Entrepreneur

Interview: The Franchise King

Posted by 22 January, 2009 (4) Comment

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This is an interview with The Franchise King, Joel Libava. He is a franchise expert and was nice enough to give us his insight into the franchise world. You can find out more about him on his blog, http://thefranchiseking.typepad.com.

1. Can you start out by telling us a little about yourself?

I am a Cleveland, Ohio based franchise consultant, blogger, and marketer. My late father, Jerry Libava, was one of the first real franchise consultant/brokers, back in 1991. I joined the firm in 2001, after being downsized {fired} from a management position in the Automotive franchise industry.

2. Why should people consult you prior to considering a franchise?

Because they don’t know what they don’t know. A lot of folks that I talk with have blinders on; they are thinking food, food, food, when it comes to franchising. There are so many different opportunities out there. There is really nothing wrong with investing in a food-related franchise. {If you have real life food industry-restaurant experience} One can do very well in a franchise that cooks and serves food. It’s a matter of lifestyle. If someone with previous restaurant experience invests in a food type of franchise, they have a much better chance of being successful, because they know what they are in for; super-long hours, big time employee turnover issues, and a high investment.

Another reason to consult with someone like me is that I have access to opportunities that they may not yet know about. A great reason that one may want to talk with me, before they embark on their franchise adventure is that I am independent. I get to choose which franchise companies that I want to work with, and help grow. I used to be  with a large national franchise brokerage group, and they told me who to work with. I have lots of latitude, and lots of very unique franchise concepts that I work with.

Finally, one should consider working with a franchise consultant or broker because they usually know what types of franchises are doing things right, and which ones are not.

3. What type of person fits the franchise mold?

Here is my one sentence answer:

Someone who is ok working and following someone else’s business idea and business system.

4. The economy is down. Should people look at franchising right now?

Yes, it is certainly ok to look. I am recommending that people be very careful about what types of franchise opportunities they are exploring. Here is some food for thought; In a down economy, are consumers buying what they want, or what they need? Investigate opportunities that provide a need. The ones that provide a want, may not do as well in a recession. Another words, would you rather be the franchise owner of a senior care franchise, or an upscale massage studio? I am not saying that investing in any one of the 3-4 massage studio franchises is a bad thing. What I am suggesting is that watching consumer spending trends during tough times is well worth it.

5. I stress alternative income, known to some as passive income. Are there any franchise avenues that allow a person to own a franchise part time or better yet, hands free?

There are very few legitimate franchise opportunities that allow for part-time ownership involvement. Franchises like Great Clips, and Best Cuts are examples of franchises that actually encourage their franchise owners to keep their jobs for awhile, while they are ramping things up. They are not the hairdressers, anyway. As for hands-free franchise ownership, I don’t know of any opportunities like that.

6. If someone was interested in owning a franchise, can you give us some resources that would be of value?

I suggest spending some quality time with some of the major search engines, and type in several different words that include franchise of business opportunities. This will lead you to articles, franchise news sites, and maybe even some opinions from current and former franchise owners, that could prove to be valuable. I also recommend reading anything that has to do with trends in franchising. See what the future looks like. There are a number of book out about franchising. Just go to your local library or bookstore.

7. Is there anything else you’d like to add?

Yes. These are difficult times, and anyone who tells you otherwise, or tries to convince you that this is actually the best time to invest, is not living right. It is what it is. For now. Things will get better. Personally, I just finished the toughest year I have ever experienced. It was so tough, that in order to cut my expenses, I have moved my office to my home. It was not my 1st choice, but I had to do it. I am actually enjoying it, so far, though.

One more thing. If anyone you know is looking for a franchise, I always suggest that they work with a local franchise consultant/broker. Number one, they know the local area, and hopefully have great connections that can assist them with legal and real estate issues. Number two, by working with local consultant/brokers, the fees that they are paid by the franchise companies stay local, which contributes to the local economy. I know that it may not sound important, but it is.

