Archive for November, 2009

You’re ambitious, you’re innovative, and you’re ready to enterprise your way into the business world. With such a gung-ho attitude, it’s hard to see the positives of buying a franchise instead of starting your own business. After all, why would you pay someone $30,000 or 5 percent of your sales when you could reap all of your own benefits? First and foremost, starting your own business is risky; 70-80 percent of independent businesses fail within the first few critical years. Buy a franchise, though, and your risk of failure drops to a mere 20percent. If those stats aren’t enough, here are five reasons I bought into franchising and why we continue to expand using this model:

  1. We are on the same team. Royalties increase as your sales increase. What that means is that when you need the most support,you get it while you have the lowest sales. A franchisor in this way bets on your success by giving you the most value early on in hopes of a long-term mutually beneficial relationship.
  2. Technology. In today’s market almost every small business needs a techie, but what small business can afford one? In my business experience, we have spent hundreds of thousands of dollars developing cutting edge software to run our company. When you are a small business that is not something you can typically afford. You shouldn’t have to focus on outsourcing, tinkering, and trying to get it right when your focus needs to be on sales and service the first few months.
  3. Buying power. When you are part of a larger organization you are able to participate in the savings that only large franchise networks enjoy. In some cases the savings may go beyond your royalty.
  4. Network. There are lots of ways to increase your network and thereby benefit by the knowledge of those around you, but when you are part of a franchise network you have access to the knowledge of every other franchisee in the company. This means that you have the chance to learn from all of their mistakes and successes.
  5. Branding. Check out this article on the value of the world’s top brands. This year the Coca Cola brand was estimated to be worth a whopping $68 Billion dollars. That’s Billion with a “B!” McDonalds, America’s golden arches, hit $32 Billion. Brands are worth something huge, and that brand power is made by a franchisor and franchisee working together to build that brand. When you buy a franchise, you get a piece of that the day you join.

The Power of Networking

Posted by admin under Networking

I have been in “business” since I was 15. The second job I landed (my first being Harvey’s, where I won employee of the month) was at McDonalds. Some would say that was an upgrade over Harvey’s. I can say that it was my first exposure to a well run franchise system complete with uniforms, state of the art video training and how to smile. While working at McDonalds, my father, who has been a great example of entrepreneurship suggested that I start a business. Having absolutely know idea what I was getting into I said sure.

Well four years later I grew under my Father’s mentorship a Canadian wide distribution business in the fishing arena. Walking into fishing shops across Canada I quickly learned the art of the sale and the power of networking. My Father had made many friends in the fishing business have spent far too much money at many of the same retailers I would soon sell my wares to. Without knowing it, I was using the power of networking to build my business from the 1st day I opened doors. During this time period I did not spend 1 dollar on any advertising or marketing. Everything was done through seminars, direct sales and the odd fishing article I would write for several publishers.

Today I run Five Star Painting, America’s 2nd largest painting franchise system with franchisees in Canada, the USA and Mexico. If it sounds like I am boasting somewhat, I can’t help it. I am very proud of what our team has accomplished. With this as a backdrop you may be able to guess what is the one of the most effective marketing tactics employed by our franchisees. Networking. It represents nearly 30% of each franchisee’s business, and has among the highest close ratios on estimates. The cost of networking is time and a few dollars, but the power of networking pays dividends for years. It is the foundation of success for many of America’s small businesses.

If you are just starting out and would like some shortcut tips here are a few of best groups to hit up for a good network.

BNI – networking group that comes with a small membership fee and regular breakfast meetings. The group is focused on lead generation through the network

LeTip –  similar to BNI

Chamber of commerce – honestly I can say that the success of your chamber membership depends largely on how the chamber is run. I have seen great success to nothing.

Twitter

Linkedin – this one is a must for any business professional.

If you have other networking groups you think should be added feel free to leave a comment.

How To Stain Concrete

Posted by admin under Painting Tips

I have been working now on finishing my basement for about eight months. This is the 8th basement that I have finished with some help of friends. For some reason I start these projects with vigor and excitement. I would say 80% of what I do I really enjoy, but almost without exception I get tired of working evenings on weekends on a project that just won’t die.

Well, a few nights ago I had renewed energy to get it done and did something for the first time. We have a craft room in our basement and decided to leave the floor as concrete. My wife and I discussed various options and decided that sealing the concrete was critical to keeping the dust down in the house and we wanted to have something unique. Well we got something unique all right.

If you haven’t heard of it there are various products out there for staining, or sealing concrete. Now here is where you can all learn from my mistakes.

