Food Franchise

Posts Tagged ‘Business Owner’

Imagine trying to learn the English language without knowing the letters of the alphabet. That’s what it’s like to own a business without knowing the fundamentals of “The E Myth”. While a business consultant will break down the profit pie and show you the numbers, “The E Myth” by Michael Gerber will break down the operation to show you the money. And there is truth to Mr. Gerber’s statement. Most “technicians” are good at what they do but that doesn’t make them good at operating the business. I have worked for such a “technician”. His emotional ties to his business clouded many of his decisions and made managing the business a living nightmare. After prying his fingers loose of the control stick, we applied the methods of “The E Myth” together and saw astounding results.

At first, the owner, my boss was appalled to hear his establishment being compared to a fast food chain. This fast food restaurant, however, sowed the seeds of successful franchising and has become what we know today as McDonald’s. If McDonald’s is able to make its hamburgers the same way in New York as it does in Los Angeles, you have a franchise. If it operates the same successful restaurant in Japan, then you basically have a Genie in a bottle. And what business owner hasn’t wished for that.

After pledging our commitment to the growth of the business, the owner and managers devised a clear business plan. The plan was pitched to the staff and customers were pitched the guarantees. Each department was then set up with a checklist to ensure consistent delivery of the company’s policies. Within three years, the business has grown financially and added a third location in a different state. Better still, the system operates smoothly without the owner overseeing it. No one thought it could ever be possible. Though we would like to personally take all the credit, I wouldn’t be honest if I didn’t say the results are from sound advice found in “The E Myth”.

It’s no wonder the book has sold over a million copies and is licensed in sixteen languages. When something makes sense, it works. Michael Gerber also has a website called “In the Dreaming Room” which has more information about himself and the far reaches of this classic book. In addition, Mr. Gerber keeps a blog which shows a more candid side to himself. It’s worth checking out.

Entrepreneurs are the backbone to the nation’s economy. As romantic as it seems to run your own business, the hard truth is that most businesses fail after the first grueling year. Should it survive that, its only reward is to live through the next four. “The E Myth” puts the owner’s best interests in plain English. If you want your business to succeed, read the book- -the only thing you have to lose is the ball and chain.

Owing a business and being the boss is a dream for many, but a risky challenge. The right franchise reduces the risk and makes that dream come true.

A franchise is a business agreement where an individual (franchisee) buys the right to use a company (franchiser) name and sell the company product. The franchiser retains the right to set standards that the franchisee must meet, or loose the franchise rights.

A franchise offers an established name, tested products or services, advertising and training to help the new business owner succeed. The franchiser has already made and corrected many of the pitfalls and mistakes that a new businessperson might make on their own.

Think about these issues before investing in any franchise.

1. How much freedom do you want?

Franchises with strict standards and little room for variation are better for people who want a proven track record with less risk.

A franchise with looser standards gives owners more freedom to implement their own ideas, products and services. They’re better for experienced business owners who want to tackle the risk, and reap the potential rewards, of offering their own contributions alongside those of the franchise. Successful experiments are often sold back to the franchiser.

2. How much guidance will you need?

The amount and quality of assistance varies. Franchisers with rigid standards tend to provide more assistance than those with looser standards, and are a better choice for people tackling their first business ownership project.

3. How much can you afford to spend?

Franchises are not free, nor are they guaranteed to succeed. A failed franchise can be as costly as any failed business venture. It pays to consult a financial professional before purchasing a franchise.

4. What about benefits?

Employees often take benefits like life and health insurance for granted. As a business owner, you must provide them for your employees and yourself. Sometimes, a new franchisee can rely on health insurance and other benefits from a working spouse.

5. How much time can you invest?

Two old friends meet for coffee. “How is your new business going?” asks the first friend. “Great” replies the second. “I got used to working half days. Now, a 12 hour workday seems normal!”

Yes, it’s a joke, but when problems occur or the business is short handed, the burden falls on the owner. If you plan to take vacations, you’ll need a reliable person in charge while you are away.

6. How will it affect your family?

The right franchise can be a family affair where everyone helps out. If your family can’t participate, will they be able to cope when you must put in extra work?

7. What business skills do you have?

A franchise owner must wear many hats. Accounting, marketing, and human resources skills are essential.

8. What will you need to learn? Where will you learn it?

People who lack these skills chose a franchise that provides training or take classes on their own before tackling a franchise.

9. What do you like to do? What are you good at?

Say “franchise” and people often think “fast food”, but today there’s a franchise available for practically every interest. Artists might choose a framing shop, an auto buff might choose a repair franchise.