My info:

The Franchise King, Joel Libava

franpro@sbcglobal.net

216-831-2610

877-262-2816

Company website:

http://www.FranchiseSelectionSpecialists.com

Award winning Franchise blog:

http://thefranchiseking.typepad.com

My e-book on How to Research a Franchise:

http://www.FranchiseResearchSteps.com

Photo by: Tony the Misfit

Related Posts:

Interview: Do You Have What It Takes to Own a Franchise?
Interview: So You Want to Own a Franchise?
Case Study: My Adventures in Forex Trading
Interview: 2 Million Dollars Made in Network Marketing – It’s All About Leadership!
Do You Squidoo?

Categories : Entrepreneur Tags : ,

Case Study: My Adventures in Forex Trading

Posted by 15 January, 2009 (22) Comment

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Welcome to our Forex Case Study on Happiness Is Better.

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I am being coached by Forex expert, Mindy Yost. She has been Forex trading for over 8 years and full time for 6 years. I will be detailing my progress through a monthly report. I opened a demo account and am currently trading under her guidance through Skype (wow, Skype is really handy!). Skype is essentially an internet-based phone/text communication service (VOIP).

To start off our training, Mindy had me read through a handy website, Baby Pips. If you’ve never heard of Forex before, it stands for the foreign exchange (currency) market. Forex trading is the buying or selling of a currency “pair” and the one that I am learning about is the Euro paired with the US Dollar and is called the EUR/USD.  In the Forex world, there is a thing known as a pip. I had heard the term pip before, but I really didn’t understand what it meant. A pip is the increment by which a currency pair is measured for trading purposes. In the case of the EUR/USD, a pip is 1/100th of a cent and would be displayed as $0.0001. Baby Pips explains a pip as “if the EUR/USD moves from 1.2250 to 1.2251, that is ONE PIP. A pip is the last decimal place of a quotation. The Pip is how you measure your profit or loss.” The Pip VALUE however is a little different and is determined by the size of the trade you make. In Forex trading you cannot trade one EUR/USD at a time. Forex is traded in 100,000 units at a time in a standard account, and 10,000 at a time in a mini account.  I am using a mini account so the pip value when I trade one mini lot is $1.00 ($0.0001 X 10,000). So, when I am in a trade, I will earn or lose $1.00 for each pip the market moves. If I were to trade multiple mini lots at a time, the pip value would be determined by multiplying $1.00 times the number of mini lots I made the trade for. Basically, the more pips the market moves in the direction of my trade the better! If the market moves against my trade, that can be a bad thing. But, as Mindy says, the market can only do two things – go up or go down, so if you are willing to wait it out, your trade will probably be profitable sooner or later (if you have enough money in your account to cover the loss before the market goes your way).

So what makes Forex trading so attractive? One major advantage Forex trading has over traditional stocks is leverage. Leverage means that when you make a Forex trade, you essentially only put down a small deposit for the trade.  In most cases the Leverage Ratio is 200:1. So, when I do a one mini lot trade, instead of fronting $10,000 to make that trade, I only put up a $50 deposit to control the 10,000 units in the mini lot. Another new term to me is that of a “Margin Call”. In Forex trading, the Brokerage House will not let you lose more money that is in your account, so if your trade go so far negative, that you no longer have any more money to cover any additional loss on you trade, they will close your trade at the accrued loss.  This means that you will have lost a lot of money and is a bad thing, but, unlike some other venues, at least they will not call you up and ask for even MORE money! Leverage is always a double edged sword, and can work for you or against you. One thing that Mindy has stressed to me is the importance of properly funding your account. The best way to protect yourself in Forex is to “over fund” your account and put way more money in it that what you expect to trade with and then make small trades. Also, remember these things: 1) do not open an account with money you can’t afford to lose, 1) do not open an account with “a little” money as a test-the-waters type of trial, and 3) don’t trade Forex unless you have nerves of steel. You can properly fund your account yet trade in small quantities to minimize risk while you are getting your feet wet. However, if you do not properly fund your account, you run into the possibility of having the broker perform a margin call and lose your money. Another attractive feature of Forex is that it’s a large market that can’t be altered or controlled by a few people. To give you an idea of the enormity of Forex, about $4 trillion is exchanged daily compared to $25 billion exchanged on the New York Stock Exchange. There are also no commissions charged by the brokers and you can trade basically 24 hours a day, 7 days a week.

