Archive for the ‘Franchise’ Category

Have you ever heard the phrase “It’s the little things that count?” I have found this not only to be true in life but also in business.

Recently I had four people try to name all 50 states in 6 minutes. The thing I noticed is that people forgot about the smaller states (Delaware, Rhode Island, Vermont, etc) I found this ironic because a lot of these were the first states that were organized and the first ones we learn about in school (the 13 colonies) And yet, these smaller ones are the ones that slip out the mind the most. Often times when people are starting a franchise, they have the big stuff in mind, but they forget about the little things that are important and effective too.

When starting a franchise, often times the little, important details are forgotten. Things like “Who am I going to hire for this position? When will I officially be open? How many years can I see myself doing this?”

Remember that the little things are just as important as the big things in franchises.

 

Remember in school how you could have big plans for the weekend but then the teacher gives you a paper to write that is due on Monday? I am sure at some point in time most of us have been tempted to skip a homework assignment to go out and do something that was genuinely more exciting than sitting around doing repetitive reading and writing.

Opening a new franchise business can be compared to that teacher and the class can be compared to regular, 9-5 job.  During normal working hours, you can study page after page for advice and tips on what to do, but once “class” is over, that is where your homework begins. The difference is that now, blowing off your homework could potentially cost you money, not just grades.

When opening a franchise business, it’s important to do your homework so you know what exactly you are getting into and how to solve problems that may come up.  Do the research! Decisions that are made when you first start out can affect the long-term results of your business. According to entrepreneur.com, some decisions to consider include:

Know Your Franchisor- Study them. Learn their background, ask what their five and 10 year plans are and find out if their short, and long term goals agree with yours.

Financing- Understand your financial commitments. Ask yourself questions like: “How long can I stay in debt? What are my expectations for Return On Investment? What sales tactics can I use to reach these expectations?”

Location and Lease Negotiation- Do your homework. Have a professional look at your lease.  Look at the demographics for successful locations in the brand and try to duplicate that in your own search.

Don’t overburden yourself by doing too much homework for your franchise business at once.  Remember, your teacher didn’t give you all the tests, midterms and finals in the same day! Spread it out and take time to learn the material.

 

Do you remember the first time you took a 10-meter dive? I still catch myself reliving that moment. My stomach bunched in knots, and I felt all shades of fear while doubt whirled around my head. Taking the plunge for the first time can be petrifying. But there are those who dive from great heights with ease, turning it into an art. Both my mind and my muscles confirmed that my first dive was far from perfect.

 

You don’t have to be a novice diver to empathize with the sensations “AHHHHHHHHH!” and “WHAT WAS I THINKING?” Life alone offers enough opportunities to take the figurative dive, especially when you open your first business. Just like with diving, there are techniques first time businessowners can keep in mind to get their business off on the right foot, despite the accompanying sensations of an emotional free-fall. 1. Ready. Are you ready? The best way to answer this question is to interview fellow business owners who survived the plunge and study how they did it. You need to wrap your mind around the paradigm shift of working for the man to becoming the man. Are you ready for people to depend on you for a paycheck? Are you ready for long hours and sleepless nights? Owning your own business holds great potential for fulfillment and financial success. However, business ownership will also be one of the most difficult things you will ever accomplish– are you ready for it?

2. Set. The next step is to ensure your business structure is sound and plan how you’ll launch it. When you’re diving, you must choose your landing: a belly flop, a pencil dive, a swan dive, or flailing around and hoping you won’t break something. This is comparable to structuring your business because it determines how you “land” once you’re serving customers. People often turn to franchising because they are investing in a business whose structure has been tested and proven successful. And there are a multitude of industries and sectors to choose from, so they can still own a business they are passionate about. Also, buying a franchise resembles hiring a personal trainer coach you on diving like a pro before your feet ever leave the rock.

3. Go. Once your feet are over nothing but air, remember there is no going back. From this point on, you need to be wholly devoted to landing your figurative dive. Have you ever seen a diver float back to solid ground after falling 5 of the 10-meters? Launching your business is no different.

As someone who’s been starting and growing businesses for the past 20 years, I can say it is the most difficult and most satisfying thing I’ve done (that includes my 10-meter dive!). If you would like to discuss starting your own business, feel free to contact me at @DScottAbbott or sabbott@fivestarfranchising.com.

 

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

Who has watched the movie (or will at least admit to watching it) Megamind? You know that part where the bad guy asks Megamind what the difference is between a villain and a super villain? His response is my favorite part of that movie, and probably among my top 5 parts of any movie watched ever – PRESENTATION!

So I went to Subway today at the local gas station on the corner by our offices. This gas station was packed, subway was packed, the convenience store was packed. By all accounts, I would have to say it was among the busiest gas stations I have been at for a while. I noticed as I was ordering my lunch that the store manager, and what looked like another manager, were carefully washing the windows with a squeegee. They painstakingly removed every dust particle or stain from both sides. The job was done immaculately and as Megamind would say, their presentation made this gas station a super station.

