How to Finance a Business and Pay Yourself a Salary at the Same Time

How To Finance a

Business and Pay Yourself a Salary

At the Same Time!

by Susan Scotts

Do you think that buying a franchise requires a lot of money up front? You might believe you need to keep your day job (or have your spouse cover the household obligations) in order to survive until the customers start coming in and the business ramps up to positive cash flow. But that is not necessarily true. You may be interested to know that you can actually get started sooner than later with fewer out-of-pocket funds than you think. You don’t have to be a Rockefeller or have saved up hundreds of thousands of dollars before you can begin. You can actually start NOW!

It sounds too good to be true: finance and start a business and pay yourself a salary at the same time. While this is not the optimal way to begin, sometimes it’s

the only option. You may have lost your job or transitioned out of the military. You may be single without additional household funds to help. You may have no funds coming in. You have searched, and for whatever reason, you can’t obtain a job offer. Alternately, even if you are well-established financially with lots of liquidity or retirement or savings, you may want to leverage other people’s money to invest.

Setting financial expectations that are reasonable and attainable is really important. If it is not the right time for you now, occasionally your family or friends may want to invest in you or even partner with you. It’s important to understand that many franchise businesses cost less than what a new car costs today, so the investment can be a lot more reasonable than you think. And, with many funding options out there to leverage, no matter how much liquid cash you have or what your credit score is, there may be an option for you.

Many businesses that fail do so because they are undercapitalized. Start by understanding your current total financial picture. Then, explore franchises that are interesting to you and learn about the financial possibilities that the franchise offers. You will have an opportunity to explore what previous owners have accomplished financially, and you may begin to see something that you feel could be a good opportunity for you.

In parallel with exploring the franchise options, begin researching funding options that you may qualify for.

“You don’t have to be a Rockefeller or have saved up hundreds of thousands of dollars before you can begin.

There are opportunities to use your own retirement or thrift savings plan funds to fund the business without going into debt. Alternately, there are Small Business Administration loans that require some liquidity to fund the business as well as other unsecured signature loans that are available with no money down. All three of these options can provide you enough funding to pay the franchise fee, have some working capital -- and even provide enough to pay you a small salary as you ramp up the business!

It’s never the perfect time to begin, but NOW is always the best time to gather the facts and data to learn about the possibilities that will open the doors to owning a franchise. And if you are looking for advice, an alternative career coach can help you step-by-step to become self-sufficient today!

Susan Scotts is a multiple award winning career transition coach with The Entrepreneur’s Source® and possesses three decades of experience in helping empower individuals to become entrepreneurs through franchise business ownership. For a complimentary consultation, she can be reached at 561-859-9110 or SScotts@EsourceCoach.com.

Feature

The Secrets of a Great 5

Franchise System

Exactly what makes a great franchise system? And by great, we mean, what is it that will ensure a franchise system maintains relevancy and endures and even prospers, especially during challenging economic times?

Here are five secrets that we think can go a long way to creating a great franchise system. When looking at a system, be sure that: Being an expert in their industry is critical for a franchisor. The franchisee doesn’t want to do the industry research, and that is probably why they invested in a franchise in the first place. The franchisor needs to understand their industry and be aware of the most recent developments. This includes anticipating future trends or changes in the industry or even foreseeing the products or services that their customers may want. Being able to adopt change and maintain relevance is a critical part of being a franchisor. Think of 1 The franchisor is a subject matter expert (SME)

by Marietta Snetsinger

Blockbuster. The company failed to innovate and adapt its business model to the current trends, which ultimately resulted in their demise. It is critical for the franchisor to be at the forefront of innovation and be able to adapt their franchise system accordingly.

