Demographics Studies for Opening a Small Business

Small businesses are hugely important to our current economy.  Small business contributes to our GDP, increases the number of available jobs, and enrich our local communities.  It’s hard to find someone who is not a big supporter of small business, and increasingly we are finding more and more people who are interested in being entrepreneurs.  Business ownership is very appealing, it makes you the decision maker.  You are the last to get laid off and the first to know when problems are on the horizon.  You can approve your own vacation time, raises, perks and schedule.  You also get the advantage of choosing your coworkers, if you even want coworkers.

Once you get excited about the idea of owning your own business, there is the understandable question of can my business survive in my area?  Do I have the audience and the clientele to support the business I want to open?  Franchise Brokers can help with that.  Franchise businesses are great at helping their franchisees choose the best businesses and locations for them and their region.  You know the old adage “more is less?“  Well, when it comes to information more is, well, more…and better.  In addition to the assistance and support of the franchisor to choose the best location for your business, members of the FBA can also provide you with access to demographics reports and studies that can help you determine the viability of your business in your location.  What’s the makeup of your community, age groups, gender, income levels, population density, etc.?  Would a sports bar and grill thrive in your area?  How about a clothing boutique, sandwich shop, marketing firm, or B2B business?  Demographic reports can give you great insight into the future success of your company.  It’s important to have the help of a professional when reviewing this information, as well.  Having the information is the first step, deciphering it and understanding how it impacts your business in the next.  Brokers and consultants are the professionals that can help you glean the information you need from these materials.

Interested in looking at the demographics for your region?  Contact one of our members by going here and filling out a request for information form.

It’s pretty remarkable how many different types of franchised businesses there are available.  When most people think of a franchise, images of McDonald’s, Burger King and Subway come to mind.  But less often do people think of the other business concepts the franchising industry has to offer, like:

• Clothing boutiques
• Day Spas
• Hair Salons
• Business Services and Coaching
• Childcare and Development
• Tutoring and Education
• Financial and Loan Services

There are thousands of franchise and business opportunities to invest in.  And, while many people initially say “I want to own a restaurant” or “I want to own a gym” there are important factors than can help you choose the very best business option for you.  Are you looking for:

• Flexible schedule
• Home office based operations
• Low investment level
• High return on investment
• Quick start up
• Small office or small number of employees

This is where a franchise broker can provide you with valuable guidance and assistance.  Their purpose is to not only match you with the best industry for you, but also the best business model.  Your work-life balance and your business goals are taken into consideration when researching your franchise options.  Do you want to:

• Make a difference
• Operate a green company
• Work with other businesses and professionals
• Provide job opportunities

It is important to take all of these items into consideration when investigating franchise and business opportunities you are interested in.  While these things can be daunting, having an experienced partner in your research process can prove immensely helpful (and stress reducing).

If you’re interested in talking to someone about your options or want to learn more about the benefits of using a franchise broker, click here and fill out an Information Request Form.

One of the greatest advantages of investing in a franchise over building a business from scratch is the ability to leverage your investment.

While some banks will still loan funds to a qualified individual to start a business, they are few and far between.  With the state of the industry, you now have to provide not only more but a higher quality of information to the lenders to improve your chance of getting a loan.  When investing in a franchise, the loan process is easier.  Franchise companies have a track record of other business owners who have run this type of business successfully.  They provide the FDD which contains exact start-up costs, materials, suppliers and more.

Franchisors many times have relationships with lenders that help their franchise prospects apply for and obtain funding.  A franchise broker can also give you access to lending information, companies that they recommend and would (or maybe have) used, giving you direct access to companies and contacts that know the benefits of franchising and helping your chances of getting the loan to start your business.

This all makes sense, if you were loaning your money, wouldn’t you want to see the highest chance of success possible for your borrower?  Franchising has proven time and time again to provide this.  Therefore, banks prefer a business with data, statistics, and proof to back up the borrower’s forecast.

Learn about leading franchise funding sources and franchisors with funding connections, contact us here.