If you are interested in Forex trading, it is advisable that you read through School of Pipsology on Baby Pips and if you want to contact Mindy for mentoring, let me know (happinessisbetter@gmail.com) and I will give you her email address.

It’ll be at least a month or two before I start trading with real money, but in the mean time I’ll be showing you the results of my demo account.

Here is our first report on how we are doing with our demo account.

ACCOUNT SUMMARY
Beginning Balance 15,000.00
Comm Trading Commission 0
Rollover Rollover Fee 19.6
PnL Profit/Loss of Trade 466.2
Depos Deposit 0
Withd Withdrawal 0
Option Options Payout 0
Comm Options Commission 0
AdminFee Administrative fee 0
MngFee Management Fee 0
PerfFee Performance Fee 0
Void Deposit Rollback 0
ASPComm ASP Commission 0
MargInterest Interest on Usable Margin 0
Ending Balance 15,485.80
Floating P/L -1,955.80
Equity 13,530.00
Necessary Margin 300
Usable Margin 13,230.00

We’ve profited $466.20 because we are trading in a mini account and we are only trading one unit (we are cautious and HIGHLY suggested by Mindy) at a time. If you look at the Floating P/L, you will notice we are -$1955.80 in the hole. As previously stated, we have not lost that money because we have not re-exchanged the currency pair. Mindy has told us that the market always goes up and goes down, and as long as you are willing and able to hold onto the trade, we will more than likely not lose money.

Stay Tuned!

Do you trade in Forex? How do you like it?

Photo by: Zack Attack

Other Posts:

Interview: 2 Million Dollars Made in Network Marketing – It’s All About Leadership!
6 Reasons Why I Joined Toastmasters
Goals for 2009
Goals from 2008 – How Did I Do?
Interview: Do You Have What It Takes to Own a Franchise?

Categories : Alternative Income,Entrepreneur,Personal Finance Tags : , ,

Interview: 2 Million Dollars Made in Network Marketing – It’s All About Leadership!

Posted by 12 January, 2009 (0) Comment

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We were pleased to have Bradley Bowden do an interview on Happiness Is Better. You can find Bradley on his humor blog, Outside My Brain or through Twitter.

1. Could you tell us a little about yourself?

I am a natural born leader whose strongest quality is motivation. I created S.A.V.E (Students Against Vandalizing Earth) at Azusa Pacific University, where I attended. This organization created unique ways for the University to utilize recycle programs, educated the student body on eco-friendly living and participated in a “Get out the vote” campaign for a California State Proposition.

I then began building one of the largest organizations in Pre-Paid Legal Services in 1992, which profited me well over 2 million. I then sold my extremely successful business in 2008.

I was also a very successful trainer with world renown Anthony Robbins. I was put on the fast track with Mr. Robbin’s organization and blew away the competition at every stage. My experience from Mastery University has equipped me to lead thousands through both personal and business successes.

I am also an accomplished key note speaker and excel at training individuals as well as groups in multiple areas of focus. I am also very well known in social media circles as “OutsideMyBrain”, which shows my lively personality. I continue to hone my skills and stretch my abilities beyond my imagination every chance I get. My sole focus is to help others succeed as far as they are willing to go.

2. You’ve said that you were in Prepaid Legal in the past. How were you introduced to Prepaid Legal?

I was introduced to Pre-Paid Legal by a friend. She took me to see a gentleman by the name of Woody Alexander. Woody simply recited the “If you were my attorney” story and showed me the compensation plan and I was hooked.

3. What attracted you to Prepaid Legal versus the other network marketing companies out there?

It was such a simple concept. The key to any Network Marketing venture is that it has to be simple to explain and not require a huge amount of storage space. Since PPL was a service, there was simply no product to store and the presentation was incredibly simple. I’m also a huge fan of the Stair-Step Break-away commission structure. It’s one of the only plans out there that let’s you work deep into your organization (if necessary) and not get pinched financially for it.