This exact same gas station, just a few months ago was dead. Nobody. Crickets. That’s right, this station had the exact same location, but under different management had an arby’s, as well as convenience store, and gas pumps. Everything was always filthy, the outside, the inside, the shelves were not stocked properly, the restaurant was a mess, and the gas pumps rarely had fuel in them. Yes, the gas pumps at the gas station didn’t work because there was rarely gas. Now, this process took a few years to deteriorate to the point that new management bought the station from old management and turned it around in a matter of weeks.

They say in Real estate that location, location, location is what matters, and is the most important decision you can make. I say, ya, pretty important, but that doesn’t mean you can forget the lesson Megamind teaches us. You need PRESENTATION!

One of the life bloods of franchising is lead flow. Not much different than another of our franchisees business, or any sales and marketing company; you need to be bringing in new blood all the time. At Five Star we are constantly measuring lead flow, sales cycles, velocity, close ratios, and other various metrics to make sure we are on track. Recently, in a sales meeting we discussed two things that we could do to increase our franchise sales.

1) Volume. This can mean so many things, but it can start at the very beginning of the sales cycle – impressions, or in the middle – leads, or in the end – contracts signed. The reality is that you need to be constantly reviewing ways to increase the volume of people looking at your concept, so, that they can express interest and enter into the journey of learning if your franchise concept if the right fit for them. Here are a few ideas on ways you could amp up the volume:

a. Cast a wider net. For example, if you are advertising for the word painting franchise, why not consider something like home based business, or service industry franchises in your online advertising. Some people know what they want, and others have an idea.
b. Use different channels. Online advertising is a fantastic tool that can be approached through SEO, Pay-Per-Click, affiliates, directories, and on and on. However, what about trying something different like Career Builder, or Monster.com? Business brokers is a channel that many franchisors use to get in front of candidates, and many of them use these techniques themselves. Why not try your hand at marketing to the right candidates directly?
c. PR. Public Relations is a tricky tool that few are able to wield effectively. I have approached this different ways for different concepts. The key is that if you aren’t using PR in your marketing mix you should think about doing it now. Have no money to hire and expert you say? Well then pick up the phone and pitch your cool concept yourself until someone gives you the time of day. You need some independently written articles by a quality publication saying your cool instead of that testimonial from your grandma.
d. Social Media – yes, believe it or not I have had people contact me through my blog, Facebook page, and twitter account to request information about one of our brands. So how do you find the time? Well its 12am right now, so, now you know.

2) Efficiency. Getting more eyeballs on your web page is your first mission. Your second mission is to get them to click that submit button. Marketing is scientific, so, please, don’t make this about guy checks. Yes, you can start there, but measure, tweak, measure, tweak, measure, tweak until finally you can tell me you are at 25% conversion rates. 5 years ago I would have told you it wasn’t possible, but, today our team has moved the virtual mountains and now enjoy the results. This is something you can never stop thinking about. Here is a quick example of what we have done over the years.
Go to www.fivestarpaintingfranchise.net this site is our old franchise site. We have tweaked this site dozens of times, and it runs at about a 10% conversion rate. If you go to www.5starfranchising.com you will find very cool information and well-designed research site. This site is below 1%. Now if you go to www.fivestarpaintingfranchise.com you will see our main franchise site for Five Star Painting. I have many times shared these sites with people and have asked the question of which one they prefer, and which one they though would do best. Please remember, that the goal of your franchise site is to generate enough interest to get someone to click the submit button and begin the dialogue.

Of course there is more to franchise lead generation than this. So, with that being said: what do you do that works?

Sometimes the best way to learn something is to either do it wrong yourself or learn from someone else’s mistakes. I have had the pleasure of doing both. If you are thinking of franchising your business you have probably read, or been told about the pot at the end of the rainbow. Well like anything in life, if it is worth having, it’s going to be a lot of work. Here are three tips to avoid some disasters and maybe help you catch the leprechaun:

1) Mess of pottage. Why trade your franchisor birthright for a few dollars? In franchising, someone looking to buy your franchise will pay you a handsome franchise fee, some concepts as high as $50,000 at signing. The franchise fee is there to do a few things, like get skin in the game, cover the costs of attracting top talent to your franchise system, pay the tuition for all of you’ve learned, fund development of systems, etc. The challenge with such large franchise fees is that it’s often more money than you will get in royalties for a few years. Because of this, franchisors are more excited about closing that big deal than all the hard work to earn the royalties that come from years of business building; they trade their birthright to a share in a successful business for a short term boost to the bottom line. Some franchisors take all this money, go on a nice vacation, buy a new car, and don’t follow through with support. Not only is this not ethical, in my opinion, but it is extremely short sighted. Don’t fall into that trap, stay the course, support your franchisees, and make sure each and every golden goose is well fed and cared for.

2) Dictatorship. So, you’ve convinced a few people to buy your concept and on top of all that you have your 90 page franchise agreement signed, that some high priced lawyers put together for you. All the bases are covered- and the sweet talk stops, honeymoon is over and it’s down to business. Yikes. Nobody like being told what to do; if someone was smart enough to buy your franchise, they are probably smart enough to learn from your team, as well as your fellow franchisees. People like to be influenced, led, and shown your vision. Help them buy into not just your business model but, you and your team by demonstrating why your next big idea is one that they should adopt. I recently read a book called The Science of Influence; definitely one worth reviewing for those of you looking to see who prefer to use the carrot over the stick.

