14 PENNIES ON THE DOLLAR
32 FOR BETTER OR FOR WORSE
42 CRASH COURSE
Franchise SU M M ER 2007
America’s Resource For Entrepreneurs and New Businesses
MARKET MAGAZINE
100 UNDER
100K The best low-investment franchises
Contents Summer 2007
Franchise [MARKET MAGAZINE ]
21
100
14
UNDER
100K
The best low-investment franchises
$
Aiming For Succession
38 4
Franchise
Summer 07
Succession planning is an important part of business — and something most entrepreneurs aren’t good at.
Pennies On the Dollar There are dozens of franchise opportunities that you can leverage for $100,000 or less and they are proving that low-cost doesn’t mean low-return.
32
For Better Or For Worse? For career-minded couples, building a business together can be romantic … or is it?
Franchise [MARKET MAGAZINE ]
52 8 From the Publisher
42 Crash Course?
Franchise options that won’t break the bank.
SBDC in-depth clients generated $6.1 billion in new sales.
Business Builders
47 What is the
60 Women
10 Would You Make A Good Franchisee? Do you have what it takes to start a franchise. Here is a checklist and guidelines to help you find out.
Business Owners Women entrepreneurs are changing the face of America’s economy.
48 Growin’ Market
64 Closing Quotes
Pyramid Consulting, a small-business weathering times of economic change.
Summer 07
SCORE helps entrepreneurs build their business plans.
SBDC in-depth clients generated $6.1 billion in new sales.
54 SBDC Success Story
Franchise
55 Score
ASBDC Network?
Dunkin’ Donuts is expanding in the Florida Market.
6
Checking Franchisor Finance Stability
Quotes from those who have been there, done that.
HOME
Finding the Right Franchise Online
FRANCHISES PRODUCTS MAGAZINE INTERVIEWS ADVICE EVENTS FRANCHISE SEARCH BY INVESTMENT SEARCH FOR CONSULTANT
INTERVIEWS
“Read Interviews With Top CEOs From Major Franchisors” READ FIRSTHAND WHAT MAKES THEIR BUSINESS OPPORTUNITIES WORK.
Go to: www.franmarket.com for details.
FIND A FRANCHISE
FIND FRANCHISE EVENTS www.franchiseshowinfo.com Tampa/Orlando, FL September 8 & 9, 2007 Philadelphia, PA September 15 & 16, 2007 Charlotte, NC September 29 & 30, 2007 Boston, MA October 13 & 14, 2007
www.wcfexpo.com Los Angeles, CA October 19 - 21, 2007 www.franchiseexposouth.com Miami, FL January 11 - 13, 2008
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7
FROM THE PUBLISHER
Franchising Options that Won’t Break the Bank When I accepted the position of Publisher of Franchise Market Magazine, I realized I had my work cut out for me. My predecessor, Bob Dallas, set the bar high. But I shall do my best to continue FMM’s tradition of bringing its readers valuable information and relevant stories on the franchise industry. So, in order to do just that, we’re featuring our list of the top low-investment franchises. To many, money is a major hurdle standing in the way of obtaining the personal satisfaction that comes with owning a franchise. But there is very good news…it doesn’t have to be. That’s why we put together this ranking, to illustrate the fact that owning a franchise doesn’t have to cost you an arm and a leg. And even though you’re not investing hundreds of thousands of dollars, you can generate nice profits through these lowcost franchises. Make sure to read Jennifer LeClaire’s article in this issue. She does a great job of dispelling some common franchising myths. In this issue, we’re also bringing you an article on the importance of backing up your company’s data. It is critical to your business’ survival that you have an effective plan for protecting your information. We’ll show you how to put a plan in place that will protect your business for years to come. There are other helpful stories, as well as information on the Small Business Administration and how they can help you reach, and surpass, your goals as an entrepreneur. Do yourself a favor and read all of the articles and save each issue. What might not apply to you now, could very well come in handy in the future.
Editor Art Director Managing Editor Assistant Art Director Production Manager Contributing Writers
Robert Pitts Ron Palfrey Michelle Jerla Mary Nason Diane Traylor Carolyn Heinze Jim Walker Jennifer LeClaire Rhonda Sanderson Michael H. Seid Kay Marie Ainsley ______________________________________ Publisher
Matt Russell mrussell@reni.net
Research Manager Advertising Director
Cheryl Watwood Matt Russell mrussell@reni.net Nicky Harvey Martha Theriault Kenna Rogers
East Coast Ad Manager Midwest Ad Manager West Coast Ad Manager
For Advertising Information: The Victoria Group Victoria Conte, President 401-421-7239 13victoria@cox.net ___________________________________________
Webmaster Advertising Director
Jay Hook Matt Russell mrussell@reni.net
Internet Sales
Deanna Pearce dpearce@franmarket.com ___________________________________________
Also, we’ll be redesigning our website, www.franmarket.com, in the near future. So check in from time to time and see what’s new. We will continue to strive for excellence when it comes to providing you with the information you need. All the best, Franchise Magazine is published quarterly by RENI Publishing, Inc. 150 3rd Street SW, • Winter Haven FL 33880 Telephone: 863-294-2812 Fax: 863-299-3909 President & CEO Group Publisher Operations IT Services
Matt Russell Publisher
Joe Jensen Jim Phillips Denise Harwell Jay Hook
_________________________________________________ Information in this magazine is subject to change without notice. While every reasonable effort has been made to ensure that the information was accurate as of publication date, RENI and its employees, agents, clients and distributors shall not be liable for any damages arising from the use of or reliance on the information contained in this publication or from omissions to this publication. _________________________________________________
8
Franchise
Summer 07
MICHAEL H. SEID AINSLEY
AND
KAY MARIE
F O R STA RT E R S
WOULD YOU MAKE A
GOOD
FRANCHISEE?
CHECKLIST PROVIDES INSIGHT INTO MAKING THE DECISION — BY RHONDA SANDERSON
Franchising is a huge part of the American lifestyle, especially when one considers that a new franchise business opens every eight minutes of every business day. One of the main advantages of buying a franchise is the support system that comes with it. But with that being said, it doesn’t mean you don’t have to work to become successful. Becoming a successful franchisee requires more than giving your money to a franchise system.
Case in point, franchisee John Cummings came from a corporate background with Bristol-Myers Squibb. After accepting a lucrative buyout package from the company after Proctor and Gamble bought the division he was in, John went in search of a business for himself. He took one year to find PostNet, the Denver-based franchise that serves as a total small business solutions provider with more than 900 locations worldwide.
See Checklist On Page 12 10 Franchise
Summer 07
F O R STA RT E R S
HOW DO YOU KNOW IF YOU’RE FIT TO BE A FRANCHISE OWNER? FOLLOWING ARE SOME THINGS TO CONSIDER
:
Make sure you know what it means to be in business for
yourself. Make sure that franchising is for you vs. working for somebody else. It’s entirely different. You don’t have the luxury of knowing you’re going to have a regular paycheck coming in, but you will now be in charge of your own destiny. It’s a trade-out many are ready to consider.
Have the support of your family. This is a major decision in
DO YOUR RESEARCH SO YOU UNDERSTAND THE PLUSES AND MINUSES OF THE BUSINESSES.
your life. It affects your family. You wouldn’t buy a house without your wife looking at it and agreeing with you. You shouldn’t buy a business without your spouse being involved in the decision process.
Can you visualize yourself running your own business?
Many franchise candidates come from corporate cultures where many duties have been delegated. Those responsibilities are now yours. Are you comfortable wearing many different hats?
Are you willing to work more than 40 hours a week? In the early stages of a business, many new franchise owners spend nearly 80 hours a week building their business.
Can you follow a system or are you one who likes to blaze
your own trail? One of the reasons franchising works is because of the systems set in place by the franchisor. If you’re not willing to follow the systems, franchising is not right for you.
There is no correlation between what your investment is and
how well you will perform. That’s important because when you are doing your research, you will find many franchises with varying start-up costs. Yet that doesn’t mean you will earn more in the costlier concept. Do your due diligence and choose based on something you will love doing!
Research, research, research. Talk to other franchisees and make sure you understand both the pluses and minuses of the business.
Think out of the box. Think longer term than what’s going to
happen tomorrow. Think about where you’re going to be five years from now.
Are you a good salesperson? If you are not comfortable with cold calling and selling your service or product, chances are this isn’t for you. Or you need to be prepared to hire an employee solely for that purpose.
Have
you created an “ideal characteristics” model of what you’re looking for in a franchise? Don’t just throw a dart at the wall or choose a concept because it’s the hottest trend or a friend’s recommendation. It’s a poor way to select a business.
12 Franchise
Summer 07
Franchising thrives in the United States today because it benefits both the franchisee and franchisor. Many start-up companies are failures. Most small businesses fail because of weak management. Studies have shown that 90% of new businesses fail within three years. But franchisees benefit from a franchisor’s managerial expertise. In turn, franchisors are able to achieve rapid growth either locally, regionally or nationally. A trend that is gathering more speed is the popularity of multiunit franchising. While there are still many “mom and pop” franchisees that operate only one outlet, there are a growing number of franchisees who own and operate more than one outlet. One study found that more than 80% of franchisors had multiunit franchisees. Franchises are prevalent in almost every industry and encompass more than 150 categories. Whether a franchisee is looking for a pure retail opportunity or a business-to-business franchise, there is a franchisor that fits their need. —FMM
Rhonda Sanderson (www.sandersonpr.com) is founder and president of Sanderson & Associates, a Chicago-based public relations firm specializing in franchising.
LOW - CO ST F R A N C H I S E
PENNIES DOLLAR Discover solid opportunities for the budget-minded entrepreneur
ON THE
There’s a myth in the world of franchising. It sounds something like this: You need at least a quarter of a million dollars to buy into the game. It’s true that your total investment to open up a Shoney’s could be more than $2 million. It’s also true that getting into a McDonald’s franchise can cost you a cool $750,000. — By Jennifer LeClaire
However, the good news is there are dozens of franchise opportunities that you can leverage for $100,000 or less. In fact, there are also plenty of home-based service franchises for $10,000 or less. It may surprise you to learn that you can even become the proud owner of a Subway restaurant for as little as $75,000 in some markets. Indeed, from cleaning services to real estate shops to fitness centers and beyond, entering the world of franchising is more affordable than you might think.
LOW - CO ST F R A N C H I S E
“LOW-COST FRANCHISES ARE OFTEN LOW-COST BECAUSE THEY DON’T REQUIRE MUCH FURNITURE AND EQUIPMENT. THE CONCEPT IS TAKING OFF.” — Sharad Mehta, president of Tannenbaum & Aalok
“There is a ton of opportunity today with home-based franchises that rely on service vehicles to meet the needs of clients, as well as facilities like Curves that don’t require a lot of the entrepreneur’s time,” says Sharad Mehta, president of Tannenbaum & Aalok, a business brokerage headquartered in Cherry Hill, N.J.”Low-cost franchises are often
low-cost because they don’t require much furniture and equipment. The concept is taking off.”
Cases In Point To Mehta’s point, there are low-cost franchises that target pet owners - like DoodyCalls, a full-service pet waste
removal service, and FETCH! Pet Care, a pet sitting and dog walking service. Likewise, sports and fitness franchises, like i9 Sports, an amateur youth organized sports league service, and Curves, a workout facility targeting women, are also gaining momentum. Of course, some low-cost franchises carry more name recognition than others. Jackson Hewitt Tax Service, for example, rates as Entrepreneur magazine’s best low-cost franchising opportunity, best tax preparation franchise, third overall franchise opportunity and sixth-fastest growing franchise. The company is also No. 1 on Franchise Market Magazine’s list of top low-cost franchises. Tax franchises perform well in the low-cost category because accounting concepts don’t require much retail square footage or expensive equipment to get up and running. Richard Morris, vice president of sales and development for Parsippany, N.J.based Jackson Hewitt Tax Service, says Jackson Hewitt is a popular franchise, in part, because the tax business is somewhat recession-proof. “It’s like they say, death and taxes are a certainty,” he quips. “Our franchisees do most of their business in four months out of the year, so labor costs are low the other eight months.” Jackson Hewitt’s franchise fee ranges from $10,000 in small markets to $25,000 in large markets. That fee includes multimillion-dollar marketing support, professional tax and software support, and management training. By contrast, Jani-King International Inc., a commercial cleaning franchise based in Addison, Texas, boasts franchise start-up costs that range from
16 Franchise
Summer 07
about $4,000 to $36,000. As such, JaniKing ranks No. 2 on Franchise Market Magazine’s list of top low-cost franchises. One of Jani-King’s draws is the ability to start part-time in franchising. The model also allows entrepreneurs to work from a home office, further reducing start-up costs. “Jani-King was built on the premise that we would offer a low-cost investment opportunity to anyone who was willing to work hard and build their business by following a franchise system,” says Jerry Crawford, president of Jani-King. Meanwhile, Kumon Math and Reading Centers targets a completely different audience: students who have math and reading challenges. Kumon offers a curriculum and instruction method designed to help a child gradually develop fundamental math and reading skills. Kumon franchise fees range from $30,000 to $110,000, putting it No. 14 on Franchise Market Magazine’s list of top low-cost franchises. Like Jackson Hewitt, Kumon’s concept avoids expensive machinery. The company relies on paper, pencils and instructors, according to Deven Klein, vice president of franchising for Teaneck, N.J.-based Kumon North America. “We keep franchise fees low because we want people to benefit from the Kumon educational mission,” he says. “Our franchisees are not only making money, they are making a positive impact on society.”
