How To Become A Successful Business Owner

Many people think about starting a business, but not many end up becoming successful entrepreneurs and owners.

To start your own business and become a successful entrepreneur, you need particular disciplines; disciplines that are practiced by all successful entrepreneurs and self-made business millionaires.

You can either learn and practice these disciplines early in your entrepreneurial career or later as you go. However, sooner or later, you must become knowledgeable and skilled in each of these five areas if you are going to build an enterprise and become a successful entrepreneur.

Market Analysis

The first discipline is discipline of market analysis. This is where new business owners fail to become successful entrepreneurs. They start with a great idea and often don’t want to tell anybody about it; for fear that someone will steal it. So they go off half-cocked into the marketplace with a product or service that has not been thought through properly and they are amazed when it fails.

If you have an idea for a product or service in a particular industry, you should go to someone who is already in that industry and ask for their opinion. A successful entrepreneur will get in touch with as many people in that industry as possible, lay out an idea to them in full, and ask for their candid comments.

What you are looking for is “negative thinking.” A negative thinker is someone who will point out the holes and flaws in your plan. If you cannot patch the holes or fix the flaws in your plan when you are starting a business, that is probably a pretty good indicator that your business is not going to succeed.

Create A Business Plan

The second discipline that you must become very good at is the discipline of planning. What this means, is that as a person who is starting a business, you must take the time to prepare a complete business plan before you start operations.

A business plan’s purpose is not to act as a road map or a precise guide to the future. The purpose of creating a business plan is that the preparation of the plan forces you to think through every single critical issue that you will deal with in the future.

A successful entrepreneur and business owner will give a lot of thought to the various things that could happen and to the various things they might have to do, should those things happen. Conversely, the un-successful business owner is someone who has given no thought at all.

The Discipline Of Money

The third discipline you need to start a business is of money. A new business owner will need six full months of operating costs in the bank, before they go into business. If you need money to start your own business, you should know that 99% of all start-up money is called “love money.” This is money that people give you because they love you or money that you provide yourself by taking out a second mortgage on your home, selling everything that you have that you don’t need, and even borrowing cash against your credit cards.

Don’t count on banks to lend you money. Banks simply do not lend money to a business owner to start a business. The failure rate is too high. Banks are not in the business of taking risks. Banks are making good, solid loans that they know will be paid back promptly. Banks then make the margin between what they can borrow the money for and what they can lend it to you at.

The Secrets Of Power Negotiating

The fourth discipline is the discipline of negotiating. As a business owner, you must learn how to negotiate by first of all studying the process of negotiating and then second, practicing negotiating at every opportunity. A successful entrepreneur and business owner must negotiate for better prices for the products and services when they are buying. They negotiate for higher prices and earlier payments for their products and services when they are selling.

With regard to money and negotiating, the rule is that you preserve cash at all costs. As a business owner, you never buy when you can lease and never lease when you can rent. You never rent when you can borrow and you never get anything new if you can get it second hand. Negotiating for and protecting your sources of cash flow is the most important thing that you can do for a small business. If you run out of cash, you’re dead. Cash is to a small business as blood and oxygen is to the brain. You must fight, scramble, negotiate and do everything possible to assure that you always have cash reserves.

A Successful Entrepreneur Is Resilient

The final discipline is the discipline of resilience. It is the ability to bounce back from the inevitable setbacks and disappointments that you will experience virtually every single day in starting and building your own business. One of the marks of the successful entrepreneur is that he or she is always looking into the future and considering the worst possible thing that could happen in every area of the business.

Sometimes, a small setback can seem almost overwhelming if you’ve allowed yourself to get tired and run down. You become resilient to the degree to which you get lots of rest when you are starting a business.

You have within you, right now, the ability to start and build a successful business and become a business owner. Millions of people have done it in the past, and millions more people will do it in the future. These people are not smarter or better than you are. They have simply learned what they needed to learn and then practiced it, over and over until it became second nature. And so can you.

****************

Do you listen to podcasts? I just launched my podcast, The A to Z of Investing in a Franchise. Building a solid business doesn’t have to be complicated, filled with regret or trial and error. Subscribe and learn everything you need to know before jumping into the franchising business!    

How To Be A Successful Franchisee

Franchising is excellent if you want to build a successful business and be your boss without having to build it all from scratch. But, it’s not something that one can readily dive into without proper research and knowledge. So what separates successful franchisees from struggling ones? This article discusses how to be a successful franchisee.

“Although you’re in a business for yourself, you’re not by yourself in a franchise.”