4. I was actually in Prepaid Legal myself for a while. I still have the service because I like having quick and inexpensive access to a team of lawyers. I don’t consider my Prepaid Legal endeavor a success. What do you think you did that allowed you to be as successful as you were and become financially independent?

That’s a great question and if answered correctly would take four pages, but I’ll try to boil it down to just the main points. The first thing that forced me to be successful, which sort of answers question #4 is that I went full-time right out of the gate. Now, I don’t recommend any doing this, because it can be very stressful, however, I had no other choice but to sit down, crank out the phone calls, go on appointments and get people to join me in the business.

I believe that constantly listening to motivational tapes and working on improving myself and making myself a better person also led to my success. If you want to attract better people into your business, you have to become a better person. The great thing is that you don’t have to completely change overnight. If you just concentrate on making a 1/3 of 1% improvement every day, your life will be 100% better within one year.

One of the other critical factors was always watching what I ate and working out 3-5 times a week. Your energy level has a lot to do with your success. If you are completely wiped out and tired all of the time, you won’t have the energy it takes to go the extra mile.

Again, I could write a book, just on this subject, but I will leave you with one more. “If it is to be, it’s up to me”. No one is going to build your business for you. And, most of the time, the people that you bring in to your business aren’t going to build it either.

I implemented a concept in my team called “Links and Leaders”. Everyone you come in contact with is either a “Link” or a “Leader”. A “Link” will connect you to either another “Link” or another “Leader”. Leaders are few and far between, so you will end up with far more “Links” than you will “Leaders”. However, you must have the “Links” to be able to find the “Leaders”. So, it is your job to work through each “Link” until, until, until, UNTIL you have found a “Leader”. Otherwise, that line will die off and you’ll have to go out and recruit another person to replace the one you lost. Working through means just that, find out who the person you brought into the business knows. Get in front of those people either in person, or over the phone. Once you get someone they know to join you, you do the same thing with that person’s warm market.

Once you have found a “Leader” (which I discovered is usually somewhere between 4-6 levels away from you – I had one strong leader that was on my 14th generation) then you invest your time into training that person, live with them if you have to. Make sure that they are successful and most ofthe time, you will end up getting the people above that “Leader” excited as a result of all of the activity in their organization. OK, that one was a bonus!

5. How long were you in Prepaid Legal before you were able to walk away from your job?

As I mentioned, I went full-time from the get go. As a result, I made $55,000 my first year, $96,000 my second year, $160,000 my third and it just continued to grow from there.

6. You have since sold your Prepaid Legal business. Why did you do that? It seems like lifetime residual income would be a great thing.

I sold the business for personal reasons. A life time of residual income is a good thing which is why I am launching my own company with my wife.

7. You are now starting a new chapter in your life. Can you tell us more about your new company?

The new company is called Green Shield International. We are building the world’s largest “Green” referral network giving individuals the opportunity to profit from helping people reduce their carbon footprints.

The fact remains that the majority of people in the world, 95%, do not enjoy sales. And, a good portion of them hate it. So, it is insane to assume that everyone that gets into your business is going become a super star (or do anything for that matter). However, everyone always tells their friends, neighbors and relatives whenever they have found a good deal, or purchased a great product that they really like.

So we are creating a system that allows people to “refer” people into the business, or just to purchase the products, without having to do the work/presentation. We are going to overlap a “referral “ structure with a Direct Sales structure. They will complement each other in the fact that the “referral” marketing will provide a never ending supply of leads for the Direct Sales team and the “referrers” don’t have the do the sales, but will get paid a “referral fee” whenever someone they referred purchases one of our products.

We are starting with products that will reduce people’s energy bills by more than the cost of financing the products. Therefore, there is really no out-of-pocket costs for our products, we are simply transferring money sent to the utility companies to our company in exchange for “green” products that when installed, will reduce the consumer’s energy bills by at least 25%.