Although the franchisee is the one responsible for implementing the franchise plan in their local market, they may need some guidance and support from the franchisor as they go about it. The franchisor should have already figured out what it takes to implement the business locally and should guide, lead and teach the franchisee how to do that successfully. 2 There is a strong local marketing plan

A strong client acquisition process system is imperative for the success of any business, especially a franchise system. This means that the franchisor has figured out how to get customers to consume their products or, in a service business, how to onboard new customers. In summary, they know how to attract, acquire and retain customers and have a documented process to prove that it works. A franchise isn’t a “build it, and they will come” sort of thing. There is a science to it. It starts with the marketing plan, which is what initially gets the attention of the customer. Once they have the customer’s attention, there’s a proven way to attract, acquire and onboard the customer. From there, the franchisee can implement the customer attraction system in their local market. Understanding what makes their franchise business opportunity unique and different from others is at the core of a UFP. A strong franchisor can articulate what it is that they do differently and better than other franchise systems. It is often a part of how they conduct business and may include a competitive edge around a problematic aspect of their business. For example, a home care concept may have a “secret sauce” around hiring talent. They can easily demonstrate why they are a better option for a franchise investment. 3 4 There is a system to attract, acquire and retain customers The franchisor knows its unique franchise proposition (UFP) There are no secrets to success. It is the result of preparation, hard work, and learning from failure. — Colin Powell “

With more than 20 years of experience in the international franchise industry, Marietta Snetsinger is passionate about establishing solid operational systems and leadership within franchise organizations. She played an important role in developing operational support tools and recruitment strategy with brands including M&M Meat Shops and Baskin-Robbins. She is a well-respected franchise expert and speaks at franchise shows across the country. As the founder of Ascend Franchise Solutions, Marietta works closely with small and emerging franchisors, on a daily basis. Reach out to her at marietta@ascendfranchise.com call 519-212-0309 or visit www.ascendfranchise.com.

A strong franchise system is focused on increasing the profitability and performance of their franchisees and has created a way of tracking and measuring the franchisee’s performance. Think performance and profit improvement vs. policing mentality. A great franchisor focuses on what we all can do to create and attract more business. The franchisor also has a duty to ALL franchisees to manage the brand reputation. Compliance ensures a consistent customer experience and increases the likelihood of a customer continuing to do business with a brand. 5 There are proven performance management and compliance systems in place

Ultimately, building a great franchise system takes commitment, effort and attention to detail. Managing the expectations of the franchise relationship is pivotal to strong and sustainable success.

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Business Trends

From Salesperson to Expert

in 5 Seconds

by John O’Melveny Woods

Writing a book has enhanced my business in ways I could not have foreseen. As a best-selling author, I use my book as a calling card when meeting with potential clients and partners. The book has helped me enhance my online footprint and further established me as the “go-to coach who helps you find your perfect-fit franchise.” Without a doubt, writing a book has had a multiplier effect on my business.

Faizun Kamal

Nationally Renowned Public Speaker and Franchise Coach

When my intro is given at speaking engagements, they stress, “Nancy is the author of nine books on Customer Service.” So yes, I believe it gives credibility to my area of expertise. I use my books mostly for press, exposure and giveaways – and I will say THAT does get me more bookings.

Nancy Friedman, the Telephone Doctor

Keynote Customer Service Speaker and Founder of the Telephone Doctor Customer Service Training

What if there were a way for you to leverage your professional knowledge either as a franchisor or franchisee and affordably get in front of prospects? Without, of course, sending the same old presentations everyone else sends. Would you be interested?

A friend of mine was on a plane, flying first class, and was seated next to the CEO of a Fortune 500 company. They started chit-chatting and finally the CEO asked my friend what he did.

“I’m an event coordinator for large businesses,” he replied.

“Oh… great,” and the CEO started reading an article, completely shutting down the conversation.

“I’ve written a book about the subject,” he continued.

The CEO turned back to him. “Really?”

My friend took a book out of his briefcase and gave it to the CEO. They continued chatting, and he ended up getting all the CEO’s company business. Why?

Because writing a book about your subject of expertise automatically makes you an expert in that field. My friend went from a salesperson to an expert in a few seconds. And you can, too.

First, you’re not writing a manual of what you do. You’re writing a story - a sales story. What do you do that makes you the better choice for your clients? Tell them who you are, why you do what you do and what you have to offer. Include data they will need to make a decision, but provide it in a friendly and persuasive manner. Visualize what your customers need to know about you and your services that sets you apart. Once you have that, the rest will flow.