Qualities of a Good Franchisee

A franchise business framework is already set up for success. However, if not managed effectively, it’s bound to fail. Here are qualities that successful franchisees exhibit that contribute to the business’s success.

  1. They have a strong work ethic and motivation – Successful franchisees will put in the work and the hours to ensure the business’s success.
  2. They are patient – They understand that success doesn’t come from the overnight hustle. Instead, they keep on focusing on progress until they achieve tangible results.
  3. They are passionate about the brand – Successful franchisees know they embody the business’s brand in their respective local areas.
  4. Reliable and responsible good business skills – They are knowledgeable about business, whether it’s operations, systems, or other aspects. They also prioritize financial well-being by conducting financial planning.
  5. Good management and people skills – They understand that customer service is vital for franchising success. They don’t shy away from learning if they aren’t well-versed in management. They prioritize human resources as a managerial function, for they know how staff affects customer services.
  6. Creative and innovative thinkers – Successful franchisees always find a solution for whatever roadblocks they encounter, whether through conventional problem-solving techniques or uncommon methods.
  7. Team players – Always willing to lend a hand to those in need. Whether those are staff members, customers, business vendors, or other franchisees, they always help when needed.
  8. Willing to follow the rules – You must follow the rules and regulations of the franchise agreement. If you don’t understand it, get help from a fellow franchisee or other franchisors. Entrepreneurs who want to change the system are better off establishing a business for themselves. It is important to remember that the franchisor, for the benefit of his brand and reputation, will not accept “business maverick” behavior. A franchisor will act as the guardian of the brand and a policeman to protect other franchisees.

Conclusion

To be a successful franchisee, you need to possess most, if not all, of the qualities mentioned above. If you think you don’t possess these qualities, then investing in a franchise might not be best for you. However, I can almost guarantee you will be a successful franchisee if you have most if not all of these qualities. So, if you want more information on becoming a successful franchisee, feel free to send me a message or book a call to learn more.

****************

Do you listen to podcasts? I just launched my podcast, The A to Z of Investing in a Franchise. Building a solid business doesn’t have to be complicated, filled with regret or trial and error. Subscribe and learn everything you need to know before jumping into the franchising business!    

4 Qualities of a Good Franchisor

Starting a small business and buying a franchise is a big decision to make. Finding the best franchisor can get confusing, as there are a lot of available options. The right one will assist you in growing the business and achieving your goals. This article discusses the four qualities of a good franchisor.

Legally registered with the Federal Trade Commission and the USA

This authorization allows the franchisor to offer a franchise business to others. The Federal Trade Commission (FTC) requires each franchisor to file an annual franchise disclosure document (FDD). Neither the franchise business or its owners or directors should have any legal or bankruptcy filings.

The FDD will provide the performance history of the franchise, and its owners, together with a list of all current and past franchisees. If you find that people have left the franchise, you need to know why they’ve left.

Proven track record of success    

You don’t want to invest in someone who is only second or third in their field, compared to the others. A franchisor should have a solid reputation in the industry they’re performing in. In addition, their concept needs to be having a trading advantage over the competition.

Additionally, the franchise should be scalable. This implies that the same techniques can be used in many different locations. Since you never know when you might be trying to expand your business and looking for new territories.

Comprehensive training and support program    

You’ll have plenty of questions, especially when you start. The franchisor should have staff who can respond quickly to any questions you may have. They should be able to train you at the headquarters, at your location, on Zoom, or by phone, whichever is applicable and relevant at the time.

Successful marketing plan mapped out    

A marketing program is essential because without marking your business locally and nationally, you won’t have any clients coming. So the franchisor must have a successful marketing plan mapped out from the time you open your business as it grows and over the months and years.

“Unrealistic promises normally are not ones that can be kept.” – Rakesh Sharma

When it comes to the business they’re offering, the investment should be reasonable, in line with the industry, and realistic. Promises that are unrealistically high are typically impossible to fulfill. Needless to say, your return on investment (ROI) ought to be sustainable.

Conclusion

There are good and not-so-good franchisors. A good franchisor is committed to the success of their franchisees and has a strong sense of pride in their company. You need to find the right fit for you in choosing a franchisor. A good franchisee-franchisor relationship is crucial in running a franchise business. If you need help and want more information regarding franchising, send me a message at rak@franchiseconsultingcompany.com

****************

Do you listen to podcasts? I just launched my podcast, The A to Z of Investing in a Franchise. Building a solid business doesn’t have to be complicated, filled with regret or trial and error. Subscribe and learn everything you need to know before jumping into the franchising business!    

