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Taking the first step toward business ownership

You have always wanted to own your own business but just have not been able to get past the first step of owning the dream.  The first step in the process is always the hardest be it starting a new business or starting a new fitness program.  Changing our lives even for the better, takes action, and action that brings about real change in our lives is hard.

In my experience from working with those that do take the plunge, there are three main reasons that prevent people from exploring what the possibility of business ownership might look like.

  1. Fear! Change is scary and it takes guts to step out of your comfort zone and say, I want to do something that others may think is risky or even stupid.  It is easier to keep the status quo then try at something new and fail!  What will other people think?  What if I succeed?  How will this impact my life as I know it today?  But what are the consequences of not trying to change your life?  Opportunities missed can be far more costly then failing at something you have always wanted to try.
  2. Financial Uncertainty! How much money do I need to start a business or buy a franchise? Do I need everything up front or can some be financed?  I can honestly tell you from experience that most people feel like they just don’t have enough money in the bank to start a business or buy a franchise.  When in reality, the money needed is far less than you might think.  Of course, you will need financing and the overall investment might seem scary at first.   However, if the business model is solid the income from the business should be able to pay down the debt and support you at the same time.
  3. Not believing people can help! If you have never started a business or investigated business opportunities or franchises available, it may seem like the process is just too much for you to handle.  When you start your research on-line you are inundated with sales calls and e-mails from people trying to sell you what they have to offer.  So, rather than reach out for help you try to go it alone and end up frustrated and overwhelmed.  There are people that can help if you let them, but you need to be able to tell the difference between those that want to help and those that want to sell you on their concept.  Rather than go it alone, search for some help from qualified and reviewed business brokers or consultants.  These are people that will help you to better understand yourself and what you want from a business as well as introduce you to quality, well vetted opportunities that fit both you and your budget. org is also an organization that can help.  This is a government funded mentoring program that will help you map out a plan and find the resources you need to make your business a reality.

Go ahead, take the first step, and connect with someone to help you explore what business ownership might mean for you.  The exploration of what might be possible is the action that is needed to find out if change is in your future and what not taking the next step might cost you in the long run.

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The Pros and Cons of Purchasing a Franchise

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Thinking about how you can take your annual income to the next level? You may have heard about some of the advantages buying a franchise offers.

With the economy waking up from its COVID-induced hibernation, lots of business-savvy entrepreneurs, investors and leaders are taking interest in buying franchises. A well-managed franchise affords predictable revenue and costs and can be a reliable framework for rapid scaling. Smart business leaders can turn a franchise strategy into a powerful stream of passive income.

However, buying a franchise isn’t for everyone. More locked down than other entrepreneurial endeavors, some creators and thinkers don’t like the regulations and rules you have to respect when operating a franchise. By contrast, other businesspeople appreciate the sense of structure.

Here are the pros and cons of purchasing a franchise for you to consider.

Con: Royalties

It is standard for a brand to charge ongoing royalty fees to their franchisees. This can be between 4% and 6% of the yearly gross revenue. This is something to consider when determining how much you can make off of a franchise and should definitely be a question when selecting a franchise brand. One of the great things about working with a professional broker in the space like TEC Resource Center is that we can help you do the math and evaluate options from a cost to revenue perspective.

Con: Limited Creativity

For the same reason buying a franchise is great for someone not interested in establishing something new, owning a franchise might not be for someone who loves to create. Franchises often have strict rules and procedures for how certain things need to happen, so there are limited options for you to make changes or innovate if you have a mind to do so.

Con: Lack of Control

Many franchises require strict adherence to inside processes. For example, many fast-food franchises require you to purchase basic ingredients directly from them. These items could easily be purchased elsewhere, but the agreement requires you to purchase from the brand. This is something to consider when you are choosing your franchise brand. At TEC Resource Center we know how to help our clients safely navigate and evaluate the kinds of risks.

Con: Outside Reputation

There are a lot of good things about being a part of a larger brand, but it also means that a lot of things are out of your control. If other locations, or the brand as a whole, gets bad publicity for any reason, that can reflect negatively on your location and decrease sales even though you haven’t done anything wrong.

Pro: Proven Product

One of the best parts about buying a franchise is that you are joining a business after the product has already been tried and tested. Why go through the time-intensive, risk-laden process of inventing your own company if someone else is already offering you theirs? Franchised brands are already successful, so there is a lower risk when selling their product.

Pro: Established Marketing

If you purchase a popular brand, you also purchase all the marketing that already exists. McDonalds is the prime example. When you buy a franchise, you already have the reputation and international branding that McDonalds has accumulated over years in the fast-food business. At TEC Resource Center, we provide you with a simple comparison of all the brands available so that you can make the most informed decision possible when choosing your franchise.

Pro: Fewer Decisions

When you start a business from scratch, you have to determine the processes and branding. You have to choose a mascot, the motto, the color scheme, everything. When you purchase an established franchise, all of that work has already been done for you. That makes purchasing a franchise a great option for someone who thrives on management more than creation.

Pro: Ongoing Support

Working with a franchise is a great option for businesspeople hoping to succeed in an industry where they might not have as much experience.  Franchisors will often provide the training and direction necessary to get started, so you don’t need to have a lot of experience or knowledge in the field. This is also great for highly experienced businesspersons who don’t want to dedicate the time or bandwidth to learn something new. The direction provided by the franchise cuts out a lot of that personal research and time that a new product or business requires.

Pro: Easier Access to Funding

Because a franchised brand is already established, banks feel more confident in your ability to follow through on a loan. You are much more likely to have a loan for a franchise approved than for a new brand or product. Having access to this kind of capital means that you are free to scale your franchise strategy much more than if you were running your own business.