Second, once you have an idea of your story, make sure you include plenty of success stories. Readers, especially those in a position to make decisions, need to know you are good at what you do. It gives them reasons for choosing between you and someone else. Also include testimonials from others who have used your services and believe in them.

You’ve written your book. Now what?

That’s where choosing a publishing company comes in. Everything about your book must be professional. Find a publisher who is experienced and has proven success. Your publisher should proof your copy, format it and get it pressready. You will need a unique and compelling cover, a website and a social media strategy. Find a pubLastly, write your own book – don’t compare yourself to others. Because of print on demand, the question of book length is no longer relevant. It can be as little as 50 pages or more than 500 pages. My best advice is to make the book as long (or short) as it needs to be to tell your story compellingly. If in doubt, shorter is better.

lisher who can provide these things and work with you start to finish. Before you know it, you will be the subject matter expert!

What next?

You can do it! Separate yourself from your competitors. Take the time to create a book that showcases your talents, expertise and services. Make sure when that CEO’s eyes start to glass over, you have a book to hand them. Your credibility goes up exponentially in an instant. Books are also a great way to make sales calls. “Can I send you a free copy of my book?” You now have a reason to call after they’ve received it. Finally, you can make money with your book at seminars. After your speech, or from your booth, you can refer people to your book for further information.

John O’Melveny Woods owns Intellect Publishing, a full-service, micro-publishing company. He has published more than 100 books and specializes in helping professionals become subject matter experts in the five seconds it takes for them to hand their book to a client. He is also available for speaking engagements. For more information, contact John at info@intellectpublishing.com or visit his website at www.intellectpublishing.com.

Pride

by Elizabeth Denham

Why is Representation Important?

The Franchise Woman is a magazine geared toward women who are on the rise in terms of business ownership and, in particular, franchise ownership. We pledge to tell stories of women doing amazing things in the industry. This includes ALL women. We recognize that representation is a critical element to having a full and robust publication that offers something for everyone. That is why we will cover the newly formed Pride Council of the IFA, and why we will make sure that the LGBTQ community is an important part of that conversation.

Why is this important? As Michael Morgan, a former professor emeritus at the University of Massachusetts at Amherst and a researcher on media effects, told the Huffington Post earlier this year, “When you don’t see people like yourself, the message is: You’re invisible. The message is: You don’t count. And the message is: ‘There’s something wrong with me.’” He continued:

Policy & Pride

“Over and over and over, week after week, month after month, year after year, it sends a very clear message, not only to members of those groups, but to members of other groups, as well.”

If you are an LGBTQ community member in franchising and would like to tell your story, please contact me directly at elizabeth.denham@ thefranchisewoman.com

In the Know

The IFA praised the U.S. Department of Labor (DOL) for its release of the Joint Employer Rule under the Fair Labor Standards Act. By instituting a simple, four-part test to determine employer status, the DOL rule can clarify joint employer status, employer liability, and the roles and responsibilities of each party in a business relationship. Learn More

The IFA has hailed the National Labor Relation Board’s decision in a years-long joint employer case against McDonald’s corporation. The decision found that McDonald’s Corporation did not behave as a joint employer with its franchisees. The case began in 2014, and a joint-employer finding could have held McDonald’s liable for the actions of its franchisees and forced the corporation to bargain with franchise workers who formed a union. Learn More

The IFA announced on February 11, 2020 that Daniel Halpern, CEO and Co-founder ofJackmont Hospitality, is the 2019 recipient of the

Ronald E. Harrison Award. As CEO ofJackmont Hospitality, Daniel Halpern has seen his group become one of the most successful multi-unit franchisees of TGI Fridays, winning multiple brand awards. Most recently, Jackmont was recognized as both the Best Operator of the Year and Best General Manager of the Year in 2019 by their franchisor. Jackmont is proud of the diversity of both their leadership team and their staff, who together form an exemplary team. Learn More