Franchising Means Support

What do the most successful people in business have in common?  Each one became successful by surrounding themselves with people that are more successful than they are.  It makes absolute sense, you must surround yourself with successful people, those who can support you, assist in the growth of your business and share their knowledge. 

With a franchise you are awarded the opportunity to work with hundreds of successful franchisees and the team that supports them.  We always explain to our clients that if they want to be successful, they must use the support of the Franchisor.  They are busy working on the business.  They are developing it and creating the tools, resources, systems and staff that is necessary to make the business run smoothly and effectively.

When choosing a franchisor, always pick the one that gives you the most support and then use it.  There are countless stories that come across our desks daily of all the successful franchisees that we have placed in solid, thriving franchises.  That could be you!  If you are or become a franchisee, use the support of your franchisor, the tried and true systems, tools and resources available to you.  They are there to make you successful!

Contact us to learn about successful and supportive franchise companies and to discuss which franchises match your entrepreneurial goals.

So, you want to start your own business?  You have heard about the benefits of working with a franchise and you’re interested in researching the opportunities out there for you.  Investing in a franchise over starting an independent business offers a wealth of benefits, including valuable support, tested and proven systems, discounts on products and services and more.

What is likely to be your first questions is “How much money can I make?”  Even though you have heard great things about franchising, you need to research each concept’s specific earning potential.

A percentage of franchisors provide a financial representation (also known as an Item 19) in their Franchise Disclosure Document (FDD), industry sources report between 20 – 35%.

Through their memberships, FBA members can offer their clients one complimentary hour of accounting consultation.  This can help you to uncover the financial stability of the franchise system you are investigating.  FBA members also provide a proforma which can help you identify your break-even point.  This provides you with an outline of your targeted sales before you even open your doors. 

Preparing yourself for a franchise purchase is the best way of ensuring your success, and researching your income potential and ROI is large part of being prepared.

If you are interested in speaking with our Accounting consultant, contact an FBA member here.

Bast via Flickr

When you research buying a franchise, one of the most important parts of your due diligence process is asking the Franchisees questions.  Franchisors provide you with names of past and present Franchisees of their system as well as their contact information.

Questioning the Franchisee is about so much more than asking if they are happy with the franchise and the business.  It’s talking to the people who are working in the business, the business that you are looking to invest in, and digging into the benefits and issues that they – and you will – face every day.  It’s analyzing the system beyond the obvious and finding out if the business will fit your lifestyle and goals.

In addition to questioning the Franchisees, you can access surveys from independent third parties that will provide insight into the franchise system.  They ask all Franchisees in a system the hard questions about support, financial opportunity and the relationship with the franchise.  These findings will provide great insight into the franchise system and whether or not it is a good system for you to become a part of.

Due diligence is the most important part of your purchase process.  You want to make sure you are making the right investment for you, your family and your future.  Talking with the Franchisees and learning about their experiences are a pivotal part of the process.

Contact us to get a list of questions to ask Franchisees and to obtain information on Franchisee surveys.

Build Wealth With Businesses

How many millionaires can you think of?  Of those, how many of them have owned and built their own business to become a millionaire?  The book The Millionaire Mind by Thomas J. Stanley reports that 2/3 of all millionaires are business owners.  Why is that?  The simple answer is that businesses have two equity streams.  You earn a living with a business just like you do with a job, but you also build equity.

If you have ever looked into purchasing an existing business that is for sale, you will find that it is much more expensive than starting a business from scratch.  In fact, one of the franchises that we work with costs around $50,000 to get up and running.  By the fifth year in business the average Franchisee is grossing over $600,000 and many of them have hit the million dollar mark.  When a Franchisee goes to sell that business, they can charge between half to two times the gross sales.  That works out to be $300,000 in the worst case scenario and $1.2 million in the best case, assuming you only make $600,000 per year.  That is up to 24 times your original investment, and remember while you were working on your business and building equity, you were also taking a salary.  Show me a stock that can give you that kind of return!

There is risk in business just as there is in any other investment.  When you consider franchising with the RIGHT franchise system, your risk is dramatically reduced.  You will start with the end in mind, and think about what kind of return on your investment you want.