10. Where will your franchise be?

Some franchises insist on a minimum distance between franchises. Zoning restrictions may apply. Some franchisers will help the new owner find a suitable location and even negotiate a lease. A difficult to reach location may spell disaster, an accessible location close to home is easier to manage.

Dollars & Sense

By Denice Gierach

As published in the Naperville Sun – September 16, 2007

In the excitement of forming a new business, whether a person is purchasing a franchise or forming a new business from scratch, one critical step in getting the business started usually gets little attention by the business owner – the commercial lease.

 With everything else new business owners have to decide, they tend to spend too little time understanding the commercial lease.

Before business owners sign any commercial lease, they must read it and know what it means. This seems like common sense, but many people start reading the lease – normally a substantial number of pages with a bit of “legalese” – and then stop, assuming the lease conforms to what they were told by the leasing agent.

 If you cannot understand the lease, spend the money to hire an experienced lawyer who can tell you what the terms of the lease mean.

Although there is an upfront cost to using a lawyer for this, it is essential that you are aware of your rights and duties under the lease and that the lease incorporate the verbal promises made by the leasing agent.

 If it is not in writing, you will not be able to enforce the promises made to you by the leasing agent.

There are a number of provisions that you should be aware of.

 • Know your total cost. In many commercial leases, the tenant pays a base rent amount per month, plus a portion of taxes, insurance and maintenance of the building and its common areas.

In a shopping center lease or in a lease to a restaurant, there may be additional payments required that are a percentage of the tenant’s gross sales.

• Know the building. You should know how old the building is and when major repairs to heating and cooling systems, the roof and common areas were last completed. Otherwise, you may be surprised by a bill for your share of work on these items.

• Know who’s responsible. The tenant named in the lease should be your business entity, which is the party responsible for making the lease payments.

 As a newly formed business with no track record, the landlord may ask you to personally guarantee the lease. This means that if the business fails, the landlord will expect you to pay the lease for the rest of its term, which could be a substantial amount of money. Your lawyer might be able to help negotiate better terms than a personal guarantee, especially if you have owned a business in the past.

 • Know your neighbors. If the property you want to lease is in a mall or a shopping center, you may be concerned about whether the landlord rents space to a competitor.

If your business requires peace and quiet, you may need to bolster the provision allowing for your “quiet enjoyment” of your leased space, to allow you to terminate the lease if the landlord rents to a noisy neighbor.

• Know your financing. If you are a franchisee, you should not sign a lease if you have not finished your financing, bought your franchise or finished the purchase of your new business. There is no fun in making lease payments for a business you don’t have.

 If the landlord insists you sign the lease, your lawyer will need to insist on language that includes a contingency for financing and a contingency for the completion of the business or franchise purchase. 

Merchant cash advances are the quickest fix for whatever funding needs your business might currently have whether to cover emergency expenses, purchase new inventory, support an expansion, or save a failing venture. The convenience, ease and speed of the features make it a lot more attractive compared to that of the traditional means of funding.

Merchant cash advance is a form of financial service wherein the provider agrees to buy, at a discounted rate, the future Visa and MasterCard revenues and pay upfront cash to the business owner. Payback will also be done through the credit card sales transactions where a pre-arranged percentage of this will be regularly deducted. This funding program is most ideal to retail, seasonal businesses, franchisees, and restaurant merchants not only because of the slim chance they have at getting approved for a business loan but also because of the immediate liquidity. But regardless of the industry or market you are in or the reasons for your borrowing funds, you can still apply and be granted of the cash needed.

This funding program may come in various names or terms but still come up with the same definition, requirements and benefits. When it comes down to really acquiring funds, how do you go about comparing merchant cash advances?

First off, search for likely candidates from where you will choose from the best financial service provider that is right for you. In comparing merchant cash advances from various companies, you should consider how much they are willing to pay for the purchase of businessâ€TMs receivables. Also, compare the percentage that the company will be deducting from the credit card sales.

Evaluate how the processing works for each company. Deciding to get a merchant cash advance means that you are indeed in a hurry to get the funds and would prefer fewer hassles. Comparing the timeframe and requirements by which you would be able to get hold of the money would be helpful.

Merchant cash advances are typically known to be unsecured which require no personal guarantee or security in the form of any personally owned or business-owned asset as collateral. Though not as popular, a secure form can also be availed of. Providing less of the risks to the lending company, secured merchant cash advances offers lower rates for the borrower. Existing and even would-be properties which will be bought using the advance can act as collateral including real estate, equipment, and other businesses. To compare and know which form is best for you, ask your merchant cash advance provider for policy information regarding both programs.