Turning A Profit So now it’s clear that there are plenty of low-cost opportunities in franchising. Still, there is yet another myth in the franchising world: low-cost franchises offer low returns. Or, put another way, the less you invest the less you make. What that myth doesn’t take into account is the time, skill and, well, blood, sweat and tears the owner puts into the business. Low-cost service-oriented franchises may not draw the same revenues as a McDonald’s or a Burger King, but the
FRANCHISE MYTH: THE LESS YOU INVEST THE LESS YOU MAKE. WHAT THAT MYTH DOESN’T TAKE INTO ACCOUNT IS THE TIME, SKILL AND, WELL, BLOOD, SWEAT AND TEARS THE OWNER PUTS INTO THE BUSINESS.
LOW - CO ST F R A N C H I S E
to learn and have the drive to succeed, there is no limit on what you can achieve with Jani-King.”
Show Me The Money All you need now is the working capital to prove your metal. If you aren’t sitting on hoards of cash, then you’ve got two options: traditional and nontraditional financing. Since franchises historically have a lower failure rate than non-franchised models, franchisee-status offers you a head start in your quest for financial backing. Add to that a healthy credit score and a solid business plan, and it’s likely that you can win the heart of a lender or private investor.
profits can be significant, according to Mario Altery, president of the Upside Group, a franchise consultancy in Phoenix, Ariz. “In this day and age, you can expect to get as much out of your franchise as you put into it,” Altery says. “Since franchises handle the marketing aspects of building the business, entrepreneurs can put more time into serving customers and growing the business.” Franchisors are not legally permitted to disclose franchisee revenues, and, again, profits vary widely from industry to industry and even from franchisee to franchisee. A franchised brand doesn’t guarantee profitability if the owner has poor management skills, poor customer service, and a poor work ethic. However, Jani-King’s Crawford points out that there is plenty of opportunity for profits. “Potential customers exist in every city hotels, hospitals, office buildings, schools, retail stores, grocery stores, restaurants, and the list goes on,” he says. “If you’re willing
18 Franchise
Summer 07
Lenders, typically banks, let you borrow money with interest. Private investors, on the other hand, take a percentage of your business in exchange for funds. Small Business Administration, or SBA, loans are a popular avenue and may offer more favorable rates than traditional bank loans. On the non-traditional side of the funding fence, hopeful franchisees can tap into credit cards, friends and family, home equity loans, or 401(k) funds. Of course, there are drawbacks to each option. Credit card debt often comes with high interest rates, friends and family may offer the money with unwanted strings attached, home equity loans put your very dwelling at risk, and tapping into 401(k) funds puts your future in jeopardy if the business folds.
“What you need to realize from a financial perspective is that you need a fair amount of capital beyond the initial investment,” Jackson Hewitt’s Morris stresses. “One of the worst things you can do is to go in undercapitalized. You need working capital for payroll and to pay expenses during that first year, or you could find yourself in a pinch.”
A Low-Cost Stepping Stone For entrepreneurs with big visions, lowcost franchises can be the entryway to business empires. The low-cost licensing and start-up fees can make it possible to open multiple franchises with the same brand or multiple franchises of different business types. One low-cost franchises success can fund the next low-cost franchise success. Or it could lead to larger opportunities. “Low-cost franchises can definitely be a stepping stone to larger franchises,” Mehta says. “If you can invest $50,000 in an opportunity and make it successful today, then you can learn the ropes, achieve success and work your way up to even more profitable opportunities. Success is in your hands.” —FMM
Jennifer LeClaire is a freelance writer based in Hallandale Beach, Fla.
100 UNDER
100K
The best low-investment franchises
In this, the summer issue of Franchise Market Magazine, we’ve gone to great lengths to provide you with the best lowinvestment franchise opportunities available. We’re talking about the top 100 under $100,000. Nearly every sector of the franchise industry is represented in our ranking. You’ll see some names that are familiar and others that you’ll have to take some time to investigate. But we believe it will be worth the effort. That’s the beauty of franchising. There is
$
truly something for everybody. If you’re willing to do the homework and research, you’ll find a franchise that will inspire you to do great things. If you know what you’re passionate about, chances are there is a franchise that will cater to that passion. So take some time and dig into the ranking that we’ve provided. Visit the websites, request information and ask questions. What’s great about these particular franchises? Your last name doesn’t have to be Gates or Walton to own one.
www.franmarket.com
21
100 Franchises under 100K FRANCHISE FEE
FRANCHISE
DESCRIPTION
1. Jackson Hewitt Tax Service
Over 6,500 locations providing full service individual federal and state income tax preparation. The company is based in Parsippany, NJ.
25,000
49,000 - 92,000
1986
2. Jani-King
Commercial cleaning franchise company. Jani-King provides training, local support and guaranteed customer contracts.
8,600
8,600 - 8,600
1974
3. Merle Norman
Founded in 1931, today’s Merle Norman is an innovative company whose rich heritage sets the stage for a promising future.
0
29,000 - 162,000
1989
4. Curves
Complete workout including: Warm-up, Aerobic exercise, Strength training, Cool down, and Stretching.
39,900
65,000 - 65,000
1995
5. Bonus Building Care
Commercial cleaning. Turn-key operation, with customers, training, operations assistance, equipment, business insurance and clerical support.
6,500
7,750 - 13,449
1996
1,000
2,980 - 33,130
1983
Dance-fitness program with more than 6,800 franchised instructors worldwide.
6. Jazzercise
INVESTMENT RANGE YEAR STARTED
7. JAN-PRO International
Commercial cleaning franchise in the U.S. and internationally, with over 5200 unit franchisees.
950
5,000 - 200,000
1991
8. RE/Max
Real Estate. Agents are in charge of their own business, split office expenses equally with other agents and operate under a maximum commission concept.
12,500 - 25,000
25,000 - 199,000
1975
9. CleanNet USA
Offers a variety of cleaning services for commercial, retail and industrial facilities in financial, hospitality, medical and other industries.
2,950 - 32,000
3,900 - 35,600
1988
10. Service Master Clean
Janitorial contract cleaning including carpet, hard surface floor, upholstery, window and speciality cleaning services.
29,000
41,031 - 59,450
1947
11. Chem-Dry
Carpet and Upholstery Cleaning Franchise, A Division of The Home Depot.
12,950
28,000 - 84,000
1977
12. Liberty Tax Service
Liberty Tax Service provides a franchise support system for computerized and online individual tax preparation.
34,000
35,350 - 63,900
1997
13. Coverall Cleaning Concepts
Cleaning commercial cleaning franchise company with nearly 50,000 customers and a network of 90 Support Centers worldwide.
6,000
6,000 - 32,200
1985
14. Kumon North America, Inc.
Kumon Math and Reading Center franchises are ranked Top Tutoring Franchise 2002-2007.
1,000
30,401 - 110,290
1958
15. Heaven’s Best Carpet and Upholstery Cleaning
Low-moisture process allows carpet to be dry within one hour.
24,900
14,900 - 65,900
1983
1,990
15,000 - 175,000
1993
16. Hot Stuff Foods
Provider of turn-key food solutions to the “foods on the go” segment.
17. Budget Blinds
Franchise offers customers free in-home consultations, taking measurements and selling a variety of name brand window coverings. The company also handles installations.
24,900
79,700 - 153,100
1994
18. Vanguard Cleaning Systems
Commercial Cleaning Franchise. Training, support, equipment, and accounts provided. Master Franchise territories also available.
7,000
2,300 - 33,000
1984
19. Merry Maids
Franchise specializing in residential cleaning.
29,000
26,350 - 57,450
1980
20. Results Travel
Provider of turn-key food solutions to the "foods on the go" segment.
1,500
25 - 10,700
2000
Jackson Hewitt Tax Service® has been the #1 tax preparation franchise for 14 consecutive years, and is now the #1 low-cost franchise (Entrepreneur magazine Franchise 500). Our franchisees receive ongoing training, operational support, proprietary tax software, technology services, national and regional advertising, and marketing assistance. Visit www.jacksonhewitt.com to learn more.
22 Franchise
Summer 07
Jani-King is the world’s largest commercial cleaning franchise company with more than 12,500 franchise owners in 20 countries. Through a network of more than 120 regional offices, Jani-King contracts commercial cleaning services with the work performed by franchisees who are supported by administrative, account sales and operations personnel from a local regional office. For more information, call 1.800.JANIKING, or visit www.janiking.com.
www.franmarket.com
THE BEST LOW-INVESTMENT FRANCHISES CONTACT
STREET ADDRESS
CITY
STATE
ZIP CODE
Doug Machovic
3 Sylvan Way, 3rd Floor
info@janiking.com
Parsippany
NJ
07054
800-475-2904
www.jacksonhewitt.com
16885 Dallas Parkway
Addison
TX
75001
800-526-4546
www.janiking.com
Studio Development
9130 Bellanca Avenue
Los Angeles
CA
90045
800-421-6648
www.merlenorman.com
Joseph Piller
100 Ritchie Road
Waco
TX
76712
800-848-1096 ext: 2221
www.curves.com
Perry White
P.O. Box 300
Indianola
OK
74442
918-823-4990
www.bonusbuildingcare.com
Tomi Kagei
2460 Impala Drive
Carlsbad
CA
92010
760-602-7119
www.jazzercise.com
Emily Akeman
11605 Haynes Bridge Road
Alpharetta
GA
30004
678-336-1780
www.jan-pro.com
Franchise Development
P.O. Box 3907
Englewood
CO
80115
800-525-7452
www.remax.com
Franchise Development
9861 Broken Land Pkwy., #208
Columbia
MD
21046
800-735-8838
www.cleannetusa.com
David Messenger
3839 Forest Hill Irene Road
Memphis
TN
38125
901-597-7574
www.ownafranchise.com
Elise Hansen
1530 North 1000 West
Logan
UT
84321
877-307-8233
www.chemdry.com
Kelly Wyatt
1716 Corporate Landing Parkway
Virginia Beach
VA
23454
877-285-4237
www.libertytaxfranchise.com
Jack Caughey
5201 Congress Avenue, Suite 275
Boca Raton
FL
33487
561-922-2500
www.coverall.com
Deven Klein
300 Frank Burr Blvd.
Teaneck
NJ
07666
866-633-0740
www.kumon.com
Cody Howard
247 N. 1st East
Rexburg
ID
83440
800-359-2095
www.heavensbest.com
Franchise Development Specialist
2930 W. Maple, P.O. Box 85210
Sioux Falls
SD
57118
605-336-6961
www.hotstufffoods.com
Franchise Development Specialist Will Greene
1927 N. Glassell Street
Orange
CA
92865
800-420-5374
www.budget-blinds-franchise.com
655 Mariners Island Blvd., Suite 303
San Mateo
CA
94404
650-594-1500
www.vanguardcleaning.com
Vickie Alexander
P.O. Box 751017
Memphis
TN
38125
800-798-8000
www.merrymaids.com
Franchise Development Specialist
701 Carlson Parkway
Minneapolis
MN
55459
888-523-2200
www.resultstravel.com
TSS Photography has been the leader in Youth, School & Sports Photography for 24 years. We specialize in Team Picture Days, Sports Photography, School Photography, Special Events and Tournament Photos. Our unique opportunity offers comprehensive training, national alliances, a marketing Growth Fund, Franchisee Advisory Panels, and much more all without royalties! Call us at 866.877.4746, or visit our website: www.tssphotography.com
PHONE
WEBSITE
With our proven business model, you provide Ident-A-Kid cards to parents through schools and other locations from your home-based office. The cost of the franchise is $34,900 and includes an exclusive territory, equipment, supplies, proprietary software, inventory and comprehensive training. Call 800-890-1000 or go to: ident-a-kid.com for more information.
www.franmarket.com www.franmarket.com www.franmarket.com
23
100 Franchises under 100K FRANCHISE FEE
FRANCHISE
DESCRIPTION
21. Sign-a-Rama
A full service sign center, with 850 locations worldwide.
42,500
43,000 - 145,000
1987
22. AmeriSpec Home Inspection Services
AmeriSpec business owners have conducted over 1.5 million home inspections.
29,900
60,000 - 90,000
1987
23. WSI Internet Marketing
Provider of Internet Solutions to small and medium sized businesses the world over.
49,700
58,350 - 163,150
1995
24. Home Instead Senior Care
Provides non-medical senior care with more than 700 offices worldwide.
27,500
42,000 - 52,000
1995
25. CruiseOne
Home based Cruise Travel Agency. Can be worked from Home, Office or a Storefront. Franchise fee includes 8 days training at our Ft. Lauderdale Headquarters.
9,800
9,800 - 25,000
1992
26. Coffee News
Weekly restaurant publication distributed to restaurants and the hospitality industry free of charge.
7,500
8,500 - 8,500
1996
27. National Property Inspections
Residential and commercial property inspection franchise.
23,800
25,000 - 28,000
1987
28. Assist-2-Sell
North America’s Leading Discount Real Estate Company.
25,000
50,000 - 101,500
1996
29. Candy Bouquet
Floral-like designer gifts and gourmet confections.