Questions to Ask Yourself Before Investing in a Proven Franchise Model

Are you ready to be your own boss? It’s everyone’s dream but not all understands what it takes to be one. Entering into a franchising business is life changing, and it is imperative to know everything about it, before venturing into one. Here are the most important questions to ask yourself before franchising a business.

“When you know why you’re doing it, you start to understand the business that is best for you.” – Rakesh Sharma

Are you willing to take the risk into franchising?

Just like anything in life there are risks involved in franchising. You could fail and lose your hard earned money for various reasons such as: change in customer’s habit, economy, or picked the wrong franchise. The key to success is do your homework to minimize risks as much as possible.

Why are you considering franchising?

There are a lot of reasons why anyone would consider franchising. But what is important is to have a positive answer to this question. Do not do it because it’s cool or because everyone is doing it. Be sure to have a good reason why you want to enter into a franchise because that will serve as your motivation when things get tough.

Can you afford the franchise?

The number one reason why people fail in a franchise business is lack of adequate funding. Just because you paid the franchise fee doesn’t mean you’re already set up for success. It is imperative that you understand how much money you’re going to need to setup the business.

Do you have the right personality for a franchise?

Personality plays an important role in every business. As the owner, you will set the tone for the entire business and will drives the environment and the atmosphere where employees will work. Do you enjoy working with other people? Are you willing to learn? Employees like working for a good leader, and if you’re not willing to be one, then opening up a franchise might not be right for you.

When is the good time to invest in a business?

Timing is everything. Be sure that this is a great time in your life to start a business. Have you paid off your mortgage? Do you have a newborn? Or the kids have grown up now and you have nothing left to do at home? Entering into a business ownership is a very personal decision that only you can answer.

Are you ready to run a business?

Franchising does not guarantee success. It is a real business that requires commitment and hard work from the beginning. Don’t go into business assuming that you will be able to put your feet up after a few months. It will affect your work life balance, especially in the first two to three years.

Answering all these questions before venturing into franchising will make all the difference in the world. Be sure to answer honestly as it can determine your future success.

****************

Do you listen to podcasts? I just launched my podcast, The A to Z of Investing in a Franchise. Building a solid business doesn’t have to be complicated, filled with regret or trial and error. Subscribe and learn everything you need to know before jumping into the franchising business!    

The Roles and Responsibilities Required in a Successful Franchise Business

Franchising is not a one-way street. Remember that the franchisor did not sell the franchisee any business. The franchisor is only selling the rights to operate the business under their proven formula. It means franchising is a mutually beneficial agreement where the success of both parties is reliant on one another. Each have a role to play for the success of the franchise. This article discusses the responsibilities of franchising.

Franchisor’s Scope of Responsibilities      

  1. National marketing and advertising of their brand.
  2. Research and develop new products and services for the brand.
  3. Manage new products and services for the brand.
  4. Make every franchisee aware of the additional product or service
  5. Manage franchise territories to ensure that all franchisees have a large enough territory for enough business without infringing on another franchisee’s territory.
  6. Provide ongoing training to make sure that every employee is up to date and operating at the highest level.
  7. Evaluate the performance of the local franchisees on a regular basis to see if you’re doing well.
  8. Give advice on running a good franchise, or will always be available for advice.

Franchisee’s Scope of Responsibilities      

  1. Pay the franchise fee.
  2. Pay the royalty fee.
  3. Making sure the entry level employees are trained properly on site in your location.
  4. Running the business according to the standard expected of the franchisor.

Remember that it’s a joint road to success as both the franchisee and the franchisor are working together to build a stronger brand and to grow the business collectively for the franchisor and the franchisee.

****************

Do you listen to podcasts? I just launched my podcast, The A to Z of Investing in a Franchise. Building a solid business doesn’t have to be complicated, filled with regret or trial and error. Subscribe and learn everything you need to know before jumping into the franchising business!    

Franchising Terminologies

Franchising can be highly complicated, especially for beginners. But having the proper knowledge and understanding of the basic franchising terminologies will help anyone to get started. This article will discuss the most common terms encountered in the franchising world.

Franchising

It is a method where franchisors distribute products or services to franchisees under proven successful business systems.

Franchisor

The entity that owns the franchise. Franchisors spent a lot of time and money building the brand trademark, trade name, and business system to make it successful.

Franchisee

Someone who pays a franchise fee for rights to use and operate the franchisor’s business.

Franchise fee

It is the one-time fee paid by the franchisee to the franchisor upon agreeing to the franchise agreement.