The process of staining concrete goes something like this:

  1. Clean – make sure that surface that you are working on is clean of all dust and dirt, and any burrs are removed and swept or vacuumed up.
  2. Etching – this part is really important. An acid needs to be applied to the cement to prepare the cement for the stain that will be applied in step 3. The mistake I made here is pouring the acid mix on the floor and then rolling it on everywhere to make sure it was all covered. The acid is the most potent when it first hits to cement. So, if you pour it on the cement, the acid leaves (although you can’t see this) a spill effect that the stain will sink it to most. To do this step properly, I would recommend getting a container that can be pressurized and pump the acid evenly so that it reacts evenly on the whole floor.
  3. Remove the acid – next you need to either power wash the remaining acid off or mopping up and cleaning the floor thoroughly
  4. Apply the stain – I used a pressurized container to apply the stain and a roller to make sure it was applied evenly. This worked great, except because I didn’t do step 2 properly the stain took on a spill look that came from the application of the acid.
  5. Apply the clear coat. Using the same pressurized container I applied evenly the clear coat, and once again rolled the clear coat on evenly to make sure the entire floor was covered. this step is very important as this is what seals the concrete and projects the stain coat.

Each of the steps needs about 24 hours to wait let the liquid dry etc. All told it was three nights, and about 3 or 4 hours total work. I have attached a picture of the actual floor after the project was finished.

You may ask what I am doing this project on my own if I own a painting franchise system. Looking back I realize that this is one of the big reasons why Five Star does so well. More often than not Five Star is called to complete or fix projects by people like myself.

I have spent about five years now involved in scouting as a leader and volunteer for the youth in the communities I have lived in. I just got back from working on an eagle project that was planned by one of our scouts in our troop. If you haven’t been a part of one of these projects I highly recommend you do.

As a father to 4, soon to be 5 children I can say that I have come to appreciate more on the influence good leaders have on raising children. I have heard that it takes a community to raise a child, and so I have been putting in my hours now for youth in hopes that this will come back some what to my children as they get to that age where scout leaders become important.

Philanthropic interests aside, getting involved in scouting has been a great way for young men to learn more about leadership, sales, service, self discipline, and goal setting all of which help any individual be a better business person.

Our project tonight was working on creating a nature walk on a local community path. the young man in charge built some attractive signs, with descriptions of some of the animals, plants, and rivers to be found along the foot path. There were about 13 people that were a part of the project, all of whom had to be recruited by this soon to be Eagle Scout. These kinds of opportunities to motivate, lead and direct a small group of people are few and far between for a 15 year young man.

As we were walking back from the project one of the other young men commented on his eagle project. Fortunately community service can be contagious.

If you are thinking of working in the scouting program and would like to get involved with some eagle scout projects, click here for a good resource and ideas.

Financing Your Franchise

Posted by admin under Franchise

I have been in the business of selling franchises for some time now and one of the most common questions I get is “do you offer financing?”. The answer to this question is yes, but which one of five ways would you like to go about obtaining financing your business?

In this market, we have seen a decline in banks stepping up offering the capital to get into business, although this is starting to change. What I have seen more and more of, is using a 401k to approach the franchise purchase. In this market with volatile returns, that thankfully have come back somewhat, what better person to bet your money on then yourself?

Back in 1999-2001 I spent some time trading, and did fairly well, but when the market started to tank I decided to get out of stocks and invest in a myself. I haven’t looked back since then and I would encourage you to look for ways to put a few dollars down on yourself.

If you are interested in looking into using your 401k to finance your franchise there are a few groups out there that can help you. Benetrends, and Franfund are both well known. I have come to know Randy Staples, an upstanding lawyer who really has pioneered this approach. Feel free to look him up and let him know I sent you.

Check out the Finance Purchase Plan.

Why you should start fishing if you haven’t already

My father raised me to be an avid angler. When I was growing up, he and I spent every moment we could muster out on the water. Maybe it’s my love of fishing or maybe it’s just the fishing pictures that I’ve hung in my office, but I’ve come to relate fishing to business.

Have you ever had those days out on the lake where everyone is catching fish after fish and some poor sap next to you hasn’t even felt a tug all day? Or maybe you’ve been that poor sap… Here’s one tip that may help:  “When the mayflies are hatching, don’t be throwing worms.” Fish are programmed to look for what nature provides (like mayflies during a mayfly hatch), so be the one that gives them what they are looking for and you will make the catch.