Although we will be adding more products as the company evolves, we are starting with two main products. The first product is Radiant Barrier Reflective Insulation, which when placed on top of the existing insulation, or stapled to the rafters, reflects 97% of the sun’s radiant heat away from the home and it also keeps the heat in the home during the winter. Our second product is a Kilowatt power reducer which is installed on your electricity wires right before your meter. It reduces the amount of power that is sent through the meter without affecting the appliances in the home. In reality the surplus energy that is pumped into a home or business is wasted. This unit reduces the amount of power thereby saving the homeowner on their electricity bills.

8. Is there anything else you’d like to share with us?

Did you know that to produce one Kilowatt hour of electricity it takes one pound of coal? The average family consumes 1300 Kilowatt hours per month. That’s 7.5 tons of coal per family per year. The residue from burning coal, termed Coal Ash, is worse for the environment than nuclear waste.

Although we will be initially launching the business in the Dallas/Ft. Worth Metroplex, we are out to change the world. To make it a better place to live and to give families the ability to earn extra income. Many individuals who see the vision could become millionaires with our company. So therefore, our motto (coined by my wife, Alison) is “Get Green – Going Green™”.

©2009 Bradley Bowden

Bradley Bowden

Bradley’s Contact Information:

Humor Blog: Outside My Brain
Self-Improvement Blog: Outside My Brain Again
Business Website Green Shield International
Social Media:
Facebook:
Bradley Bowden
Twitter: OutsideMyBrain
StumbleUpon: OutsideMyBrain

Other Posts You May Enjoy:

Goals for 2009
Goals from 2008 – How Did I Do?
6 Reasons Why I Joined Toastmasters
Interview: Do You Have What It Takes to Own a Franchise?

Categories : Entrepreneur,Environment Tags : , , ,

Interview: Do You Have What It Takes to Own a Franchise?

Posted by 25 December, 2008 (4) Comment

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This is the second part of two part series on franchising direct from franchising experts. In the first article, I was fortunate enough to speak with Leslie Kuban who is a consultant to people interested in franchising. In this article, I was fortunate to have Paul Segreto answer a few questions to give his perspective on franchising.

1. Can you tell me a little about yourself?

Paul:

Utilizing over twenty years’ experience as a senior level franchise executive, multi-unit franchisee and area developer, I started a coaching / consulting business As Founder and President of 21st Century Franchise Coach I am dedicated to franchise success at all levels. Complemented by a strong drive and passion towards establishing and building interdependent franchise relationships, I provide practical, innovative business solutions and comprehensive services to all segments of the franchise industry.

2. How did you become a franchise coach?

Paul:

More than anything, I believe in interdependent relationships and a franchise relationship should be just that in order for it to be successful. Unfortunately, as in many industries, people aren’t always what they seem to be on the surface and relationships suffer. Ultimately, businesses may fail as a result. My passion is to build and develop interdependent relationships and I’ve dedicated myself to franchise success at all levels.

3. If someone was interested in owning a franchise, what questions should they be asking themselves?

Paul:

Money and education being no object, what would be your ideal job? Why?

Do you consider yourself a leader? Why?

Would you describe yourself as a “people” person? Why?

What are your strongest personal attributes? Explain.

What are your personal weaknesses? Explain.

When thinking about business ownership, what excites you? What frightens you?

How will owning your own business help you realize your wishes, hopes and dreams?

Do you have the support of your family?

4. When I imagine a franchise, McDonald’s and Quizno’s pop into my mind. A large upfront investment also comes to mind. Do most successful franchises require large up front investments?

Paul:

Initial investments vary greatly based upon the franchise concept and industry segment. For instance a hospitality franchise (hotel) would command a total investment over one million dollars with initial cash requirements at two hundred fifty thousand or more. On the flip side I know of a networking franchise with total investment of less than twenty five thousand dollars and initial cash requirements at ten thousand dollars. Ultimatley, the answer to your question is yes, an initial investment is required equal to approximately twenty to twenty five percent of total investment. Of course, the candidate must be credit worthy to secure financing for the balance.