Franchise agreement

It is a contract between the franchisee and the franchisor that outlines all responsibilities for both parties to each other during the agreement period.

Royalty fee

In addition to the one-time franchise fee, franchisees need to pay a recurring monthly royalty fee to cover services like training, accounting, technology, and everything else that the franchisor provides on an ongoing basis. Usually, this fee runs from 6 to 10%, depending on the franchisor.

Advertising fund fee

Since the franchisor advertises the brand, which benefits the franchisee, they will require the franchisee to pay an additional 2% recurring fee.

Franchise disclosure document

This is a legal document required by the federal trade commission to be presented to each franchisee. It protects the franchisee and will hold the franchisor accountable for anything they don’t do properly.

Due diligence

Is the act of investigating all aspects of the franchisor; the market that you are entering, the competition in that market, and your own capability of running the business.

Without proper knowledge of these terminologies, you might find yourself lost when negotiating with a franchisor. Understanding what you are getting into before investing your hard-earned money is imperative.

****************

Do you listen to podcasts? I just launched my podcast, The A to Z of Investing in a Franchise. Building a solid business doesn’t have to be complicated, filled with regret or trial and error. Subscribe and learn everything you need to know before jumping into the franchising business!    

The Basics and History of Franchising

Franchising is one of the most lucrative industries in the world. The industry is worth 800 billion annually in the US, with over 800,000 franchise units. The sector employs 8 million people with just under 4,000 different franchisors. If you want to learn more about this exciting industry, you have come to the right place. This article talks about the basics and the history of franchising.

“There’s no guaranteed success in life and in business, but franchising can minimize the risk element as much as possible.” – Rakesh Sharma 

What is franchising?

Franchising is a form of marketing and distribution in which the franchisor, the brand owner, grants the franchisee the rights to run their own local business, using the franchisor’s product, service, system, and proven umbrella of success.

History of franchising

Franchising originated in the 1850s when Isaac Singer, inventor of Singer’s sewing machine, couldn’t expand his business because no one knew how to use it, and he did not have enough money to mass-produce no sewing machines.

He came up with the idea of franchising, where he sold the rights to manufacture his machines and taught each franchisee how to use them. His business took off, and Singer is now one of the world’s most renowned brands.

Mcdonald’s is also a perfect example of a successful franchise that copied Singer’s business model. They currently have 14,000 restaurants all over the world.

Success in Franchising

Contrary to popular belief, franchising does not guarantee success. Franchising can only minimize the risk elements of starting a new business, and it still needs a lot of hard work and commitment from the owner.

Like any business, thorough research of the industry and competition is still necessary before investing money in a franchise.

****************

Do you listen to podcasts? I just launched my podcast, The A to Z of Investing in a Franchise. Building a solid business doesn’t have to be complicated, filled with regret or trial and error. Subscribe and learn everything you need to know before jumping into the franchising business!    

What makes a successful franchisee?

  • Having conversed with many Franchisors over my time in this business, the most important trait they look for is TRUST!
  1. franchisee’s Trust in themselves
  2. Trust in the proven process of the franchise
  3. Trust that franchisee can navigate the ebb and flow of business ownership
  • Successful Leader/Communicator
  • Risk-Taker
  • Willingness to Learn
  • Adaptability to new ways of doing things
  • Thick-Skinned
  • Team Player
  • Financial Aptitude
  • Patience

Things you should expect from your Franchisor

  • Firstly, the Franchisor should be an established company with several years of successfully operating this franchise system under their own steam. They may have started off as a small business entrepreneur and then grown the business to at least 3-5 outlets (normally corporate units) prior to considering franchising the concept to other investors. In my opinion, they should then have, or in the process of, selling a few independent franchises.
  • During this time, they should have established a solid business system that they could then franchise to other prospective owners that would find it attractive to invest in.
  • Their franchise must then be registered with the Federal Trade Commission (FTD) who regulate all franchises in the USA.
    Once approved by the FTD, that Franchisor is then allowed to offer their concept to other private investors. 
  • The Franchisor must then file a Federal Disclosure Document (FDD) in accordance with the requirements of the FTC.
  • Under Item 19 of the FDD the Franchisor, if it makes performance representations (FPR) to prospective franchisees in the sale of a franchise, it must disclose such FPR’s.
  • The Franchisor should have a solid system in place covering all aspects of starting a new location franchise such as Supply chain vendors, Site Location expertise, Technological advances, Staffing assistance, Training & Support etc.

After all, this is what you are paying for with your up-front Franchise Fees!