16,000
10,000 - 3053,000
1993
30. Home Helpers
Senior Care Franchise throughout North America. Known for its marketing, innovation and creativity.
28,900
41,700 - 73,300
1997
31. ProForma
Business-to-Business franchise in the $150 billion print and promotional product industry.
19,500
2,500 - 32,000
1978
32. Cruise Planners
Sell Travel From Home- Full Support- Marketing- Websites- Join a Leading Agency in the Industry
9,995
1,895 - 20,000
1999
33. Comfort Keepers
Non-medical in-home care for the elderly and others who need assistance with daily living activities.
32,500
56,000 - 88,000
1999
34. INTERIORS by Decorating Den
The Interior Decorating Franchise chosen as “Best of the Best” by Entrepreneur Magazine.
29,900
49,900 - 69,900
1970
35. System4 LLC
Home Based Commercial Cleaning Franchise. We provide the Customers, Training and the Equipment.
4,400
1,400 - 75,000
2004
36. M.A.R.S. International
M.A.R.S. mobile operators restore pride in vehicles of any age.
15,000
500 - 146,000
1998
37. Contours Express –
America’s #2 Women’s circuit training Gym franchise featuring Real Weights for Real Results.
18,000
55,000 - 95,000
1998
38. Club Z! Tutoring Services
Provide one-on-one, individualized instruction for students and business professionals in the comfort of their home or office at an affordable rate.
24,500
32,000 - 65450
1998
39. ComForcare Senior Services
Non-medical Home Care Services for All Ages.
24,500
53,000 - 73,000
1996
40. Pillar to Post
Home Inspection Franchise company ranked #1 opportunity in category for past 5 years by Enterpreneur Magazine.
19,900
39,900 - 75,000
1994
The Better Idea in Women’s Gyms
EntryPoint, a home improvement leader, is a growing chain of decorative doorglass showrooms. EntryPoint sells and installs decorative doorglass into the existing doors of homeowners would like to add natural light and beauty to their entryways. Use of the existing door with over 50 patterns to choose from as well as custom patterns keep prices reasonable. Contact us at 888.99.ENTRY, or visit www.EntryPointGlass.com
24 Franchise
Summer 07
INVESTMENT RANGE YEAR STARTED
As America ages, a major opportunity opens up in the booming Senior Care industry. Caring Transitions is the leader in helping Seniors move and helping families liquidate unnecessary belongings when a loved one becomes ill, moves to assisted living, or passes away. It’s the next huge wave in Senior Care. 800.647.0766 www.CaringTransitions.net inquiry@CaringTransitions.net
THE BEST LOW-INVESTMENT FRANCHISES CONTACT
STREET ADDRESS
CITY
STATE
ZIP CODE
Bernice Cullen Carley
2121 Vista Parkway
Ken Perkins
3839 Forest Hill Irene Road
West Palm Beach
FL
33411
800-286-8671
www.signarama.com
Memphis
TN
38125
901-597-8508
www.amerispecfranchise.com
Franchise Development Team 5580 Explorer Dr, Suite 600
Mississauga
ON
55555
888-678-7588
www.wsicorporate.com
Tim Connelly
13330 California Street, Suite 200
Omaha
NE
68154
888-484-5759
www.homeinstead.com
Gene Brezenoff
1415 NW 62 Street, Suite 205
Fort Lauderdale
FL
33309
800-892-3928
www.cruiseonemovie.com
John B. Buckley
100 Devon Street
Portland
ME
04102
207-879-0038
www.coffeenewsusa.com
Julie Erickson
9375 Burt Street, Suite 201
Omaha
NE
68114
800-333-9807
www.npiweb.com
Ryan Elliot
1610 Meadow Wood Lane
Reno
NV
89502
800-528-7816
www.Assist2Sell.com
Gina McNabb
423 East Third Street
Little Rock
AR
72201
501-375-9990
www.candybouquet.com
John Buckles
10700 Montgomery Road, Ste.300
Cincinnati
OH
45242
888-876-3144
www.HomeHelpers.cc
Joe Chandler
8800 East Pleasant Valley Road
Independence
OH
44131
800-825-1525
www.connectwithproforma.com
Diane Chiafair
3300 University Drive, #602
Coral Springs
FL
33065
888-582-2150
www.beacruiseagent.com
Jim Brown
6640 Poe Avenue Suite 200
Dayton
OH
45414
888-801-1121
www.comfortkeepers.com
Kevin V. Atkinson
8659 Commerce Drive
Easton
MD
21601
877-918-1500
www.decoratingden.com
Cary Reed
10060 Brecksville Road
Brecksville
OH
44141
440-746-0440
www.System4usa.com
Recruiting Department
P.O. Box 201905
Arlington
TX
75050
800-230-4106
www.marsrecruits.com
Bill Helton
156 Imperial Way
Nicholasville
KY
40356
859-885-6441
www.ContoursExpress.com
Mark Lucas
15310 Amberly Drive, Suite 185
Tampa
FL
33647
800-434-2582
www.clubztutoring.com
Brigite Betser
2510 Telegraph Road, Suite 100
Bloomfield Hills
MI
48302
800-886-4044
www.ComForcare.com
Gordon Williams
14502 N. Dale Mabry Hwy., Ste. 200
Tampa
FL
33618
877-963-3129
www.pillartopost.com
Entrepreneur Magazine ranked Home Helpers as the #1 Senior Care Franchise for the second year in a row and “The Best of the Best”! You’ll provide non-medical care to seniors, new mothers and those recuperating from illness. With over 500 offices and 20 years of franchising expertise, Home Helpers is the undisputed leader in the booming senior care industry. (800).216.4196 www.HomeHelpers.cc inquiry@HomeHelpers.cc
PHONE
WEBSITE
Business Coaching is Booming! The Growth Coach is ranked in the “Top 25 New Franchises” by Entrepreneur Magazine. Create a rewarding lifestyle helping others succeed while building an incredible future for yourself with this homebased, high-profit business. No travel. 3-5 years business experience required. 888.292.7992 www.TheGrowthCoach.com inquiry@TheGrowthCoach.com
www.franmarket.com www.franmarket.com
25
100 Franchises under 100K FRANCHISE FEE
FRANCHISE
DESCRIPTION
INVESTMENT RANGE YEAR STARTED
41. The HomeTeam Inspection Service
The most aggressive, unigue and professional marketing program in the home inspection industry puts the owner in the best position to succeed and dominate their market.
25,000
7,500 - 52,000
1992
42. Rooter-Man
Plumbing/Sewer and Drain Cleaning Service.
7,950
46,800 - 137,600
1981
43. WIN Home Inspection
Home inspection business.
25,900
36,800 - 49,050
1993
44. Homes & Land Affiliates, LLC
Advertiser of homes for sale in North America.
27,000
50,000 - 50,000
1973
45. Dr. Vinyl & Associates
Mobile service repairing leather, vinyl, plastic, fabric & much more.
38,950
38,950 - 75,000
1981
46. Mr. Appliance
Fully-franchised appliance repair company.
19,950
37,740 - 76950
1996
47. Wirth Business Credit
A Business-to-Business financial services franchise offering leasing and financing products to small businesses.
20,000
40,500 - 73700
2005
48. NHance
NHance wood refinishing franchise with strong financial opportunity and low investment.
16,000
31,525 - 94,700
2003
49. Anago Cleaning Systems
Franchises provide regularly scheduled office cleanings as well as periodic maintenance, such as carpet shampooing and window powerwashing.
2,000 - 350,000
8,000 - 350,000
1991
50. RESCUECOM
RESCUECOM is a franchised IT company built by IT experts in the 20B IT marketplace.
24,880
45,000 - 45,000
1997
51. The Alternative Board
Franchisor of peer advisory boards and business coaching.
35,000
47,385 - 111,375
1996
52. The Growth Coach
Business Coaching franchise, helping business owners work smarter and make more money.
28,900
38,200 - 58,400
2003
53. Padgett Business Services
Accounting and Tax Franchisor with year round business cycle operating since 1966.
27,500
75,000 - 80,000
1976
54. American Poolplayers Association, Inc.
The APA is a franchising and membership company that operates a centrally controlled nationwide network of amateur pool leagues.
5,000
11,900 - 14,700
1982
55. Maid to Perfection
MTP’s format offers diversification to franchisees, which leads to higher net profits and competitive edge.
12,500
55,000 - 165,000
1990
56. Instant Tax Service
Instant Tax Service, providers of tax return preparation, e-filing, and a variety of refund options.
30,000
10,000 - 84,400
2004
57. Affiliated Car Rental, L.C.
Neighborhood provider of low cost car and truck rental.
8,000
45,000 - 100,000
1981
58. Mr. Rooter
All-franchised, full-service residential and commercial plumbing and drain cleaning company.
22,500
51,700 - 142,000
1974
59. Colors On Parade
The original “Body Shop on Wheels”. Provides non-traditional solutions to minor automotive repairs.
10,000 - 50,000
42,900 - 50,000
1991
60. The Entrepreneur’s Source
Career and business coaching company offering alternate career options.
49,0000
72,000 - 81,500
1998
Make your business a household name with nationally-known brands and a sound business model based on needed, repetitive services. Join the team that is Leading The Service Industry™ and gain the competitive advantage of our brands, including Rainbow International, Mr. Rooter, Aire Serv, Mr. Electric, Mr. Appliance, and Glass Doctor.
Our franchisees come from all walks of life. CruiseOne continuously adds new marketing venues and technology, while our members maintain the personalized service coveted by our clients. Whether planning individual travel, group bookings or corporate meetings at sea our franchise owners continue to set the pace and raise the bar by delivering our hallmark “high tech, high touch” service.
Call us toll-free at 866.696.1504, or visit www.LeadingTheServiceIndustry.com.
See the movie at www.cruiseonemovie.com
26 Franchise
Summer 07
THE BEST LOW-INVESTMENT FRANCHISES CONTACT
STREET ADDRESS
CITY
STATE
ZIP CODE
Greg Haskett
575 Chamber Drive
Donald MacDonald
Milford
OH
45150
800-598-5297
www.hometeaminspection.com
268 Rangeway Road
N. Billerica
MA
01862
800-700-8062
www.rooterman.com
Arnie Williams
6500 6th Avenue NW
Seattle
WA
98117
800-967-8127
www.winfranchise.com
Suzanne Layel
1830 East Park Avenue
Tallahassee
FL
32301
800-458-9520, ext. 2136
www.homesandland.com
Brian Becker
201 N.W. Victoria Drive
Lee’s Summit
MO
64086
800-531-6600
www.drvinyl.com
Mr. Appliance
1020 N. University Parks
Waco
TX
76707
800-847-8965
www.mrappliance.com
Peter J. First
4200 Dahlberg Drive, Suite 100
Minneapolis
MN
55422
800-567-6600
www.WirthBusinessCredit.com
Pete Franetovich
1530 North 1000 West
Logan
UT
84321
435-890-1010
www.nhance.com
Franchise Development Specialist
3111 N. University Drive, #625
Coral Springs
FL
33065
800-213-5857
www.anagousa.com
Bob McClure
2560 Burnet Avenue
Syracuse
NY
13206
315-263-6831
www.rescuecom.net
Kristine Vollrath
1640 Grant Street, Suite 200
Denver
CO
80203
303-839-1200
www.TABBoards.com
Daniel Murphy
10700 Montgomery Road, Ste. 300
Cincinnati
OH
45242
888-292-7992
www.TheGrowthCoach.com
Carol Clark
400 Blue Hill Drive, Suite 201
Westwood
MA
02090
877-729-8725, ext. 225
www.smallbizpros.com
Kevin Hinkebein
1000 Lake St. Louis Blvd. Suite 325 Lake St. Louis
MO
63367
636-625-8611, ext. 5120
www.poolplayers.com
Patrick Aarron
1101 Opal Court, 2nd Floor
Hagerstown
MD
21740
800-648-6243
www.maidtoperfectioncorp.com
Franchise Sales Department 1 South Main Street , Suite 1430
Dayton
OH
45402
888-870-1040
www.instanttaxservice.com
Michael S. Miller
105 Highway 36
Eatontown
NJ
07724
800-367-5159
www.affiliatedcarrental.com
Pat Humburg
1020 N University Parks Drive
Waco
TX
76707
254-745-5850
www.LeadingTheServiceIndustry.com
Kris Lee
642 Century Circle
Columbia
SC
29526
800-726-5677
www.colorsfranchise.com
Susan Stilwell
900 Main Street South, Building #2
Southbury
CT
06488
800-892-1085, ext. 2171
www.TheESource.com
CANDY BOUQUET Candy Bouquet specializes in floral-like creations crafted from gourmet chocolates and candies from all over the world. Candy Bouquets can be customized into one-of-a-kind gifts that won’t wilt, fade or die. Home based or store front, exclusive territory, low franchise fees, comprehensive training, great support and NO ROYALTIES!
PHONE
WEBSITE
Senior Care is Booming! Take advantage of an exploding market with ComForcare Senior Services.Low Investment, Huge Revenue Potential.Our non-medical home care franchise opportunity provides owners a turn-key operating system including: • Proprietary Operations Software • Large Territory • Six Profit Centers • Revenue Generating Alliances • Professional Marketing Tools
For franchise information, visit our website: www.comforcare.com
• www.candybouquet.com•
www.franmarket.com www.franmarket.com
27
100 Franchises under 100K FRANCHISE FEE
FRANCHISE
DESCRIPTION
61. MaidPro
Franchisor of housecleaning services known for robust technology, creative marketing and strong owner community
7,900
60,000 - 100,000
1997
62. BuildingStars
Buildingstars is the only commercial cleaning franchise opportunity with a specific focus on office buildings. Three different franchise programs available.