5. One of the topics I stress on my blog is passive income. Is there such an avenue in the franchising world (or at least close to it)?

Paul:

Yes there is but more so on the executive levels of franchising commonly referred to as Master Franchising. This business model affords the master franchisee the opportunity to share in royalty payments and franchise fees in return for subfranchising the concept to franchisees below him. This usually requires a large initial investment and covers a wide area, even statewide in some areas of the country and could be extremely financially rewarding.

6. A lot of business and families are financially stressed at the present time. Is this a very good time to be looking at opening a franchise?

Paul:

Historically franchising has seen explosive growth during a recession as many individuals are tired of be frightened about layoffs and are disillusioned by low or no returns on their investments. Instead, many choose to control their own destiny and venture out on their own. The safety net is a franchise because it is a proven business system where they’re in business for themselves but not by themselves.

7. Is there anything you would like to add?

Paul:

Franchises are not for true entrepreneurs. Franchisees must follow the business system provided by the franchise company with no exceptions where a true entrepreneur is more of a maverick and will try different things and take greater risks. That being said, it’s imperative a franchise candidate understand he will need to work harder than ever before and must wear many different hats in order to succeed. Many transitioning executives that venture into franchising ultimately fail because there is virtually no one to delegate to as in the corporate world and essential things fall by the wayside. Such as a P & L statement!

_____________________________________________________________________

I want to thank Paul for his time. Do you have any questions for Paul? I find it interesting that franchising has seen explosive growth during a recession, but he does make valid points! Have you thought about opening a franchise? I love comments!

Photo By: Striatic

Other Posts:

Interview: So You Want to Own a Franchise?
The 3 Myths of Happiness
17 Ways to Save the Planet
The Biggest Bailout Ever
Is Happiness Viral?

Categories : Entrepreneur Tags : ,

Interview: So You Want to Own a Franchise?

Posted by 23 December, 2008 (6) Comment

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A lot of Americans wish to work for themselves. One way to do that is through franchising. Franchising allows a person to set up a turn-key business in many instances with established systems in place. Having taken a look at Franchising.org, it was fascinating to see the sort of economic impact franchising has on the U.S.

HOW WIDESPREAD IS FRANCHISING?

The answer may surprise you.  By 2001, there were 767,483 business establishments in all domestic franchise systems (either owned by franchisors and franchisees), which employed almost 10 million people, with direct output close to $625 billion, and a payroll of $230 billion.  These establishments account for significant percentage of all establishments in many important lines of business: 56.3% in quick service restaurants, 18.2% in lodging, 14.2% in retail food, and 13.1% in table/full service restaurants.

I was fortunate enough to have two franchising experts who allowed me to ask them a few questions. This is a two part post, the first of which is an interview with franchising expert Leslie Kuban.

1. Can you tell me a little about yourself?

Leslie:

I have lived in Atlanta most of my life but feel more like a Midwestern girl; my folks are both from Ohio.   Vanderbilt University is my Alma Mater; I have a BA in Communications and also attended Leeds University in Leeds, England for one term.   When I am not assisting corporate professionals leverage their corporate success and experience into franchise businesses that they own, I am enjoying many personal interests; tennis, latin dancing, crafts, writing, yoga, cooking and entertaining to name just a few.
Feburary 2009 will mark my ten year anniversary as a franchise advisor and franchise owner with FranNet.    It has been a wonderful experience and I still have as much passion for doing this work as when I first started.   I am among the first to see up and coming growth franchise opportunities entering the Atlanta market place, which is exciting.   Franchise ownership has been very good to me in terms of personal satisfaction, lifestyle balance, and financial reward; helping others enjoy the pride, independence, and success that franchise business ownership can provide is work in which I feel a lot of pride.

2. I see that you have owned a Mail Boxes Etc. (currently a UPS store). Can you tell us about your experiences with that (good and not so favorable)?

Leslie:

Being a part of the Mail Boxes Etc. family was a super experience for me.   I learned a lot about managing financials of a small business, managing employees, customer service, and working within a franchise team.   It prepared me for the work that I now do.