Franchising isn’t a magic pill, but with the right research, hard work and dedication to your system, a positive ROI on your business is absolutely within your reach!

Basic Franchise Vocabulary

There are a lot of terms, acronyms and abbreviations in franchising, most of which you won’t know unless you have experience in the industry.

Knowing these terms can be very helpful when doing your research on which franchise is the best match for you.  Here’s a quick outline of some basic franchising terminology and definitions.

Area Development Franchise – under an Area Development franchise, a Franchisee has the right to open more than one unit during a specific time, within a specified area. The Franchisor grants the Franchisee exclusive rights for the development of that territory.

Business Format Franchise – this type of franchise includes not only a product, service and trademark, but also the complete method to conduct the business itself, such as the marketing plan and operations manuals.

Business Opportunity - (also known as a ‘Biz Opp’) involves the sale or lease of any product, service, equipment, etc. that will enable the purchaser-licensee to begin a business. The Licensor, or seller of a business opportunity, usually declares that it will secure or assist the buyer in finding a suitable location or provide the product to the purchaser-licensee. This is different from the sale of an independent business, in which there is no continued relationship required by the seller.

CRM - (Customer Relationship Management) is an industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that describes relationships in sufficient detail so that management, salespeople, people providing the service, and perhaps the customers can directly access the information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer has purchased, and so forth.

Franchise – a license that describes the relationship between the Franchisor and Franchisee, including use of trademarks, fees, support and control.

Franchise Agreement – the legal, written contract between the Franchisor and Franchisee which tells each party what is required of them.

Franchisee – (also known as a ‘Zee’) the person or company that gets the rights from the Franchisor to do business under the Franchisor’s trademark or trade name.

Franchising – a method of business expansion characterized by a trademark license, payment of fees, and significant assistance and/or control.

Franchisor – (also known as a ‘Zor’) the person or company that grants the Franchisee the right to do business under their trademark or trade name.

Master Franchise – a Master Franchise agreement gives the Franchisee more rights than an Area Development agreement. The Master Franchisee has the right to sell franchises to other people within the territory, known as sub-franchises. Therefore, the Master Franchisee takes over many of the tasks, duties and benefits of the Franchisor, such as providing support and training, as well as receiving fees and royalties.

Multi-Unit Franchise - a multi-unit franchise is an agreement where the Franchisor grants a Franchisee the rights to open and operate more than one unit.

Net Worth – the difference between the assets and liabilities of an individual or an entity. If an investor owns stocks, bonds, a house, and other assets worth $2 million and has liabilities of $500,000 (including mortgage amounts and accrued taxes on appreciated assets stated at fair market value), then the investor has a net worth of $1.5 million. Similarly, if a company owns land, buildings, computers, and other tangible and intangible assets with a cost basis for financial statement purposes of $10 million and has liabilities of $9 million, then the company has a net worth of $1 million.

Product Distribution Franchise – a franchise where the Franchisee simply sells the Franchisor’s products without using the Franchisor’s method of conducting business.

Royalty – the regular payment made by the Franchisee to the Franchisor, usually based on a percentage of the Franchisee’s gross sales.

SBA – (Small Business Administration) an independent agency of the United States government that protects the interests of small businesses.  The SBA ensures that they receive a fair share of government contracts, offer loans and provide counseling to small businesses.

Single-Unit (Direct Unit) Franchise – this is the simplest and most common type of franchise. A single-unit (direct-unit) franchise is an agreement where the Franchisor grants a Franchisee the rights to open and operate ONE franchise unit.  It is possible, however, for a Franchisee to purchase additional single-unit franchises once the original franchise unit begins to prosper. This is then considered a multiple, single-unit relationship.

Trademark – the Franchisor’s identifying marks, brand name and logo that are licensed to the Franchisee.

UFDD – the Uniform Franchise Disclosure Document, UFDD, is one format for the disclosure document which provides information about the Franchisor and franchise system to the prospective Franchisee.

Are there other terms you came across that you had to look up?

BlueGrace Logistics Announces Three UFC Fighter Sponsorships for Upcoming Matches

Tampa’s BlueGrace Logistics today announced it will be sponsoring three Ultimate Fighting Championship (UFC) fighters in upcoming UFC matches to be held over the next two weeks.