995
1,795 - 19,995
2000
63. Computer Troubleshooters
Computer Troubleshooters provides onsite technology services to small businesses around the world.
17,500
22,000 - 33,000
1999
64. TSS Photography
Specializes in Youth School, Sports, and Event Photography.
56,500
31,750 - 74650
1984
22,500
35,000 - 65,000
1979
65. HouseMaster Home Inspections Franchise company offering residential and commercial building inspection services.
INVESTMENT RANGE YEAR STARTED
66. Stretch-N-Grow
Funfilled Fitness Program for preschoolers taught in day care centers. World’s Largest, Home-based, Low overhead!
22,600
23,600 - 23,600
1992
67. Business Alliance, Inc.
Business Alliance, Inc. The Great American Franchise Resource, Helping others achieve their dream.
19,900
19,900 - 19,900
1997
68. Synergy HomeCare Franchising, LLC
Provides in-home, non-medical care to individuals requiring daily living assistance.
35,000
49,000 - 99,000
2005
69. Re-Bath
Re-Bath is a one day bathroom remodeler using Durabath a solid surface polymer.
20,000
35,000 - 250,000
1991
70. Décor & You
Full service residential and commercial decorating provided in home service from planning through delivery. C.I.D. certified professional training program.
25,000
78,000 - 78,000
1998
71. Money Mailer
$90 million in assets and over 500 people are ready to work for you today.
37,500
54,000 - 54,000
1980
72. Auction it TODAY
Auction it TODAY is an eBay trading assistant franchise that offers a unique kiosk model that can help boost profits to any retail store environment.
19,000
19,000 - 90,000
2005
73. Homewatch CarGivers
A provider of home care services for seniors, adults, and youths. We offer diverse revenue streams with the widest array of care services in the industry.
30,000
84,500 - 114,800
1996
74. The Child ID Program
Provides child identification programs to both public and private schools.
23,500 - 33,500
9,950 - 27,900
2002
75. Mr. Electric
Electrical Installation and Repair Services for both Residential and Commercial.
22,000
69,200 - 162,000
1994
76. FiltaFry
Specializes in mobile, onsite maintenance of deep fryers in restaurants and commercial kitchens.
24,750
67,350 - 75,100
2002
77. Furniture Medic
Mobile on-site Furniture and wood repair restoration for residential and commercial customers.
24,500
37,000 - 81,894
1992
78. Aire Serv
Installation, Maintenance and Repair of Heating, Ventilation, Air Conditioning and Indoor Air Quality Systems
22,000
39,845 - 147,900
1993
79. U.S. Lawns
Lawn maintenance franchise system. today offices are operated in 30 states. this is a low cost investment that can be operated as a home base.
29,000
35,000 - 85,000
1986
80. SnappyAuctions
Franchisor of eBay drop-off stores, with over 60 locations in 24 States in the U.S.
25,000
75,000 - 99,500
2004
Heaven’s Best is a unique company which has been rated number 1 for franchisee satisfaction for two years in a row by Franchise Business Review. Our system and products are fantastic. Our operators are happy, and are making great incomes. Call us at 800.568.3605, or visit our website at www.heavensbest.com.
28 Franchise
Summer 07
THE BEST LOW-INVESTMENT FRANCHISES CONTACT
STREET ADDRESS
CITY
STATE
ZIP CODE
Chuck Lynch
180 Canal Street
Boston
MA
02114
617-742-8787, ext. 222
www.maidpro.com
Chris Blase
11489 Page Service Drive
St. Louis
MO
63146
314-991-3356
www.buildingstars.com
Glenn Cox
755 Commerce Drive, Suite 412
Decatur
GA
30030
404-477-1300
www.comptroub.com
Theresa A. Huszka
2150 Boggs Road, Suite 200
Duluth
GA
30096
800-321-9127, ext. 2861
www.tssphotography.com
Mike Kuhn
421 W. Union Avenue
Bound Brook
NJ
08805
800-526-3930
www.franchise.housemaster.com
Caryn Burnier
PO Box 7599
Seminole
FL
33775
727-596-7614
www.stretch-n-grow.com
John Tittle
701 5th Avenue, Suite 3510
Seattle
WA
98104
800-557-4850
www.businessallianceinc.com
Peter Tourian
1757 E. Baseline Rd, Building 6, Suite 124
Gilbert
AZ
85234
480-659-7771
www.synergyhomecarefranchise.com
Cecil Johnson
1055 S. Country Cub Drive
Mesa
AZ
85210
800-426-4573 ext. 137
www.re-bath.com
Dawn Ingala
900 Main Street South, Building 2
Southbury
CT
06488
800-477-3326, ext. 2131
www.decorandyou.com
Franchise Licensing Dpmt.
14271 Corporate Drive
Garden Grove
CA
92843
888-446-4648
www.moneymailer.net
John Hoose
301 Appian Way Drive
Brighton
MI
48116
810-225-0555
www.auctionittoday.com
Judy Wood
5111 E. Belleview Avenue, Suite 303
Greenwood Village
CO
80111
800-777-9770
www.homewatchcaregivers.com
Franchise Development Specialist
705 Lakefield Road, Bldg. G
Westlake Village
CA
91361
805-557-0577
www.chipfranchise.com
Pat Humburg
1020 N University Parks Drive
Waco
TX
76707
254-745-5850
www.LeadingTheServiceIndustry.com
Dave Jarrett
7075 Kingspoint Parkway, Suite 1
Orlando
FL
32819
407-996-5550
www.filtafry.com
David Messenger
3839 Forest Hill Irene Road
Memphis
TN
38125
901-597-7574
www.furnituremedicfranchise.com
Pat Humburg
1020 N University Parks Drive
Waco
TX
76707
254-745-5850
www.LeadingTheServiceIndustry.com
Brandon Moxam
4407 Vineland Road, Suite D15
Orlando
FL
32811
800-US-LAWNS
www.uslawns.com
Debbie Gordon
209 10th Avenue South Suite 322
Nashville
TN
37203
615-244-0629
www.snappyauctions.com
Comfort Keepers is one of the largest US franchise networks providing non-medical in-home care to seniors. With over 525 locations in 46 states, Comfort Keepers franchisees care for thousands of seniors allowing them to stay in their own home. Discover a business that is lucrative and satisfying to the soul. www.comfortkeepersfranchise.com
PHONE
WEBSITE
Love to Cruise? Want to own your own business? Join An Award Winning Cruise Agency! #1 Ranked in Category in Entrepreneur Magazine’s 2004-2007 Annual Franchise 500. • Highest Commissions In The Industry • Turn-key Marketing Programs • State of the Art Website Program • Back-end software (included) • Extensive Group • Industry Benefits
For more information, call 888.582.2150 or visit our website at www.beacruiseagent.com.
www.franmarket.com www.franmarket.com
29
100 Franchises under 100K FRANCHISE FEE
FRANCHISE
DESCRIPTION
81. Fast-teks On-Site Computer Services
Franchise owners manage a staff of technicians and trainers that travel to and conduct all of our services at the site of the business or residential customer.
19,500
34,500 - 52,950
2004
82. Octoclean
Commercial janitorial company. Provides franchisees with on-going training, customer service support and financial services.
8,000 - 57,500
9,500 - 182,200
2000
83. Right at Home
An exciting opportunity in the rapidly growing in home care and assistance industry.
29,800
43,000 - 75,000
2000
84. Adventures in Advertising Franchise, LLC
A network of franchised and affiliated promotional product and corporate apparel distributorships throughout the U.S.
30,000
15,000 - 53,000
1994
85. Entry Point Glass
EntryPoint showrooms provide homeowners decorative doorglass installation in their existing doors.
15,000
60,000 - 80,000
2005
Ident-A-Kid is the pioneer in Immediate Response Child Identification providing over
34,900
44,000 - 54,000
1986
87. Abrakadoodle
Abrakadoodle provides a high quality, educationally rich, imaginative art education program to children ages 20 months to 12 years old.
33,900
48,350 - 63,650
2004
88. TruePresence
A national Internet marketing firm dedicated to helping businesses find, get, and keep customers online.
35,000
48,050 - 114,500
2005
89. KidzArt
Home-based drawing-based art education business with curriculum that WOW’s for ages 2-102.
31,900
50,000 - 75,000
2002
90. Billboard Connection
A home-based outdoor advertising franchise with over 50 locations in 3 countries.
27,500
30,000 - 30,000
2005
91. Our Town America
A sales driven advertising franchise that focuses on the new mover as a niche market.
29,000
40,000 - 60,000
2004
92. Spring-Green Lawn Care
Delivers lawn and tree care services to both residential and commercial customers nationwide.
25,000
65,172 - 72,273
1997
93. Concerto Networks
Provides proactive onsite and remote IT support to small and medium sized businesses.
25,000
37,000 - 44,000
2004
94. Restyle
Womens Consignment Boutique.
24,900
46,500 - 61,650
2005
95. Pet Butler
America’s Pet Waste Cleanup and Removal Service.
22,900
49,900 - 81,900
2005
96. i9 Sports
Focuses on organizing and operating youth sports leagues, camps, clinics, and child development programs.
39,900
50,000 - 65,000
2003
97. Business Advisers International Business Advisers International offers Regional Developer, Multi Unit and Individual
40,000
76,000 - 86,300
2005
86. Ident-A-Kid Services of America three million cards annually.
franchises in the B2B Advisory/Coaching field.
INVESTMENT RANGE YEAR STARTED
98. Tile Outlet Always In Stock ®
Tile, stone flooring & counter products and equipment and materials for tile & stone installation.
20,000
64,350 - 124,800
2002
99. Green Life Interiors
Interior plantscape design strategies along with expert plant care.
30,000
48,500 - 69,500
2005
100. VIP Cleaners
Free dry cleaning pick-up and delivery.
35,000
45,500 - 83,000
2004
Join the multi-billion dollar Internet marketing revolution—no technical expertise required. With a TruePresence franchise, you can use your sales and marketing talents to help businesses find, get, and keep customers online. Our corporate team manages the fulfillment of your clients’ web design, development, and online marketing solutions for you.
The Entrepreneur’s Source (TES) is the leading business coaching company with more than 250 offices Worldwide. TES offers a full range of services to individuals seeking career options and to companies looking to increase performance. The Entrepreneur’s Source partners with individuals and companies to achieve their desired outcome.
Call us at 800.506.9116 ext. 2164 or visit our website: www.truepresence.com
For more information, call us toll-free at 800.765.4492, or visit www.TheESource.com/info.
30 Franchise
Summer 07
THE BEST LOW-INVESTMENT FRANCHISES CONTACT
STREET ADDRESS
CITY
STATE
ZIP CODE
PHONE
WEBSITE
Mark Lucas
15310 Amberly Drive, Suite 185
Tampa
FL
33647
800-262-1671
www.fastteks.com
Franchise Development Specialist
5225 Canyon Crest Drive., #71-339
Riverside
CA
92507
951-683-5859
www.octoclean.com
Sharon Thomsen
11949 Q Street, Suite 100
Omaha
NE
68127
877-697-7537
www.rightathome.net
Rebecca Kollmann
800 Winneconne Avenue
Neenah
WI
54956
920-886-3808
www.exploreaia.com
Dennis Staub
8010 Sunport Drive 114
Orlando
FL
32809
407-926-1872
www.EntryPointGlass.com
Lisa Hinz
2810 Scherer Drive - Suite 100
St. Petersburg
FL
33716
605-216-9506
www.ident-a-kid.com
Jennifer Blum
1800 Robert Fulton Drive, Suite 205
Reston
VA
20191
703-860-6570
www.abrakadoodle.com
Gayle Becker
10 E. Baltimore Street, 10th Floor
Baltimore
MD
21202
800-506-9116
www.truepresence.com
Franchise Development Department
1902 E. Common Street, #400
New Braunfels
TX
78130
800-379-8302
www.kidzart.com
Bernice Cullen Carley
2121 Vista Parkway
West Palm Beach
FL
33411
888-810-3173
www.billboardconnection.com
Franchise Sales
3845 Gateway Centre Blvd., #300
Pinellas Park
FL
33782
727-345-0811
www.ourtownamerica.com
Mark Potocki
11909 Spaulding School Drive
Plainfield
IL
60544
815-436-8777
www.springgreenfranchise.com
Raymond Hivoral
610 West Ash Street, Suite 1501
San Diego
CA
92101
619-501-4530
www.ConcertoNetworks.com
Findley Group
1404 S New Road
Waco
TX
76711
877-757-1445
www.restylestores.com
Kris Simonich
5300 Town & Country Blvd, Ste. 440 Frisco
TX
75034
800-PET-BUTLER
www.petbutler.com
Jim Cherry
1723 South Kings Ave.
Brandon
FL
33511
800-975-2937
www.momentumfranchise.com
Susan Stilwell
900 Main Street South, Building #2
Southbury
CT
06488
800-892-1085 , ext. 2171
www.AdviCoach.com
David Silver
3329 Fitzgerald Road, #1
Rancho Cordova
CA
95742
888-328-4374
www.tileoutlet.net
Findley Group
1404 S New Road
Waco
TX
76711
877-757-1445
www.greenlifeinteriors.com
Findley Group
1404 S New Road
Waco
TX
76711
877-757-1445
www.myvipcleaners.com
Take charge of your future with Decor&You® and Love the Business You Work In®! Build wealth and equity, through our Regional Developer, Territory Director, and DecorDesigner franchise opportunities. Our professionally trained interior decorators bring full service decorating with personalized service to residential and commercial clients nationwide.
