Archive for the ‘Running a Business’ Category

It’s an exciting moment when you’re ready to enterprise your way into the business world. People often look into business ownership to increase their financial security and to be their own boss. With these motivators, why would anybody choose to buy a franchise rather than start a business from scratch? Purchasing a franchise means paying someone $30,000 and royalty fees– money which could go into your pocket.

People choose to franchise for many reasons. First and foremost, starting a business from scratch is risky and there are statistics to back this up. In the Emyth: Revisited, Michael Gerber states that 80% of start up businesses fail within the first five years. That’s 29% higher than the number of Americans who get divorced. However, when you buy a franchise, that risk of failure drops to 20 percent.

There are many factors that contribute to this latter statistic. I’m only going to discuss four:

  • We’re on the same team. At first blush, royalty fees seem like a one-way street where the franchisor makes their profit off your hard work. It’s important to understand that royalties increase as your sales increase. So, yes, the franchisor does profit in the long run from you buying a franchise. However, his success is contingent upon your success, making him personally invested in giving you the support to help you succeed.
  • Technology. The majority of small businesses can’t afford the tech support they need to help their business grow and compete with big businesses. In my business experience, we’ve spent hundreds of thousands of dollars developing cutting edge software to run our company. Not only did this cost a lot of money, but it also shifted our focus and resources on tinkering and outsourcing in order to get the software right. Start-up businesses can’t afford to divert their attention from the sales and customer service that will keep their business running.
  • Network. While it’s true that anyone can expand their network to learn from other industry professionals (especially with access to Google+, Twitter, and Facebook), being part of a franchise network includes you in a community of other franchisees whose mistakes and successes you can learn from.
  • Branding. When you buy a franchise, you receive a piece of a very large pie. For instance, this year, Coca-Cola is estimated to be worth $68 billion. McDonald’s is estimated at $32 billion. Check out this article, “2012 Best Retail Brands” to see the value of the world’s top brands. Brand power is made by a symbiotic relationship between franchisor and franchisee as they work together to build that brand and increase the size of their pie.

Having turned a start-up business into a franchise, I have watched our franchisees avoid many of the hurdles my partners and I have had to overcome simply because they are part of an established system.

Scott Abbott
CEO, Five Star Franchising
www.fivestarfranchising.com

The 5% Rule

Posted by admin under Branding, Growth, Running a Business

Do you matter? When your customer looks at your place in the community, state, and world, do you
show up on the radar? Building your position in the minds of your customers is key. Building your
position in the minds of your employees is vital. Building your position in your own mind is critical.

We live in a place so covered with advertising messages that you can no longer afford to be “just
another business” to your customers or anyone else. If you aren’t near the top, you are on the compost
heap. If you aren’t taking steps to grow into the best company you can be, you have a one-way express
ticket to the bottom.

So what are you going to do about it?

Start by using the rule of 5%. Ask yourself, “If we were to improve our business by just 5% this
quarter, what would we do first? Where would we start?” Then go to work. You can set your own
benchmarks to get there, but get there. It doesn’t sound like a large number, but if you set a goal that
is easy to reach then harder goals become more reachable. Don’t set your sights too low, of course.
Stretch yourself and try to be the best company you can but don’t aim for anything less than 5%.

The funny thing about 5% is that it has a domino effect. You will be surprised at how much MORE
your business increases than just 5%. Usually, those little things that you have been putting off are the
foundations for much bigger operations. They are the building blocks of your company’s future. That
means that one of those little details on your to-do list may move you farther than you ever dreamed it
could.

What is on your 5% list?

Being an entrepreneur isn’t easy, that’s for sure. It takes hard work, discipline and effort to
live the life of freedom you want. But what about those days when you just can’t get started?
What do you do to keep moving when the aches and pains catch up with you and every bone
in your body is telling you to climb back in bed? How do you get your head back in the game
and push yourself to do more?

1: Routine. Never underestimate the power of habit. If you have a routine you follow to
the letter every morning then you’ll be up and going without even thinking about it. Forming
an automatic routine can take anywhere from 30 to 66 days. So for the next 60 days or so
make a commitment to yourself that you will do the same things in the same order every
morning. Get out of bed, eat breakfast, brush your teeth, get dressed and go to work. Every
day it will get easier to jump out of bed in the morning.

2: Exercise. If you’ve spent any time around serial entrepreneurs then you’ve probably
been given a lecture about the importance of physical fitness. On top of keeping yourself in
top shape, daily exercise also stimulates serotonin, the “feel good” hormone in your brain.
Get moving; it will make you feel better!

3: Take time for you. It’s easy to get lost in the day-to-day details of running a company
and one major reason for burnout is that entrepreneurs tend to forget to take time for
themselves. There’s a classic quote from Abraham Lincoln that says “People are just about
as happy as they make up their minds to be.” So make up your mind to take some time for
yourself. Read a book, have a good meal, get a massage, or just play with your dog/cat/kids.
Even half an hour here and there can make a huge difference.

4: Mark Your Progress. Setting goals in business isn’t just important but is also vital.
Along with setting goals, it is important to have milestones set up along the way to mark
your progress. It is always more fun to go to work when you feel like you are accomplishing
something.

5: Get Some Perspective. Go outside and take a walk. Get some fresh air, breathe
deeply, think things through and let your mind wander. Sometimes all you need to feel
motivated is just a short break.

I have been coaching soccer now for about five years. I started with our oldest boy and have continued on with the program in the spring and fall. I would have to say that I look forward to soccer more than the boys do. There is something about bringing together a team and working towards a goal. Seeing progress at practice and on the field is very rewarding. Regardless of the players, a good team will out play and win a poor team with a few superstars.

What does soccer have to do with running a painting company?

  1. Practice. Just today I spent a few hours with one of our newest franchisees as we went through the business, preparing forecasts, and committing to certain tactics that are proven to work in the field. This is an exercise every business owner should engage in regularly. It is the art of visualizing a business on a spreadsheet that gives you the foundation to go out and execute. To keep your COGS (cost of goods sold) in line. To ask for the close and keep your close ratio to projections.
  2. Teams win. In the service industry you need your team to work like a well oiled machine. Our sales center offers the backstop support for our strikers. They are confident that if they are working hard at trying to put the ball in the net. Understanding that their back is covered to make sure every call that comes in is serviced, and sent back to them to score. In today’s environment, your team is everyone on the field with you, and off the field cheering for you. Involving your significant-other or advisors in your success and failures gives you perspective and encouragement to get out there and make it happen.
  3. Don’t run around like a chicken with your head cut off. In the service industry this is especially relevant. You can waste valuable energy trying to run that ball up and down the field when the pass would have gotten it there twice as fast. In business, you need to be able to delegate, pass the buck, and involve others in your success.

One of the most rewarding parts of business is in the perfect execution of a sale from the moment the opportunity presents itself, all the way through production and payment. It takes practice working like a team and efficient use of your resources to pull it off.

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