“Integrity, determination, dependability, and a healthy respect for competition,
that is what these UFC fighters represent to BlueGrace.”

Tampa, FL (PRWEB) June 24, 2011

Tampa’s BlueGrace Logistics today announced it will be sponsoring three Ultimate Fighting Championship (UFC) fighters in upcoming UFC matches to be held over the next two weeks. The first sponsorship will feature BlueGrace Logistics’ sponsored fighter John “Doomsday” Howard in his June 26 matchup with Matt Brown at the Paconsol Energy Center in Pittsburgh, PA.

The two other sponsorship fighters will be competing at UFC 132 on July 2 at the MGM Grand Garden Arena in Las Vegas, and will feature contender Chris “The Crippler” Leben in his headliner event matchup with Wanderlei Silva and Carlos “Natural Born Killer” Condit competing against Dong Hyun Kim.

“Integrity, determination, dependability, and a healthy respect for competition, that is what these UFC fighters represent to BlueGrace,” said BlueGrace President and CEO Bobby Harris. “These fighters share many of the same values and strengths that our company was founded upon. We are honored and excited about these and future sponsorship opportunities to recognize and support these fighters.”

BlueGrace is one of the fastest-growing and most progressive providers of transportation, logistics and technology solutions to businesses and individuals nationwide, serving more than 2,500 customers. The company is next set to sponsor other UFC fighters in the near future.

About The Ultimate Fighting Championship
The Ultimate Fighting Championship is the world’s leading professional mixed martial arts organization and offers the premier series of MMA sports events. Owned and operated by Zuffa, LLC, and headquartered in Las Vegas, Nev., UFC produces over twelve live pay-per-view events annually that are distributed residentially through North American cable and satellite providers including iNDEMAND Networks, DIRECTV, DISH Network, TVN Entertainment, Bell ExpressVU, SaskTel Max™, Shaw Pay-Per-View, Viewers Choice, and WOWOW in Japan, and via the Internet worldwide on Yahoo! Sports, and commercially through Joe Hand Promotions in the U.S. and Canadastar in Canada. In addition to its North American distribution, UFC programming is distributed in over 100 countries and territories throughout the world. For more information, or current UFC fight news, visit http://www.ufc.com.

About BlueGrace Logistics
Founded in 2007, BlueGrace offers complete, customized transportation management solutions to customers throughout the United States. Based in Riverview, Fla., the company has grown to an $80 million business with satellite offices in Salt Lake City and Chicago. It also launched a franchise program in early 2011 as part of its strategic growth plan. The company offers best-in-class freight services and support, including:

• Less Than Truckload
• Truckload Services
• International and Domestic Air Freight
• Ocean Freight
• Parcel Shipment
• Logistics Management
• State-of-the-Art Technology
• Service Desk Support
• Auditing Services

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Want to learn more about BlueGrace Logistics?  Contact an FBA Member here.

Floor Restore offers floor restoration services with the twist of a mobile “showroom” bringing floor samples directly to the customer.  This minimizes overhead, allows franchisees to work from home and gives them the opportunity to offer a unique service.  Floor Restore is currently offering an exceptional promotional program.

Floor Restore
Presents
The
Pioneer Program

Start your business today for only $20,000

Program Available for the first 5 Franchisees.

Program Details:

•   Reduced Franchise Fee: Due in two payments. $10,000 due at sign up and $10,000 due 12 months later.
•   Training Fee WAIVED. Franchisee only pays for travel and lodging.
•   Lease program available on the Mobile Studio, Flooring Samples and Start Up Package due at sign up (up to $25,000 value).
•   Reduced Working Capital Required: NOW only $10,000

Floor Restore will be joining us on July 13th at 3:00 pm EDT to discuss their new program and answer your questions.  Register to attend by clicking here or copying and pasting the following URL into your browser:  https://www1.gotomeeting.com/register/825025464

Use ‘Contact@fba.com’ as “Referring Broker Email Address.”

Email us with any questions at contact-at-franchiseba-dot-com.