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B U S I N E S S AT T I T U D E
For Better or For Worse? — BY CAROLYN HEINZE
What it takes to run a successful franchise with your spouse For career-minded couples that want to take their destiny into their own hands, the prospect can be romantic: What could be more exciting than launching a franchise together and constructing a future over which the both of you have the ultimate control? Not only can it be exhilarating - it’s a wise investment.
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Or is it? That, the experts declare, depends largely on where your relationship stands. And, the only way to know this is through communication. Like the plethora of other big decisions that couples make - such as buying a house, having a baby or even getting married - if you don’t talk through the realities of everyday life, chances are, you’re setting yourself up for failure.
B U S I N E S S AT T I T U D E
GOOD COMMUNICATION SKILLS, TEAM SPIRIT, SHARED GOALS & A GOOD RELATIONSHIP CAN LEAD TO SUCCESS. Becky Stewart-Gross, Ph.D, should know. The president of Green Bay, Wis.based business consultancy Building Bridges, and co-author of Sleeping with Your Business Partner (Capital Books), not only wrote a book with her husband, Mike Gross, EdD, but she runs her business with him as well. When counseling others in similar situations, the couple has them ponder this question: Do you have the right stuff? To the Gross’s, the “right stuff” consists of good communication skills, team spirit, a sense of shared values pertaining to goals and priorities and, above all, a healthy marital relationship, which lays the groundwork for a solid business foundation. “Beyond that,” StewartGross says, “what becomes important is your business background and education, because that is what’s going to help you actually run the franchise.”
Respect, however, must sit at the core of your relationship, according to Ronald C. Reece, Ph.D, a business psychologist with a focus on family businesses at Reece & Associates in Greenville, S.C.
“If there is not a good, solid sense of respect for the other person, you are putting yourself in a circumstance that results in much more conflict than is needed,” he emphasizes. “Couples can do a lot with each other, even when some of the emotional connectedness is weakened, as long as they still respect one another.” There are many advantages to running a franchise with one’s spouse, among them, the trust that you share as a couple. Working with them in a business environment can also help you to learn even more about them. “You notice different qualities about your spouse, which may be good and bad, that you wouldn’t have known before,” Stewart-Gross observes. “It helps your marriage to grow in different ways because of that, and you really develop some bonds with your spouse. There is some real satisfaction out of the teamwork that you do, and the joy of the team effort that comes into it. You are able to combine your strengths.” On the other hand, a successful “copreneurship” is one where both parties aren’t afraid of admitting their weaknesses - and the differences they may have with their partner.
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“COUPLES CAN DO A LOT WITH EACH OTHER, EVEN WHEN SOME OF THE EMOTIONAL CONNECTEDNESS IS WEAKENED, AS LONG AS THEY STILL RESPECT ONE ANOTHER.” —
“The big one is understanding your personality differences and how they can help your work together both in business and in your relationship,” Stewart-Gross underlines. “As co-preneurs, your personality differences really need to become a source of strength, but they can be the very thing that drives you apart.” Before, for example, having a baby, many couples discuss what each parent’s responsibilities will be before the child is born: who will work, if the couple is in a situation where both parties don’t need to? Who will drive the child to nursery school? Who will handle all the housework that isn’t related to the baby?
business. Each party oversaw a certain area of the operation and, ultimately, in times of disagreement, it was decided that the buck would stop at them, giving them the power to veto their spouse’s suggestion. Another co-preneur client of Building Bridges proactively “bickers” over the problem before laying out every point in detail. Eventually, after listening to one another’s opinions, a decision is reached. “Take a good look at how you settle disagreements now,” Reece instructs. “Are you prone to avoidance and then there are blow-ups? Do you fight to win? Do you debate with respect? The pressure that
Ronald C. Reece, Ph.D
comes with being in business will increase the need for problem solving that comes to a solution.” And, he adds, no matter what else you may disagree on, you should agree on money matters at least 80% of the time before launching into a commercial venture. Reece notes that couples considering running a franchise together should be aware of the amount of time that they will be together. “Time away from each other in a non-business situation sometimes gives people a sense of independence and personal
The same process, Stewart-Gross says, applies to co-preneurships. She uses a burning house to illustrate. “You don’t talk about how to get out of a burning house once it’s burning. What you want to do is have a good fire escape plan. We suggest that when people are thinking about going into business together, they talk about the issues up front,” she advises, conceding that no one can predict every possible problematic situation. “Look at all of the different responsibilities and - whether they be home responsibilities or work responsibilities - if they can talk about it up front. And then as the business keeps going, they should keep having those discussions. At times, there are going to be disagreements, and there is going to have to be a give and take,” she says. One couple that Stewart-Gross worked with assigned each other their professional responsibilities before launching their www.franmarket.com
35
B U S I N E S S AT T I T U D E
agendas, rather than communicating on the fly, at any time of the day. “When I see couples in business together, I work very hard to establish concrete, designated forums with agendas,” he says. So what is the secret to running a successful franchise operation with your spouse? That depends on your definition of “success.” For Stewart-Gross and her husband, success for a couple in business means that working with your spouse is good for business and good for your marriage and family.
health when they come back together,” he says. “In this situation, you are together a lot, physically and mentally. Finding that separate space is pretty important.”
Not only should both parties feel a sense of independence, but separating “business time” and “couple time,” also becomes paramount in couple-operated organizations. Reece suggests that couples schedule regular meetings with properly laid-out
For more information, visit these Web sites.
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“That, to us, is what success really is,” Stewart-Gross says. “Every couple needs to decide what it means for them to be really successful.” —FMM Carolyn Heinze (carolynheinze.blogspot. com) is a freelance writer/editor.
i BUILDING BRIDGES www.buildingbridges.cc www.sleepingwithyourbusinesspartner.com
i REECE & ASSOCIATES www.ronreece.com
BUSINESS PLANNING
Planning for the future should start now
AIMING FOR
SUCCESSION Knowing the outcome of certain things in life - like that book you’ve been saving for your next beach vacation or the film that you’ve been meaning to see - can ruin the fun. The journey, wrote the late photojournalist Dan Eldon, is the destination. — BY CAROLYN HEINZE In business, however, the journey counts a lot, but if you don’t know where you’re headed, you risk severely decreasing the value of everything you’ve worked for thus far. Succession planning, therefore, is an important part of business - and something, experts attest, entrepreneurs aren’t so good at. Not only must you plan for what happens when you decide to retire, but - if you plan to expand by opening additional franchises with the same chain or to launch new locations branded under another concept - you must also lay the groundwork for how you are going to get there. “The first thing is to begin with the end in mind,” said David Campbell, an agent at National Franchise Sales in Sarasota, Fla. “Very few businesses, irrespective of whether they are a franchise or an independent business, have a clear picture of how many years they are going to do this and what they are moving toward.” Franchisees should have a clear idea of when and how they will move on to the next phase as they are setting up shop. Marvin L. Storm, CEO of Blackstone Hathaway in Moraga, Calif., likens a business without a succession plan to a vacation where the parties on holiday have no idea when they will return home.
Succession planning is an important part of business - and something, experts attest, entrepreneurs aren’t so good at. “People get into business, and it’s usually one of the top three most important financial decisions they make, but they don’t think about what the end game is and how they are actually going to get out of the business,” he said. “They have no real solid plan of exiting the business, moving on to another business entirely, or expanding the business into multiple concepts which is becoming more and more accepted and frequented today with more sophisticated franchisors.” Without a roadmap, franchisees run the risk of burning out. “For an owner/operator franchisee, burnout is the most critical component of failure for failing to maximize overall success, because they don’t know when the trip is over,” Storm observed.
franchisee decides it’s time to get out,” said Storm, adding it’s not a good time to move on when sales and profitability are decreasing. Burnout also occurs when the business is running the owner, rather than the other way around, which makes moving into the next phase all the more difficult. Campbell suggests that the way around this trap is to construct a multi-year plan, and then break it down to a one-year plan. The benchmarks listed in the plan, he says, should receive buy-in from the entire team. “It has to be a reasonably achievable objective that is agreed to by the majority of the people who work in the enterprise,” he said. “What often happens is that the owner will say, ‘This is the goal
If instead the franchisee has planned to move on after, for example, seven years, they can work toward this goal by implementing milestones that will maximize the value of the enterprise along the way.
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Multi-concept franchisees are in a good position to leverage their back-office systems, decreasing the cost of investing in new ventures. Companies have the resources to procure better talent, and internal processes and systems don’t need to be replicated. On the other hand, because multi-concept franchisees receive several revenue streams, sophisticated cash flow planning becomes crucial, as does enlisting the right personnel to handle the management duties that were attended to by the owner before the enterprise was expanded upon. “Picking a competent successor is the absolute most important aspect of either. Absentee management, by definition, gets robbed and is usually incompetent,” said Bruce S. Schaeffer, president of Franchise Valuations Ltd. in New York. While family members are often selected to take over management, they must possess the right skills in order for the operation to continue functioning well. “Entrepreneurs that build it themselves know what they are doing, but they keep it all in their head. Whatever the personality characteristics are for the position - and usually, the
“What happens a lot of times if people get burned out, they lose focus, it plateaus, competition comes in, they’re not on top of their game, revenues start to slide, profitability ebbs away, and then the
For more information, visit these Web sites.
for this year.’ They will present it to the group without buy-in, and it’s meaningless without buy-in.”
i BLACKSTONE HATHAWAY
www.blackstonehathaway.com
i FRANCHISE VALUATIONS LTD.
www.franchisevaluations.com
i NATIONAL FRANCHISE SALES
www.franchisecapitalgroup.com
actually happens. When it actually happens, sometimes the franchise agreement doesn’t facilitate that, because you are often precluded from doing that in the franchise agreement,” said Storm.
person who is leaving should know what that is - must be found in a successor,” Schaeffer said. One of the biggest issues that franchisees face when starting new locations or moving into other concepts is that they are under-capitalized. By knowing what your future plans are before you begin, you can express them to your financial institution in an effort to avoid this problem. “The financial institution that you are working with should have the understanding that you intend to build X number of these locations,” Campbell advised. “Unless they understand that; unless you spelled out what your long-range plans are, what usually happens is that you wind up under-capitalized through the second, third and fourth, and the business runs you as opposed to the reverse.” Storm notes that in most cases, franchisors spend little time - if any at all discussing their franchisees’ future plans, which often results in problematic
Without a roadmap, franchisees run the risk of burning out. situations when the franchisee expresses interest in expanding into new ventures. “Most franchise companies do not collaborate enough on forward planning as individuals are getting into business,” he said. One way franchisors can help to ensure their franchisees are successful in making an exit or expansion to other concepts is communicating about this up front. “But that is never really thought about until it
The key to good succession planning, Storm underlines, is communication between both franchisors and franchisees. “If a franchisee approaches a franchisor and says, ‘I’m going to buy Brand 2,’ within the system or outside of the system, the franchisor needs to keep an open mind and try to structure something that is beneficial for both - especially if the franchise agreement precludes it,” he said. “They may lose a good franchisee because he may exit the system to reformat his objective of becoming a multi-branded franchisee. Franchisors don’t want to lose good franchisees.” —FMM
Carolyn Heinze carolynheinze. blogspot.com) is a freelance writer/editor.
www.franmarket.com
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T EC H N O LO GY
A practical guide to data protection for small businesses — BY JIM WALKER
Scott Rovan is one of the lucky ones. As a mortgage broker in the Phoenix area, he focused on his strengths in loan processing. As a small business owner, he knew enough to seek expert advice in areas that were not his strengths, such as personal computer technology. Soon after his technology advisor recommended that he implement a structured system for backing up his business data, a computer crash shut down his system. Fortunately, Scott had arranged for a remote backup service to back up his critical business files, which saved him from a business disaster. As Rovan puts it, “As a mortgage lender, I keep my client information on my laptop, including one-on-one service orientation data, Calyx loan processing files, and daily files any small business would need. When my laptop crashed, I felt terrible. I thought, ‘What am I going to do now?’ Then I remembered that I had begun using automated remote backup with DataPreserve about two months earlier. Through it, I was able to restore all of my files to a new laptop the next day.”
Loss of data will cause an interruption of business, often leading to a loss of intellectual capital. Once a data disaster has occurred, the cost of recovering the data or attempting to recover it can be very high. Forensic analysis of a hard drive can run up well over $3,000, with no guarantee of success.
spending $8,000 on forensic analysis, he was able to retrieve enough data to stay in business. Other common issues include misplaced or damaged tapes, discovered only after the original data was lost.
Strategies To Protect Your Data
In spite of the high visibility of hurricanes, fires and other natural disasters, the greatest dangers to small businesses are technology drive threats. Small business is particularly vulnerable because there is seldom an IT specialist in-house. Best practices for virus protection and data backup often take a backseat to more urgent issues.