3. You are currently a franchise owner at FranNet which is a franchise consulting business. What have you most enjoyed most/least about FranNet as compared with Mail Boxes Etc?

Leslie:

MBE was a great business and group of people; I learned however, that retail is not the best fit for me.    My personality is much better suited to a marketing and consulting oriented business with much greater daily flexibility and variety.    The day to day experience of running MBE stores became mundane because it was routine.   In my FranNet business, I work from home, every day is different and I meet new people all the time; this is a much more suitable “business lifestyle” for me.

4. If someone was interested in owning a franchise, what questions should they be asking themselves?

Leslie:

The search for the right franchise does not begin with looking at lists of franchise opportunities in magazines or on web sites.  It begins by looking in the mirror and asking:

~What is motivating me to own my own business?
~What specific results would I need from a business in terms of financial return (income and future equity value) and personal lifestyle for this franchise business to be a justifiable investment of my time and money?  In what time frame?
~What are my best skills?  Sales? Marketing? Customer Service? People Management?
~What do I NOT want to have to do in a business?
~How will I support my personal expenses for the first 6-12 months of launching the business when I am not likely to be able to pull a pay check from the business?
~How much of my liquid capital can I realistically and comfortably part with to start a business that is a good fit for me and that will allow me to fulfill my goals?

There are many more questions that must be asked; these are the starters.   From here, we reverse-engineer forward to what the business is that matches these criteria.  Too often people choose a franchise because they love the product or service as a customer and then realize that they are not suited to own and run that type of business from a skill, lifestyle, and/or financial position.

5. When I imagine a franchise, McDonald’s and Quizno’s pop into my mind. A large upfront investment also comes to mind. Do most successful franchises require large up front investments?

Leslie:

This is the best news!   There is no correlation between the upfront cost of a business and how successful or profitable it can be.   Large fast food franchises have a high start up investment need because of the real estate, the playground, all the equipment and inventory, a large payroll, tremendous expenditure in marketing, not because they are “better” franchises.   There are countless lower cost service opportunities that yield an equal or higher return than franchises with higher start up costs.   Find the lowest cost franchise that fits your motivations, needs, skills, and wallet.  Why risk any more than you have to meet your needs and goals; that is the FranNet mantra.   When coaching my clients, I advise them that they need to have 6-12 months of personal living expenses set aside to pay the bills at home during the ramp period.   On top of that, a minimum investment of $40,000 is likely required to capitalize a franchise business.    Home equity lines of credit, self directed IRA rollovers are the most popular sources of funds people are using to fund franchise businesses.   SBA lenders are still making small business loans but their requirements are even tighter than they were prior to Sept. 08; I have found this to be the least favorable way to fund a business due to the length of time it takes to secure the financing, and the fees and closing costs associated with SBA lending.

6. One of the topics I stress on my blog is passive income. Is there such an avenue in the franchising world (or at least close to it)?

Leslie:

Franchise business ownership is not like real estate investing where you can hire a good property manager and not have to do much and collect your rent money.   Overall returns can be higher but there is more work involved.   After growing a business over 4-5 years, it is possible for franchise owners to employ staff and systems to handle some or much of the day to day operations so that s/he does not have to be there all the time doing everything; Kiyosaki’s “B Quadrant” business in other words.  There are even some franchise businesses that can be started as a semi-absentee investment allowing people to keep their primary job or business.   In either case, a minimum of 10-15 hours a week of involvement is realistic to expect.

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Are there any other questions you have for Leslie? Have you thought about opening a franchise? If so, what sort of franchise and what is your motivation?

If you would like to contact Leslie Kuban with any questions you might have, here is her contact information:

Leslie Kuban

FranNet of Atlanta

770-579-3726

lkuban@frannet.com

http://www.frannet.com/lkuban

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The 3 Myths of Happiness
17 Ways to Save the Planet
The Biggest Bailout Ever
Is Happiness Viral?
What Determines Happiness?

Photo by El Gran Dee

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