Pro TIP: Get Professional Help

There is a lot of information you need to collect when deciding which franchise you want to purchase. Some of that information isn’t always available to the average person, so hiring a professional is the best way to set yourself up for success. Expert franchise advice, like we offer here at TEC Resource Center, can help you locate the best deals, highest quality brands, and be a mediator as you negotiate with a brand. This can result in thousands of dollars in savings, and even more savings in hassle and headache.

The best part? This service comes at No Cost to you! A franchise broker acts as an intermediary between the franchisor and the potential franchisee (You).  We are paid by the seller (Franchisor) if and when a franchise is awarded.

If you have additional questions about how purchasing a franchise could double or triple your yearly income, schedule a free 15-minute call to speak with an expert at the following link – TEC Schedule

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Franchising is not only for the wealthy!

Franchising

I was speaking with some friends and family this weekend about franchising and some of the opportunities that are available in the market today.  I was struck by the reaction of the people in the room.  They almost immediately dismissed the idea of looking at a franchise because they thought it was out of their reach financially.  When people think about franchises, they think about the large empire brands like McDonald’s and Buffalo Wild Wings, where you need substantial assets to even have a conversation, if you could get them on the phone.

According to FRANdata.com, there have been 1,749 new franchise brands introduced to the US since 2012.  These franchises represent 29 different industries and 188 business sectors.  The next time you think about franchise opportunities know that it reaches far beyond McDonald’s, and in fact far beyond the restaurant and food industry.  So, who are these new franchises and where did they come from?

Franchising has become rapidly accepted as a path to national expansion.  86% of the new brands introduced since 2012 are successful business owners who believe they can grow faster with the help of a team of franchisees who are responsible for their individual territories.  That is what franchising is all about after all.  It is a successful business owner who needs talented and dedicated people willing to believe in and grow his company.

According to the International Franchise Association (IFA), almost 4% of all small businesses in the U.S. are franchises.  It is an industry that generates $2.1 trillion and employs 18 million Americans.  Most people invest in a franchise because it is a proven business model that provides a greater assurance of success in a shorter period of time.  Many of the clients I work with have already proven they can be successful at growing a business while working at their corporate job as a division manager or sales leader.  A franchise offers the same type of structure while affording the franchisee a greater return on their time and investment.

The fact is that there are many franchise opportunities out there that will allow you to invest in your future without risking your entire life savings.  To compile their list of top-rated franchises each year, Franchise Business Review surveys thousands of franchisees, from hundreds of leading franchise brands, to gauge franchisee satisfaction and performance.  The Franchise Business Review provided a list of the Top 100 Low-Cost Franchises of 2020, where the cash required to invest ranged from a low of $5,000 to a high of $125,000, with most requiring less than $50,000 to get started.  So, the next time you are thinking about venturing out on your own, remember there are opportunities out there for everyone brave enough to take a chance on themselves.

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Franchise Trends

While 2020 has been absolutely devastating for some franchise sectors, it is not all bad news.  As the world transforms itself in preparation for the post pandemic new normal many business sectors have seen significant growth.  Home Services, Elder Care and Cleaning Services have all seen significant growth in 2020 with excellent forecasts for 2021.

When looking for a franchise you should consider what the pandemic has done to change the way people look at life on a go forward basis.  A significant number of workers will never transition back to the corporate office, instead opting to maintain their virtual/ home office environments.  The elderly population has now become resistant to centers of care that put them at higher risk for the spread of infections in the future, again opting to receive care at home.

When looking for a business opportunity to take the place of your ex-corporate job, be sure to research these trends to ensure the franchise you select has a bright forecast for the future.  Ask the Franchisor the hard questions.

  • How was their business impacted by the pandemic?
  • What do future trends look like for the business, post pandemic?
  • What kind of support did they give their franchisees that were negatively impacted?
  • How many franchisees left the business in 2020 and why?

When you are considering buying a franchise you need to understand the stability and integrity of your potential franchisor partner.  Those franchises that are successful long term stand with their franchisees through the good times and the bad.

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Seeking A New Opportunity

Millions of Americans have been laid off, furloughed, or otherwise misplaced from the career path they were on before the pandemic turned the economy upside down.  LinkedIn is filled with people searching for that next great opportunity.

There are a couple of paths you can take when you find yourself in this situation.  You can brush up your resume and actively search for the perfect new job, or you can use this time to start that business you have always been looking to start.  As a SCORE mentor I have seen a marked increase in the number of people feeling courageous enough to finally pull the trigger on business ownership.  To some it sounds too risky, but history shows that economic down turns have yielded some successful startups.  Hewlett-Packard, Microsoft, Mailchimp, and Uber were all started during a recession.

When you take a minute to think about it, if you are talented enough to run a multimillion-dollar division for your employer, why wouldn’t you be successful in your own business?  The government has stepped in to help with SBA financing plans that will help to defer the initial cashflow issues, and interest rates remain at all-time lows.  So, you have to ask yourself – is now the right time for you to explore business ownership?

Obviously, there are many things to be considered when looking for a new business opportunity.  Things like market size, market access, cash flow management, and many others all need to be considered before diving in.  The most important thing however, is far easier to consider yet most often gets overlooked.  Without it even the most successful ventures are sure to fail over time.

The factor to remember above all others lives inside and can only be evaluated by the new business owner.  As they say, beauty is in the eyes of the beholder.  Only you can determine if you will have a passion for the work and will be able to stay with it long enough to make the venture a success.

If you are working with a broker to help you locate a business, be honest about what you are passionate about.  Don’t let the potential ROI push you into doing something you are going to really hate doing every day.  As the saying goes – “love what you do, and you will never work a day in your life”.  Here is to having the courage to find out what we love to do and living the dream!

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