Traditional approaches to formal backup include using external hard drives, tapes and weekly copies to a CD or DVD, which are then filed in a nearby office bookcase. More typical are unscheduled backups using seat-of-thepants methodology onto a variety of media such as memory sticks, CDs, and Zip drives with no verification, cataloging or periodic testing.
The consequences of data loss from these threats, however, can be significant. Loss of data will cause an interruption of business, often leading to a loss of intellectual capital. In addition, a compromise of client information can mean legal liability and a loss of trust.
A dentist in Scottsdale, Ariz., learned first-hand the dangers of not properly backing up records. After a hard drive crash, he checked his backups and found that his administrative assistant had, for two years, dutifully executed weekly backups ... of folder shortcuts. After
With our increasing reliance on computer technology, the amount and value of electronic data is also increasing. Add to this our reliance on e-mail, as well as legal compliance issues for medical and public companies, and you find that often the company database is one of the most valuable company assets.
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When it comes to data protection, small business owners typically are not interested in the latest revisions of a specific technology. Their concerns are more of a practical nature: stay in business, enjoy convenience and have peace of mind. In order to achieve this, many small business owners see the value of outsourcing data protection to a professional. Many IT pros will take the time to understand the concerns of each particular business they service and are able to personally tailor solutions that meet its needs and budget. More importantly, IT professionals are able
to fine-tune and check systems for proper functioning on a regular basis. The ideal plan would include protection of computer systems from attack by viruses, physical protection of the hardware and stored data and backup to a remote location. Also important for small business owners is that the plan be as simple and automated as possible, freeing them to run the business, not become a technology guru.
Questions To Ask Before Investing “My first question was how much was it going to cost to get started and to protect my data on a monthly basis,” notes Carl Landis, director of data control operations for DataPreserve Franchise LLC, a provider of remote data backup services. “It’s like insurance, you don’t want to spend the money until you need the service. Then you are glad you have it.” Small business owners should ask these questions before investing in any data backup solution:
How much time will it take? For small business owners, data backup should be automated as often as possible. Several solutions offer “set-it-and-forget-it” options that allow your backup to continue on a regular schedule with no human interference. Some offer a confirming e-mail to the business owner that assures them the data is backed up safely. This offers continued peace a mind.
Will a copy of the data be safe in the event of theft, fire or natural disaster? Data that is stored on disks and drives is useless if those storage items are subject to the same disaster as the computer. The safest solutions include backup to a remote commercial data centers.
Will the data be encrypted to limit access on a stored tape or via Internet transmission? Typical copying of files to CD or backup to tape can increase the risk
[ CASE STUDY IN DATA PROTECTION ]
Overcoming the Computer ‘Click of Death’ “I thought I was the invincible one.” Susan Cullen is an office manager in Phoenix, Ariz., during the day and a poet in the evening. Susan knew her way around computers. In addition to using the computer at work, she used Microsoft Office programs, Word and Excel on her home computer for personal writing, poetry, storing recipes and favorite photos of her family and friends. She kept her financial data on her PC as well. Yet with less than 2 GB of data on a reliable old HP computer, Susan hardly gave a thought to data backup. “I kept hard copies of some of my poetry and recipes, not really as backup but as a convenience. I never thought of doing a computer backup until the day I experienced the ‘click of death,’” she said. The “click for death” for Cullen meant her computer would not boot-up. After trying several times to restart the computer, she received the message “operating system not found” on her monitor. Shaken but not deterred, Susan called her IT consultant, Kenneth von Hopf of Tech Paramedics, who investigated. “It was a clear case of a crashed hard drive,” says von Hopf. “I advised Susan that while replacing the computer was feasible, being able to retrieve her data from her old drive was not certain.” Cullen was devastated. “What a horrible feeling to think that my data was forever lost. Once I heard about the possibility of a data recovery company being able to restore my data, I felt much better,” she reflected. Yet after investing $100 for an evaluation fee and waiting a few days, Cullen received more bad news. The data recovery company couldn’t retrieve the data. Determined to recover her valuable information, Cullen contacted another resource for data recovery, Seagate (a hard drive manufacturer), for their assistance. “After wasting my emotion and money
with that other company, Seagate really came to the rescue. They had to do an extensive search to find the right parts to replace the damaged parts in order to recover the data. Seagate even waived the $50 evaluation fee and gave me a 10 percent discount. So I finally got everything back that was important, but unfortunately had to pay a very high price for this professional service, $2,430,” she said. “I had too much invested in that data to let it go,” continues Cullen. “I wasn’t willing to give up, although at times it looked very bleak. I don’t regret having spent the money, but now I know that it was an extremely costly lesson. Not only was the financial cost high, but so was the toll on my emotions of not knowing whether or not I’d ever get back my data or not. It was a very emotionally exhausting experience, not to mention the high financial cost I incurred.” When asked if she had any advice for fellow home computer users, Cullen did not mince words. “You absolutely need to have a backup system. If you care at all about your data, and your pictures, there is no other option. I only had 2 gigabytes of data that had infinite value, creating infinite sadness when I faced the possibility of losing it all,” she said. Cullen has these words for the wise. “Don’t subject yourself to this heartache and grief process. I was lucky. Use an automatic online service that keeps your data securely off-site, easily accessible, and always available for recovery in case of a hard drive crash or other data disaster. It makes more sense to do a backup than a recovery. The value of a backup service is priceless compared to the small cost,” she said. For more information on protecting yourself from the “click of death,” contact DataPreserve at 480-422-1600 or visit www.datapreserve.com. —FMM
T EC H N O LO GY
of data compromise if the data is not encrypted. Any Internet data transmission is vulnerable if it is not encrypted.
What is the process for recovering the data? Be sure to understand and test the system for ease of recovery before disaster strikes. Keep a copy of passwords and an outline of the recovery process in a secure location.
Who can you call for help?
How much will it cost? Depending on the solution, an automated, encrypted remote data backup service may run from $15.00 per month and up depending on the amount of data stored. Expect to pay $2.50 per gigabyte or more. —FMM
WAYS TO PROTECT YOUR
5 DATA
Jim Walker is president of DataPreserve Franchise LLC, Scottsdale, Ariz.
Find out if there a professional on call who understands your particular business.
There are several good practices any computer user can utilize to operate safely. Now is always a good time to minimize the risk of a data disaster.
1 2 3 4 5
Clean out old files. Throw out or store what you don’t need anymore including old e-mails. Clutter can cause your system to slow down and even crash. Update any anti-virus software, spyware and firewall protections on all of your computers. This will help protect you against one of the most common causes of computer failure. Implement a data backup process that encrypts and stores your data in a secure remote location. Update passwords and review the list of who has access to your data. People’s roles change within your company and so will their need to access your data. Make sure to keep the original software disks for your computer and other programs. This will make recovery easier in the event of data loss.
Data records can be the key to the success and livelihood of any small business. It is imperative they be properly cared for and protected from potential disaster. Don’t wait until it’s too late. Explore options for system backup that suit your small business needs today and prepare for tomorrow.
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B U S I N E S S R E SO U R C E
ASBDC NETWORK
Association of Small Business Development Centers
Small Business Development Centers Established through a public/private
strengthen small/medium business management, thereby contributing to the growth of local, state and national economies.
Sibby’s Premium Organic Ice Cream
•SBDCs
Client Profile: Suzanne Huber: Assisted by the SBDC in Wisconsin
help small businesses increase sales. SBDC in-depth clients* generated $6.1 billion in new sales in 2004.
• SBDC
clients’ sales grow faster. Small businesses that received SBDC assistance experienced sales growth of 18.5% between 2003 and 2004 – compared to 6.6% for businesses in general.
partnership by Congress in 1980, the Small Business Development Center program is the most comprehensive, efficient and effective business assistance network in the nation. The mis•SBDC clients create more businesses. sion of the SBDC program is to help More than 60% of all pre-venture new entrepreneurs realize their SBDC clients started dream of business ownership and 16,140 businesses. existing businesses remain comTHINGS TO KNOW petitive in the complex market• SBDC clients find out place of an ever-changing global where to get money. SBDC in-depth economy. SBDCs helped clients clients* generated Over 1,100 local SBDC offices obtain an estimated $2.6 $6.1 billion in extend entrepreneurial education billion in financing in new sales to meet small business needs, 2004. through free individual counselGo on the ing, training and research assisSmall business owners Web and visit tance while serving over 700,000 and aspiring entrepreneurs asbdc-us.org clients annually, creating over can go to their local 74,000 new jobs, and generating SBDCs for free, face-toover $500,000,000 in combined face business consulting new tax revenues for the federal governand at-cost training on writing busiment and state governments . ness plans, accessing capital, marketing, regulatory compliance, international trade and more. The SBDCs are a partnership that includes Congress, the U.S. Small Business Administration (SBA), the private secThe ASBDC (Association of Small tor, and the colleges, universities and Business Development Centers) represtate governments that manage SBDCs sents the collective interest of America’s across the nation. Small Business Development Center Network. ASBDC seeks to improve the SBDC national network by promoting, * Source of Statistics: SBA; and the “Economic Impact of Small Business Development Center Counseling Activities informing, and supporting the work of in the United States: 2003-2004,” by Professor James J. all state SBDC programs. ASBDC Chrisman of Mississippi State University members as a national network deliver nationwide educational assistance to
ASBDC Mission Statement
Suzanne Huber used to complain that she couldn’t get any “really good” ice cream. So she got a recipe with all natural, all organic ingredients, found a processor, and made her own. Huber didn’t stop there. She started a business. Today, Sibby’s Premium Organic Ice Cream can be found in more than 50 stores in southern Wisconsin, and demand is growing. Huber is in the fifth generation to occupy a Vernon County farm homesteaded by Christian Sebion in 1848. She and her ancestors inherited the nickname “Sibb”. She did market research on a name for her ice cream by asking people what they thought of Sibby’s. “It really resonated, especially with young people,” says Huber. Entrepreneurial training gives focus Huber enrolled in an entrepreneurial training course offered through the Small Business Development Center at UW-La Crosse. She applied for and received an Entrepreneurial Training Grant (ETG) to help pay for her course tuition. The ETG program is funded by the Wisconsin Department of Commerce and administered through the UW-Extension Small Business Development Center network. “At first I thought I would have to buy all the equipment it would take to make ice cream,” says Huber. But the course and detailed business plan she wrote as a part of her classroom work showed her a more business-like approach.
www.franmarket.com
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GROWIN’ MARKET Dunkin’ Donuts brews up expansion in Florida — BY ROBERT PITTS
A major Florida expansion plan by Dunkin’ Donuts was born out of a quest to provide the same accessibility here that loyal customers enjoy in the company’s home region of New England, according to a key executive.
“As most people are familiar, we started in New England. We’re one unit to 6,000 of the population base there,” said Lynette McKee, vice president of franchising. With markets like New York, Philadelphia and Chicago saturated, the time has come to look at markets where the company’s logo isn’t quite as commonplace, McKee said. Southeastern states in the national expansion include Tennessee, North and South Carolina, and of course, Florida. The Sunshine State is particularly attractive, McKee said, because so many of the company’s loyal customers tend to spend a good deal of time here. The company opened 63 new Florida locations last year - for a total of 387 units here - and has outlined the following openings for the next two years:
2007
2008
Miami
18
20
Ft. Myers
5
6
Tampa
19
19
West Palm Beach
7
6
Orlando
8
8
Jacksonville
3
3
Gainesville
2
1
TBD
1
5
Total
63
68
Dunkin’ Donuts expects to more than double its current Florida presence over the next five years. McKee said Tallahassee, Panama City and Pensacola also offer good opportunities for new development, while Miami, Tampa Bay and Orlando can handle an infill push.
F R A N C H I S E S U CC E S S
“We really fit just about every customer base out there. We literally function off of population numbers as opposed to the other demographics a QSR (quick-service restaurant) might consider. We have folks that are blue collar to white collar. Everybody loves our product. It’s really mixed in the customer base,” she said. McKee said Dunkin’ Donuts tends to be very flexible in its property needs. “We do like to have the endcap of the building because the drive-through is important. However, we share properties in a lot of different situations. We have operations in convenience stores, WalMarts, office buildings, sports arenas and airports,” she said. In-line space or outparcel locations are equally appealing, McKee said. Freestanding units are about 1,900sf, with in-line spaces around 800sf and kiosks even smaller. New restaurants will resemble a prototype that was unveiled in 2005 and is reminiscent of company roots that date back more than 55 years. The design features a new, modernized appearance and advanced equipment. “When people begin to look at us from a franchisee perspective, they’re amazed at how accommodating we can be in terms of a physical outlet. We can design and fit our product into a very small space,” she said. The chain is 100% franchised, McKee said, but Dunkin’ Donuts provides its franchisees with extensive commercial real estate support on a consulting basis. “We have a very strong development team. They’re in each market, and they are constantly networking with land owners, landlords and real estate developers to source out locations for the franchisee. We have a very strong construction support team to enable the franchisee to complete the buildout process,” she said. “That is a good opportunity for folks. We are 100 percent focused on the franchisee and their ability to grow and thrive in a business.”
