was going to involve managing a lot of people. We knew they had a system in place and other franchisees were successful even though it was a new franchise. We jumped in our car and decided to take a road trip out to Dayton, Ohio to visit Comfort Keepers. Why not combine seeing America and have a little fun on the way (I fell in love with the city of Pittsburgh, it is really a neat city).

We drive up to the office building excited. We were not sure of what to expect and what type of dog and pony show we were about to see. Clustered together with some other couples we were herded into the conference / training room and the founders began to talk about how their company started and the need the fulfilled in their community. We began to relate their experiences with our own family members and saw how we can make a difference in the lives of others. SOLD.

More Research

Were we being too hasty? We had only visited 1 franchise and there was one more like it we knew about. Why not look at the competitor? What was their corporate culture like? We seemed to fit in with Comfort Keepers. Calls were made to some of the franchisees, we asked my Dad, who is a CPA to look at their Profit and Loss and Balance Sheet for us and to give us questions to ask about the soundness of their company.

We still had jobs. We were beginning to hate what we were doing and how we were being treated. The thoughts of taking control of our lives was dominating our conversations. The fear of doing something new would always bring us back to the fact that we still had jobs. One by one our colleagues began to disappear. Mike and I realized the clock was ticking faster and it was time to say yes.

In the beginning

Time for a change

We never looked back

We bought our first franchise (YTD we have owned 6) back in 2001 pre 911. The economy was about to go through a Tech Bubble and we lived in Northern Virginia – just about a perfect storm. There is never a perfect predictorIn th of how outside conditions can influence your outcomes.

I knew my job at US Office Products was going to disappear as we were purchased by Corporate Express and I did not fit their corporate mold and Mike knew his days were numbered as the Tech Startup he worked at was cutting fat in order to be sold (laying off employees with false stock promises). This was in May of 2001.

At that time we began to look at our resumes riddled with jobs that lasted 3 to 5 years and the thought of having to look for another job every few years was most unappealing. That was the beginning of the “new economy.” We needed to break the cycle.

We took inventory of our skills and experiences. We did a SWOT analysis. We searched the internet. We visited some franchise brick and mortars. We researched and researched and then we asked my Dad for advice. We bought a book about franchising and read that cover to cover. Then we began to trust our instincts.

Our personal journey to buying a franchise

Mike and Laura

We never looked back.

We would like to share with you our journey to buying our first franchise with this three part series.

We bought our first franchise (YTD we have owned 6) back in 2001 pre 911. The economy was about to go through a Tech Bubble and we lived in Northern Virginia – just about a perfect storm. There is never a perfect predictor of how outside conditions can influence your outcomes.

I knew my job at US Office Products was going to disappear as we were purchased by Corporate Express and I did not fit their corporate mold and Mike knew his days were numbered as the Tech Startup he worked at was cutting fat in order to be sold (laying off employees with false stock promises). This was in May of 2001.

At that time we began to look at our resumes riddled with jobs that lasted 3 to 5 years and the thought of having to look for another job every few years was most unappealing. That was the beginning of the “new economy.” We needed to break the cycle.

We took inventory of our skills and experiences. We did a SWOT analysis. We searched the internet. We visited some franchise brick and mortars. We researched and researched and then we asked my Dad for advice. We bought a book about franchising and read that cover to cover. Then we began to trust our instincts.

Our First and Only Corporate Visit

At the time it seemed to be a waste of time. We understood the concept – non-medical in home care for seniors. We knew it was going to involve managing a lot of people. We knew they had a system in place and other franchisees were successful even though it was a new franchise. We jumped in our car and decided to take a road trip out to Dayton, Ohio to visit Comfort Keepers. Why not combine seeing America and have a little fun on the way (I fell in love with the city of Pittsburg, it is really a neat city).

We drive up to the office building excited. We were not sure of what to expect and what type of dog and pony show we were about to see. Clustered together with some other couples we were herded into the conference / training room and the founders began to talk about how their company started and the need the fulfilled in their community. We began to relate their experiences with our own family members and saw how we can make a difference in the lives of others. SOLD.

More Research

Were we being too hasty? We had only visited 1 franchise and there was one more like it we knew about. Why not look at the competitor? What was their corporate culture like? We seemed to fit in with Comfort Keepers. Calls were made to some of the franchisees, we asked my Dad, who is a CPA to look at their Profit and Loss and Balance Sheet for us and to give us questions to ask about the soundness of their company.

We still had jobs. We were beginning to hate what we were doing and how we were being treated. The thoughts of taking control of our lives was dominating our conversations. The fear of doing something new would always bring us back to the fact that we still had jobs. One by one our colleagues began to disappear. Mike and I realized the clock was ticking faster and it was time to say yes.

If you would like to begin your journey, we are here to help. Take the first step and complete a no obligation application. We will work closely with you during the entire process to help ensure your selection of the franchise that is right for you.