3) Partnership. I have often heard that a partnership is a sinking ship. In saying this, I will say that I have been fortunate to have some amazing partners, and that I have experienced the dark side of partnerships as well. When you consider growing your business, it is critical you get your business structure right, and if you have partners, roles and responsibilities are going to be critical to your success. Whether you form a partnership or not, there needs to be one President, CEO, Chief Pooh-Bah, or whatever title you make up. Every company needs a leader, so don’t make the mistake of approaching your business like a marriage, unless, you are into divorce.

There are plenty more things you could do to mess things up, but, I believe, if you watch for these land mines you are well on your way. Feel free to share your views on ones I missed.

Utah 100

Posted by admin under Business, Entrepreneur, Franchise

Utah 100 PictureThis year, Chad Jones and I had the opportunity to attend the Utah 100 awards ceremony at the Grand America Hotel in Salt Lake City. The room was packed. There were probably around 500 people there. 130 of the companies were there that were winners of some kind, including Five Star Painting. The Utah 100 honors the 100 fastest growing companies in all of Utah. At the ceremony, we learned we placed 33rd among the top 100 fastest growing businesses. We could not be more pleased and proud.  We have won some awards in the past but have never before placed in the Utah 100. There are many great companies who placed this year and we are so excited to be numbered among them.

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As a franchiser and a strong believer in the franchise business model, it might be surprising to hear me say that franchising is not for everyone, but it’s true. There are certain reasons that would (and should) deter even the best entrepreneur from becoming a franchisee:

1.       The opportunity you’re looking for doesn’t fit a franchise mold.

There are lots of franchising opportunities available and odds are you will probably be able to find an opportunity that fits your particular interest… unless you’re interested in an industry that really shouldn’t be franchised. Certain businesses simply do not fit a franchise model, such as a farm or a computer chip manufacturing plant. The process of franchising consists of fragmenting and spreading a business over a more widespread territory – in the case of a farm or computer manufacturing plant, taking business away from the epicenter in order to “expand” would only weaken the company. If you are set on franchising, make sure it’s for an industry that can support successful franchises.

2.       You are not well-financed

Do you have the money to franchise?By the nature of the beast, when you buy a franchise you are going to spend thousands of dollars at the beginning. You are paying for the years and years of research and experience that multiple owners, founders and partners have utilized to create a successful, well-supported system – think of it as your “tuition.” Keep in mind that this franchise fee costs much less than the costs of the mistakes you will make if you try to start a company on your own. It is worthwhile to avoid those mistakes that only experience can prevent by buying into a franchise. But if you don’t have capital for start-up, you won’t be able to buy into a franchise and you certainly won’t be able to finance a start-up business of your own. If this is the case, try being an employee for a while. Make money while gaining experience until you have the money and ability to run a successful business.

3.       You have a strong independent streak

Many subscribe to the idea, “If you want something done right, you have to do it yourself.” That mentality will destroy an organization. Successful franchises are based on a team effort, especially within a service industry like Five Star Painting or Five Star Holiday Décor. Running a business takes a lot of knowledge and experience in a number of different specialties. For a franchisee to be successful he needs to trust the corporate team’s expertise.  Five Star, for instance, provides personalized websites complete with a slew of search engine optimization and management

'Lone Ranger' types don't want to rely on others to get the job done.

'Lone Ranger' types don't want to rely on others to get the job done.

campaigns. We also provide a comprehensive 24-hour sales and support center complete with a first-contact lead system, marketing planning and management. Franchisees are also provided the Five Star branding as well as in0house software that produces accurate computerized estimates, reports and customer tracking.

There are some people who feel a strong need to be in control of everything, that it has to be done their way. They believe they’re “my customers” and no one else can talk to them. That’s the individual that wants to be in business all by himself – book keeping, finance, every single department run by himself.  These types of people make great consultants. They can be a successful one-man show, but they can’t run an operation. If you’re looking into starting a business but aren’t looking for help, franchising is not for you.

Interested in franchising? Well today is your lucky day. Five Star Painting focuses on franchising as a means to increase growth. Franchising represents one of the largest economic drivers in the Unites States today, representing nearly nine percent of gross domestic product. The franchise model attracts entrepreneurs from all walks of life looking to take advantage of Five Star’s years of experience in the painting industry. It is widely accepted that most small businesses fail in the first three years, the franchise model has been shown to increase the likelihood of success. This success is partly due to the combined buying power and brain power of entrepreneurs under one brand.

The painting industry is estimated at nearly $100 billion annually, is it one of the oldest and largest industries in America. It is not difficult to understand why; with ever changing trends, homeowners and business owners are regularly changing the interior and exterior paint colors of their homes and businesses. The result is a stable and growing industry.

If interested in learning more about opening up a Five Star Painting franchise in your area, click here.

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