As the expansion progresses, the company will be focused on working with multiple-unit franchisees, McKee said. “Moving forward, because of the timing and growth needs we have, we are now looking at larger, multiunit operations. The minimum is five locations,” she said, adding that number can include a mix of unit types from freestanding buildings to kiosks. Potential franchisees must have a background in food and beverage operations, McKee said, with a minimum $1.5 million net work and $750,000 in liquidity. Those requirements escalate depending on the size of the opportunity, she said. —FMM
Robert Pitts is the editor of Franchise Market Magazine.
Dunkin’ Donuts plans to triple the number of its stores in the United States to 15,000 by 2020. For more information about opening a Dunkin’ Donuts franchise, visit www.dunkinfranchising.com on the Web.
www.franmarket.com
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— BY MICHAEL H. SEID
AND
KAY MARIE AINSLEY
How to determine if a franchisor is financially stable Question: I am thinking about buying a franchise and there are several franchisors to choose from. How do I tell if a franchisor is financially stable and able to meet its commitments? One of the dangers of investing in a franchise is getting caught up in the hype – the sizzle of the opportunity. You simply need to step back and spend the time looking to see if there is any steak. Investing your life savings based upon a glossy brochure, a great web site and your new instant buddy – the franchise salesperson or franchise broker isn’t smart and it certainly isn’t necessary.
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Understand the franchise sales process. Great franchise salespeople can make you feel like there is an urgency to buy. The best of breed can make you feel reluctant to ask the hard and important questions – even while they are creating the illusion of pressuring you to do just that. The process calls for you to provide reams of information on yourself but doesn’t always get the questions you ask answered in the depth or with
the speed you need. Sometimes you find that the person working with you doesn’t even work for the franchisor you are interested in. They’re brokers and they only get paid when you buy a franchise from one of their clients. To them, the amount you have to spend, the speed at which you are willing to spend it and the size of the commission check they get from the franchisor are more important than how correct that investment is for you. There are probably no more important questions to ask than whether a franchisor has the financial ability and a track record of meeting its commitment to its franchisees. Take a step back from the hype and pressure of the sale and look for the answers. Finding out about a franchisor’s financial capabilities is not a complicated process but it often requires some investigation outside of the disclosure documents they provide you.
fees they collect from franchisees. That’s understandable because the system is growing and there are not a lot of franchisees yet open. But, as the franchise system matures, more and more of its daily operating income needs to come from more sustainable sources – the continuing royalties paid by its franchisees. No matter how profitable a franchisor is, if it is relying on initial fees to support the system – and franchise sales slow or stop – the franchise system is going to be in jeopardy and that will impact its franchisees. While some franchisors may provide a detailed breakdown of revenue, others that do not may provide you with a supplemental disclosure of this information if you ask. Sometimes if the information is not broken down in the income statement it may be contained in notes to the financial statements. Often though you will have to estimate initial fee revenue based upon clues in the disclosure document that may simply be multiplying the initial franchise fee times the number of new franchises in the
system. Remember though that is not an exact science because area fees, deferrals, etc. will impact your calculation. However, by making your analysis over a few years you will begin to get an understanding of where the system is deriving its income and how much of that income is coming from continuing sources. Your accountant and attorney will be able to help you pull the clues out of the documents. Don’t forget the folks that are already in the trenches – the existing franchisees. They are the most knowledgeable people as they experience the franchisor on a day-to-day basis. They know and can tell you if the franchisor is meeting its commitments on a routine and regular basis and often can provide you with information about the franchisor that outsiders would have no way of determining. —FMM
Michael H. Seid and Kay Marie Ainsley are managing directors of Michael H. Seid & Associates, LLC.
Begin by examining the financial statements provided in their disclosure document – the Uniform Franchise Offering Circular in Item 21. Franchisors are required to provide their audited financial statements for the past three years or for a shorter period if the company has not been in business that long. • Does the franchisor have a history of profitable operations? • Does its Balance Sheet reflect a company that has financial stability? It is essential that you discover whether the franchisor can afford to meet the commitments they are making to you. You are relying not only on the initial services of getting you trained and open for customers, you are relying on them being in business for a long time and growing. Is it sufficient that they are making money? It’s certainly a good sign but that’s not enough. Many franchisors do not disclose the sources of where their income comes from and depending on how long they have been in business and the size of their franchise system, the answer to that question can be critical. When franchise systems are new they often rely to a great extent on the initial franchise www.franmarket.com
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A CONSULTING FIRM IS BORN An SBDC Success Story
Ron Severo and John Picquidio stand proud in front of Pyramid Consulting Group’s new building.
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ith a successful consulting business operating out of his home, Ron Severo approached the University of Pittsburgh SBDC during the technology boom of 1999 to develop a plan to raise expansion financing and accelerate revenue. Started in 1996, Severo’s company, Pyramid Consulting Group, provides software application consulting and programming support for Pittsburgh-area companies. After 3+ years of steady growth, Severo recognized the need to move from his home and into a new space. He wanted to both raise the financing for a new space and increase his revenue base as quickly as possible to create a balanced budget for his company. During the planning for this growth, the technology industry began to slow down, creating nervousness on the part of local financiers. After lengthy discussions with an SBDC consultant, Severo decided that new construction at a prime location would best support Pyramid Consulting’s growth, emerging corporate image, client service, and long-term value. With the SBDC consultant’s assistance, Severo developed a business plan to support the company’s strategic direction and to obtain additional financing. The SBDC also assisted Severo in the management of intangible assets, namely, Pyramid Consulting’s corporate image. On January 19, 2001 Severo moved the company into its own newly constructed corporate office building. On April 2, 2001, the anniversary of Pyramid Consulting’s 6th year of business, Severo
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welcomed John Picquidio to the firm as its newest Partner. Severo attributes the recruitment of Piocquidio, a major player in the software consulting industry, to Pyramid Consulting’s new look and feel based on their new office building, the creation of their latest multi-media CD, and
their Internet/intranet office system, all of which occurred with the help of the SBDC. Pyramid Consulting is another example of a small-business weathering times of economic change to succeed in a strained industry. www.pyramid-group.com
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New Owners Keep Their Company Going & Growing in Portland, OR October 1999 was not a good month for Medical Specialty Solutions of Portland, OR. The company, which provided billing, collection, and other support services for area physician groups, learned that its largest client planned to dissolve at the end of the year. In a matter of months, Medical Specialty Solutions would lose almost half its business, leaving the future of the company and its employees very much in doubt. Julie Karrasik, Director of Business Development, didn’t panic. She simply put her job in high gear, touting the company’s services and recruiting new clients. But Medical Specialty Solutions’ management didn’t share her confidence. Given the company’s uncertain future, several clients decided to take their billing operations in-house. Before long, management decided that they had little choice but to split up the company and sell the various components to interested buyers. That prospect left both clients and employees nervous, but it also presented Julie with an opportunity. She and Director of Operations Diana Smith could team up to buy the medical billing part of the business and keep Medical Specialty Solutions going. “We had never thought of ourselves as business owners,” Julie says. “But we realized that we had invested too much time and effort in the company to leave. We had also made many promises to our new and ongoing clients; going back on our word at this point would not be good business.” Julie and Diana felt they knew how to run a company, but had no idea about how to buy it or set up a corporation. Julie’s husband, a business broker, suggested she contact the SBA for advice. That call led to a referral to the Portland chapter of SCORE. Harry Kane and his fellow volunteer counselor Dan Williamson, a former consulting engineer, helped Julie and Diana formulate their strategy for purchasing Medical Specialty Solutions. Because both women had to literally keep their day jobs to keep the company functioning, most of the counseling sessions took place at night and on weekends. “Harry and Dan took a lot of time out of their private lives to help us,” Diana says. “They knew we were making tough decisions, and they were always there to support us. They made sure we knew how the outcomes would affect the company.” Of particular importance to Julie and Diana was the guidance Harry and Dan provided that helped Medical Specialty Solutions successfully transition to new ownership. “There are so many things to consider, but Harry and Dan made sure we focused first on the mission-critical needs,” Julie says. “That included reassuring our clients and staff, who were naturally nervous about whether the changeover would succeed.” The strategy worked; since Julie and Diana officially took ownership of Medical Specialty Solutions in June 2000, the company has not lost a client or a staff member.
For more success stories, see www.score.org
Writing a Business Plan For a Loan
1 2 3
Begin with a statement of purpose. You should be able to explain your business in 25 words or less.
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Supply three years of projected financial statements. Include income, loss, and cash-flow projections.
Tell how your business will work and why it will be successful. List the owners. Fill in the business details. Describe its products or services, the customers, the market and the competition. List the managers and their credentials.
Provide supporting documents, such as references from creditors and potential clients and suppliers, evidence of insurance and the like.
Brought to you by SCORE “Counselors to America’s Small Business.” www.score.org/
www.franmarket.com
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Entrepreneur Grows Her Sales and Finds Success with SCORE Stephanie Mann had a lifelong passion for interior design. So she decided to start a second career as an entrepreneur by starting her own business, W. Laimon Interiors, which provides services for both residential and commercial clients, including three local churches. Stephanie follows a 5-step process to satisfy her clients’ needs. First, she provides a consultation to understand their vision and needs. Next, she visits the location to get a sense of the scope of the project, and to learn about any space requirements and limitations. She works on schematics to show what is possible and provides layouts that work within budget limitations or furniture arrangements required by her clients. Third, she develops a final set of plans, including custom design work that may need to be done. Next is executing her design plans, and finally, she follows up with her clients to make sure they remain satisfied with the results. Stephanie wanted to grow her business, get more clients, grow her sales and maximize profits, but she wasn’t sure how. Her brother, who owns an international human resources company in Michigan, told her he had visited a local SCORE office and found their advice quite helpful. So Stephanie contacted Fairfield County SCORE and attended a workshop on developing a business plan. “I thought the information was very valuable, and I took home materials from the session to help put together my business plan,” she says. She then began monthly face-to-face counseling sessions with SCORE Counselor Elliot Baritz. “Elliot helped me be accountable to someone for my business,” Stephanie says. “Just having someone to talk to about my business helps me push myself to move to the next business area that I need to work on.” Stephanie worked with Elliot to improve her marketing and advertising, which lead to increasing sales. “Elliot also taught me how to negotiate, which has paid off generously,” she says. “I apply his knowledge to my business and see real dollars and cents results.” The chapter has been so impressed with Stephanie’s success that they’ve asked her to appear as a panelist to offer advice to other SCORE clients. “I’ve benefited tremendously from these networking opportunities,” she says. For more success stories, see www.score.org
Preparing for Change
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Examine your corporate culture to discover any impediments to change. Some traditions and practices may need to be revamped to meet new needs.
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Keep talking about change so that employees think in terms of change and help make it happen.
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Make expectations clear. Key employees should know that embracing change is part of their responsibility.
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Monitor company procedures and systems to be sure they support change.
Plan far ahead for the biggest change of all: your retirement or exit from the company. Develop new leadership.
Brought to you by SCORE “Counselors to America’s Small Business.” www.score.org/
INSIDE SBA
THE SBA CAN HELP YOU START Congratulations on thinking about starting your own business. Each day thousands of people across the United States exercise their independence by creating small businesses.
Small Business Administration and its partners can help at every stage of turning your entrepreneurial dream into a thriving new business. expand your business, obtain government contracts, recover from disaster, and have your voice heard in the federal government..
W
hether your target market is global or just your neighborhood, the U.S. Small Business Administration and its partners can help at every stage of turning your entrepreneurial dream into a thriving new business. If you’re just starting, the SBA and its resources can help you with loans and business management skills. If you’re already in business, you can use the SBA’s resources to help manage and
HELPFUL WEB INFO
You can access the SBA help online 24 hours a day at www.sba.gov or visit one of their local offices for assistance. You can find your local office at our Web site or by checking the government pages of your phone book.
SBA
You can use SBA resources to help organize your thoughts on what type of business you want to open.
Small Business Development Center
SBA resources include district offices in every state and territory, nearly 400 offices of SCORE – Counselors to America’s Small Businesses, and more than 70 Small Business Development Centers (SBDC) primarily located on college campuses. These professionals can also help you with writing a formal business plan, filling out loan applications to finance your business, managing and expanding your business, finding opportunities to sell your goods or services to the government, recovering from disaster or acting as advocates for small businesses with Congress and regulatory agencies.
SBA Business Plan Help
The SBA also has programs for helping special audiences, such as women and veterans become small business owners.
Franchise Registry:
www.sba.gov
SCORE www.score.org
www.sba.gov/sbdc/index.html
www.sba.gov/starting_business/index.html
Business.gov 24/7 access to the critical information businesses need from the federal government: www.business.gov
Services for Women Entrepreneurs: www.sba.gov/women
Franchise Startup Info: www.sba.gov/starting_business/startup/franchise.html
www.franchiseregistry.com
www.franmarket.com
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SMALL BUSINESS SUCCESS
REQUIRES PLANNING Most new business owners who succeed have planned for every phase of their success. Thomas Edison, the great American inventor, once said, “Genius is 1 percent inspiration and 99 percent perspiration.” That same philosophy also applies to starting a business.
SMALL BUSINESS DEVELOPMENT CENTERS Small Business Development Centers, in coordination with federal, state, local and privatesector resources, including funding through a cooperative agreement with the SBA, meet the needs of small businesses and promote economic development in local communities by helping create and retain jobs. SBDCs provide services such as development of business plans, manufacturing assistance, financial packaging assistance, contracting assistance and international trade assistance. Based on client needs, SBDCs tailor their services to meet the evolving needs of the local small business community. As the SBA’s largest non-finance program, SBDCs meet the counseling and training needs of nearly 1 million start-ups or existing business clients annually. For more information, visit the Web site at: www.sba.gov/SBDC
First you’ll need to generate a little bit of perspiration deciding whether you’re the right type of person to start your own business.