Similarly, we at Five Star Painting have figured out that customers are not looking for exterior paint jobs during Christmas time, so we don’t waste our time and money marketing exterior painting in the winter. When is your mayfly hatch in your business or industry? If you don’t know then now is the time to start finding out. Just like fishing, there are plenty of resources to help you understand your business and its cycles so you can give your customers what they want when they want it

Here are a few online resources you can tap into to gather some free data on your market/industry:

  • Over 100 industry pages are available. These pages display a ‘snapshot’ of national data obtained from different BLS surveys and programs. The data shown are based on the North American Industry Classification System (NAICS) super sector, sector, and industry level.
  • BizStats is the home of free, accurate business statistics – well organized and easy to access.
  • You have to pay to get the information from Hoovers, but they are one of the best on the web.

I just hooked into a great tool to track phone calls for ROI measurement on advertising. I have seen several out there that do this, such as ifbyphone.com, whoscalling.com and mongoosemetrics.com. All of these services are quite expensive if you want to set up 100 numbers, and the cost per minute adds up. In doing my research I found a service called Call Fire that only charges $3 to set up a local number and $1 a month to keep it up, and then .05c a minute. If you want to track lots of numbers and record the calls this has been a great resource.

If you would like to hear how we have done so far with it fire me ping me.

How to help your business turn lemons into lemonade to survive and thrive through the bad economy

lemon

I can’t help it; I have to say it. Plug your ears if you don’t want to hear:  recession. *Sigh*the “R” word. Sure, this has always been one of those words that we’ve tried to dance around, fiddle and twist, but now there’s no denying it; we are in a recession. So what are you going to do about it? Try this tried and true optimistic mantra:  “I refuse to participate in the recession.” Okay, well just saying it isn’t going to make it happen, but here’s some advice to move past the “R” word and back into the black.

  1. Network. It’s not enough anymore to simply be passionate about your business. You need to make sure other people are excited about your business too! Networking is a natural way to grow your business. I have seen amazing things come from something as simple as a business breakfast.Utilize your Myspace, Friendster, Facebook, and Twitter accounts (don’t be afraid!). Whether it is making a reservation at a local restaurant, logging into the social networking sites, or participating in trade shows, you need to make personal connections with potential clients and you need to get your name out there.
  2. Differentiate. If you look like every other business then the recession is going to hit you the same way it hits them (and that’s a hard hit). Know how and why your business is better than your competitors and be able to offer substantial and compelling proof. Don’t fall into the swing of the “best price” battle that happens with similarly operating companies—stand out and entice the customer by offering new stakes.
  3. Broaden. Develop new channels of opportunities.Eventually, every stream of prospects is going to trickle down and run dry. If you are not developing new channels to obtain opportunities then you are setting yourself up for a rather disappointing surprise. Increase your business and protect yourself from any future financial blows by turning on more clientele-flowing faucets.
  4. Walk. Shoe Leather Marketing becomes (for whatever reason) a very efficient way to promote your business during a recession. Whether this is due to summer break-ridden college students willing to work hard for commission or because you are reaching a great number of people with little effort, it doesn’t matter. The fact is that in the recession, door-to-door businesses thrive. So set up your summer sales program!

Why Did You Franchise?

Posted by admin under Franchise

I had a call today from someone in the painting industry wondering what made us franchise our business. For about 20 minutes we reviewed his business, and how he has gone about growing it. As I thought back with full 20/20 vision I came to conclusion that franchising is not for everybody.

Here is why:

  1. Investment. Be prepared to invest a lot of money in your Franchise system. This is critical, because if you hope to one day collect a franchise fee you had better have something worth paying for.
  2. Experience. If you don’t know someone that has done franchising you need to find someone fast. Franchising is not just about royalties, and franchise fees, it is about creating value, creating a brand, and being a good partner. This is critical, and I can’t express enough how important this piece of the puzzle is. Unfortunately there are some systems out there who are only interested in the fees they collect. If you are in business for the long haul, and I would recommend that you should be, you need to have someone who understands the relationship between franchisee and franchisor and can help you execute on making that relationship come off the way it should.
  3. Not everything should be franchised. I have often used, and heard the expression “you can’t franchise mediocracy” and it is true. Before you start franchising your business be sure you have something worth franchising.
  4. I hope you don’t need sleep. Like anything worth having, a franchise company is going to take a lot of work, mind time, dedication and difficult moments. Nothing was more exciting than adding our first franchisee to our system, and nothing was more difficult than losing our first franchisee.

All this being said, Five Star Painting has been the most exciting, rewarding, fun business I have ever been a part of. If you hope to one day franchise your business, make sure you surround yourself with people ready to go on a journey and brace yourself for some exciting times.

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