START BY EVALUATING YOUR STRENGTHS AND WEAKNESSES. Are you a self-starter? It will be up to you – not someone else telling you – to develop projects, organize your time and follow through on details.
How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers, lawyers, accountants and consultants. Can you deal with a demanding client, an unreliable vendor or a cranky staff person?
How good are you at making decisions? Small business owners are required to make decisions constantly, often quickly, under pressure. Do you have the physical and emotional stamina to run a business? Business ownership can be challenging, fun and exciting. But it’s also a lot of hard work. Can you face 12-hour workdays six or seven days a week?
How well do you plan and organize? Research indicates many business failures could have been avoided through better planning. Good organization – of financials, inventory, schedules, production – can help avoid pitfalls. If you haven’t already done so, after you’ve answered those questions you’ll need to decide what type of business you want to start, and where it will be located. Do you want a home-based business? Want to buy an existing business? How about opening a franchise of a chain business? Each type has advantages, and SBA’s professionals can help you sift through it all. For more information on types of businesses, see page 63.
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Business.gov WRITE A BUSINESS PLAN. After you’ve thought about your business, the next step is to develop a business plan. The business plan is a formal document explaining in some detail your plans to develop a financially successful business. It’s vitally important for two reasons:
MARKETING • Discuss the products and services your company will offer. • Identify customer demand for your products and services. • Identify your market, its size and locations. • Explain how your products and services will be advertised and marketed. • Explain your pricing strategy.
FINANCIAL MANAGEMENT • Preparing a business plan forces you
to think through every aspect of your business. If you need outside money, your business plan will be one of the first things the lender or investor wants to see. • A business plan serves as an
assessment tool for the owner. A comprehensive business plan is not done on the spur of the moment. It can be a long process, and you need good advice. The SBA and its resource partners, including Small Business Development Centers located on many college campuses, and SCORE, Counselors to America’s Small Business, have the expertise to help you craft a winning business plan. You can find the nearest SBDC at: www.sba.gov/sbdc/. The nearest SCORE chapter can be located at www.score.org. You can also find business-plan help on the SBA’s Web site at www.sba.gov/starting_business/index.html.
GOOD BUSINESS PLANS CONTAIN: INTRODUCTION • Give a detailed description of the business and its goals. • Discuss ownership of the business and its legal structure. • List the skills and experience you bring to the business. • Discuss the advantages you and your business have over competitors.
• Explain your source and the amount of initial equity capital. • Develop a monthly operating budget for the first year. • Develop an expected return on investment and monthly cash flow for the first year. • Provide projected income statements, balance sheets for a two-year period. • Discuss your break-even point. • Explain your personal balance sheet and method of compensation. • Discuss who will maintain your accounting records and how they will be kept. • Provide “what if” statements addressing alternative approaches to problems that may develop.
OPERATIONS • Explain how the business will be managed day-to-day. • Discuss hiring, personnel procedures. • Discuss insurance, lease or rent agreements, and issues pertinent to your business. • Account for the equipment necessary to produce your goods or services. • Account for production and delivery of products and services.
CONCLUDING STATEMENT Summarize your business goals and objectives and express your commitment to the success of your business. Once you have completed your business plan, review it with a friend or business associate or SCORE counselor or Small Business Development Center representative. When you feel comfortable with the content and structure, review and discuss it with your lender. Remember, the business plan is a flexible document that should change as your business grows.
Business.gov provides 24/7 access to the critical information businesses need from the federal government. Business.gov is managed by the SBA in partnership with federal agencies providing business-oriented programs and services. You can find links to accurate information on how to comply with federal rules and regulations; all the government forms you’ll need; and tax information from federal and state tax resources, including forms and assistance. Business.gov has thousands of forms issued by more than 40 federal agencies. You’re just a computer click away from help 24-hours a day at www.business.gov
S EC INSIDE SBA
WOMEN BUSINESS OWNERS Women entrepreneurs are changing the face of America’s economy. The SBA serves women entrepreneurs nationwide through its various programs and services, some of which are designed especially for women. There are women’s business ownership representatives in every SBA district office to help women access all
of SBA’s programs and services, including loan guaranties, federal contracting opportunities, training, counseling and more. These local representatives can also provide information about other local resources available for women entrepreneurs.
Another valuable tool available for women business owners and entrepreneurs is the Women’s Business Center Program, funded in part through a cooperative agreement with the SBA. Located across the country, approximately 100 WBCs provide training, technical assistance, counseling and mentoring specifically to women, especially those who are socially and economically disadvantaged. Mindful of the special needs of women entrepreneurs, the centers offer their services at convenient times and places. In addition, some centers provide child care, and many provide their materials in Spanish and other languages, depending on the unique needs of the communities in which they are located. Many classes offered by the centers are either free or charge a small fee. And often there are scholarships to help those who need them. If you can’t get to a Women’s Business Center, the full range of services is available through the SBA’s Web site for women entrepreneurs, which provides access to all of the SBA’s online services, including its extensive library of information, training courses and electronic tools designed to help small businesses. This site also contains information about the services available in local communities. It can be accessed at: www.sba.gov/women.
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WHAT TYPE OF BUSINESS DO YOU WANT? FRANCHISING Franchisees have been active participants in the SBA’s small business loan program for many years.
There are primarily two forms of franchising: 1) product/trade name franchising 2) business format for franchising. In the simplest form of franchising, while you own the business, its operation is governed by the terms of the franchise agreement. For many, this is the chief benefit for franchising. You are able to capitalize on a business format, trade name, trademark and/or support system provided by the franchisor. But you operate as an independent contractor with the ability to make a profit or sustain a loss commensurate with your efforts. There are more than 3,000 franchised businesses. The challenge is to decide on one that both interests you and is a good investment. Many franchising experts suggest that you comparison shop by looking at multiple franchise opportunities before deciding on the one that’s right for you. Some of the things you should look at when evaluating a franchise: profitability, effective financial management and other controls, a good image, integrity and commitment, and a successful industry. If you are concerned about the risk involved in a new, independent business venture, then franchising may be the best business option for you. Remember that hard work, dedication and sacrifice are key elements for success. For more information visit the SBA Web site at: www.sba.gov/starting_business/startup/franchise.html
or visit the Franchise Registry at www.franchiseregistry.com or call your local SBA office.
HOME BASED BUSINESS CONSIDERATIONS
One suggestion is to set up a separate office in your home to create this professional environment.
Going to work used to mean traveling from home to a plant, store or office. Today many people do some or all their work at home. Garages, basements and attics are being transformed into the corporate headquarters of the newest entrepreneurs – the home-based business person.
Before diving headfirst into a homebased business, you must know why you are doing it. To succeed, your business must be based on something greater than a desire to be your own boss. You must plan and make improvements and adjustments along the road.
Working under the same roof where your family lives may not prove to be as easy as it seems. It’s important to work in a professional environment.
Getting Started
Ask yourself these questions – and remember, there are no best or right reasons for starting a home-based business. But it is important to understand what the venture involves.
INSIDE SBA
Ask yourself: • Can I switch from home responsibilities to business work? • Do I have the self-discipline to maintain schedules? • Can I deal with the isolation of working from home? • Am I a self-starter?
FINDING YOUR NICHE Choosing a home business must be approached carefully. Before you invest time, effort and money.
Ask yourself: • Does my home have the space for a business? • Can I identify and describe the business I want to establish? • Can I identify my business product or service? • Is there a demand for that product or service? • Can I successfully run the business from home?
LEGAL REQUIREMENTS A home-based business is subject to many of the same laws and regulations affecting other businesses.
Some general areas include: • Zoning regulations (including certificates of occupancy). If your business operates in violation of them, you could be fined or shut down. • Product restrictions. Certain products cannot be produced in the home. Most states outlaw home production of fireworks, drugs, poisons, explosives, sanitary or medical products and toys. Some states also prohibit home-based businesses from making food, drink or clothing. • Copyrights. Protect thoughts and original writings, recordings, broadcasts. • Federal self-employment tax • Immigration Act. Verifies the eligibility of new employees. • Adequate insurance. Covers liability, property, business interruptions, key persons, autos. • Workers’ Compensation
Be sure to consult an attorney and your state’s department of labor to find out which laws and regulations will affect your business. Additionally, check on registration and accounting requirements needed to open your home-based business. You may need a work certificate or license from the state. Your business name may need to be registered with the state. For home-based businesses, a separate business telephone and bank account are normally required. Also remember, if you have employees you are responsible for withholding income and social-security taxes, and for complying with minimum wage and employee health and safety laws. If you’re convinced that working from home is for you, it’s time to create your business plan. The SBA and its resource partners, such as SCORE and SBDCs can help make the process easier.
CHOOSING YOUR BUSINESS STRUCTURE You may operate your business under one of many organizational structures generally chosen for liability and tax reasons. The most common organizational structures are sole proprietorships, general and limited partnerships, C and S corporations and limited liability companies. Each structure offers options appropriate for different personnel situations and
INSIDE SBA
which affect tax and liability issues. If you’re uncertain where to start, contact the SBA first and you’ll be referred to the proper source.
SOLE PROPRIETORSHIP One person operating a business as an individual is a sole proprietorship. It’s the most common form of business organization. Profits are taxed as income to the owner personally. This rate is usually lower than the corporate tax rates. The owner has complete control of the business, but faces unlimited liability for its debts. There is very little government regulation or reporting.
GENERAL PARTNERSHIP A partnership exists when two or more persons join together in the operation and management of a business. Partnerships are subject to relatively little regulation and are fairly easy to establish. A formal partnership is recommended to address potential conflicts, such as, who will be responsible for performing each task; what, if any, consultation is needed between partners before major decisions, etc. Under a general partnership each partner is liable for all debts of the business. Profits are taxed as income to the partners based on their ownership percentage.
LIMITED PARTNERSHIP Like a general partnership, this is established by an agreement between two or more individuals. However, there are two types of partners. • A general partner has greater control in some aspects of the partnership. For example, only a general partner can decide to dissolve the partnership. General partners have no limits on the dividends they can receive from profit so they incur unlimited liability. • Limited partners typically receive a share of profits based on the prorated amount on their investment, and the liability is similarly limited in proportion to their investment.
“C” CORPORATION A “C” corporation is a legal entity made up of persons who have received a charter legally recognizing the corporation as a separate entity having its own rights, privileges and liabilities, apart
from those of the individuals forming the corporation. It’s the most complex form of business organization and is comprised of shareholders, directors and officers. The corporation can own assets, borrow money and perform business functions without directly involving the owners. Corporations are subject to more government regulation and have the advantage of limited liability, but not total protection from lawsuits.
SUBCHAPTER “S” CORPORATION This is a special section of the Internal Revenue Code and permits a corporation to be taxed as a partnership or sole proprietorship, with profits taxed at the individual, rather than the corporate rate. A business must meet certain requirements for Subchapter C status. Contact the IRS for information.
LLCs and LLPs The limited liability company is a popular business form. It combines selected corporate and partnership characteristics while still maintaining status as a legal entity distinct from its owners. As a separate entity it can acquire assets, incur liabilities and conduct business. It limits
liability for the owners. LLC owners risk only their investment, not personal assets. The limited liability partnership is similar to the LLC, but it is aimed at professional organizations.
S EC T I O N H E R E
[ CLOSINGQUOTES ] Quotes From Successful People
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It’s easy to make a buck. It’s a lot tougher to make a difference. —Tom Brokaw
Challenges are what make life interesting; overcoming them is what makes life meaningful. — Joshua J. Marinel
Success always occurs in private, and failure in full view.
Confidence is the hinge on the door to success.
When you get in a tight place and everything goes against you, until it seems as if you could not hold on a minute longer, never give up then, for that is just the place and time when the tide will turn.
—Anonymous
—Mary O’Hare Dumas
—Harriet Beecher Stowe
Eighty percent of success is showing up. —Woody Allen
The most successful men in the end are those whose success is the result of steady accretion... It is the man who carefully advances step by step, with his mind becoming wider and wider - and progressively better able to grasp any theme or situation - persevering in what he knows to be practical, and concentrating his thought upon it, who is bound to succeed in the greatest degree. —Alexander Graham Bell
It is not rejection itself that people fear, it is the possible consequences of rejection. Preparing to accept those consequences and viewing rejection as a learning experience that will bring you closer to success, will not only help you to conquer the fear of rejection, but help you to appreciate rejection itself. —Bo Bennett
A successful person is one who can lay a firm foundation with the bricks that others throw at him. —David Brink
Success is the ability to go from one failure to another with no loss of enthusiasm. — Sir Winston Churchill
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Success usually comes to those who are too busy to be looking for it.
The doorstep to the temple of wisdom is a knowledge of our own ignorance.
—Henry David Thoreau
— C. H. (Charles Haddon) Spurgeon
Defeat is not the worst of failures. Not to have tried is the true failure.
Nothing is at last sacred but the integrity of your own mind.
—George E. Woodberry
— Ralph Waldo Emerson
There’s nothing “wrong with staying small. You can do big things with a small team.
”
—Jason Fried