Franchise Ownership: When Can You Expect The Payoff?

Franchise Ownership: When Can You Expect The Payoff?
4 Lessons The Shifting Legal Sector Can Teach Small Business Owners
You Can Now Do More With Your Favorite Apps on Do.com
Create Forms to Add to Your Website the Easy Way with Wufoo
What Happened to the Recovery in Small Business Sales?
Research: More People Will Tweet a Post With a Cartoon Than a Photo

Posted: 18 Feb 2013 01:00 PM PST

franchise payoff In most cases, the payoff is not instant. Once in a while, it comes faster than expected but, on average, not fast enough. And, in a few rare occasions, it never happens. I'd like for you to avoid that.

Expectations

The professors at Stanford University are at fault. They've taught some of the world's best and brightest. Brin, Page, Thiel, and Hastings have all contributed to our current "instant gratification" mindset. We want everything now. And, our kids want (and expect) everything, "yesterday."

Some of today's future franchise owners want instant gratification, too. That's why they look for the hottest franchises. They really want quick success and fast payoffs. But, is achieving profit rapidly in a start-up franchise business really possible? Or, is it a totally unrealistic expectation

Transitioning

If you've decided that you want to take more control of your life, becoming a small business owner- can accomplish that goal for you. But, if you've been an employee for all of your life, making the transition to employer may be tougher than you think.

Think about it; you're used to collecting a paycheck. (At predetermined times every month) You do the work, you get paid. And, unless you're in sales (where you are paid a commission that usually fluctuates) you generally know what your paycheck is going to look like.

Now, fast forward to your new franchise business. Your business has been open for 6 months. You have 3 employees, and soon, you'll need to hire at least one more. Your revenue isn't bad…you're just about paying all of your bills, including payroll. In other words, you're almost at break-even.

But, you'll have to increase your revenue a lot more before you blow past your break-even point.

Go Long

If you're looking to replace your paycheck quickly, the most valuable piece of advice I can give you is this; find employment. I've told countless people who've wanted to work with me – but needed to replace their incomes right away, the exact same thing. (Some of them were not very happy with my suggestion.)

I'd much rather have potential clients disappointed with my "get a job" suggestion, than have them call me 3 – 4 months into their startup franchise purchase asking for tips on how to "get out" of their franchises.

Here's a statement from The New York State Attorney General:

"A franchise is a long-term investment. You will not get rich quick. It may take you several years to develop your business to a point where you have paid off loans and are making the amount of money you anticipated. If your business does not become profitable or you tire of it, you cannot simply close up shop and forget about it. Like it or not, you must continue to work for the full amount of time agreed to in your contract."

Please read that again.

The Reality

Not everyone I talk to can wait.

For example, if I'm working with a 50 year old woman who was the victim of a corporate downsizing, and whose oldest child is about to start college (with child #2 nipping at child #1's heels) her short-term income needs are real. Investing in and running a startup franchise may not be in the cards for her. That's just reality. (Unless she has college for both of her children fully paid for and extra money in the bank.)

But, some people can wait for the payoff; they already know that they're going to have to. And, they're 100% comfortable with that fact, as long as they know (or have faith) that eventually there will be a payoff.

So, if you know going in that you're probably not going to see a paycheck for a while, and you have enough of a financial cushion to allow you to breathe a bit as your new business ramps up, all the better.

How To Determine When The Payoff Will Happen

This is actually the easy part. All you need is a formal business plan. If you've never written one, there is plenty of help available to guide you through the process.

The Small Business Development Center

Your local SBDC usually has counselors on hand that can assist you with your business plan. Go here to find the closest one. Their services are free, because of a unique collaboration of the Small Business Administration, state and local governments, and private sector funding resources.

CPA's

Most Certified Public Accountants can help you write your business plan. Go to The American Institute of CPA's (AICPA) website to find CPA's in your state, or get a referral from a business attorney or small business owner in your area.

Business Plan Software

Tim Berry has written numerous articles for Small Business Trends over the years. In addition, he was principal author to what's now the best-selling business plan software in the world, Business Plan Pro. All you have to do is plug-in the numbers and the calculations are done for you. (Plus a whole lot more.)

A properly written business plan takes most of the guesswork out of things like when you're franchise business will break-even, and when you'll start to see a payoff.

One more thing: In addition to asking existing franchisees great research questions like these, ask them how long it took them to break-even and become profitable. I've found that franchisees are very amenable to answering questions related to their finances if approached properly.

If you do enough things right in the franchise exploration process, and go into your new business with no expectation of an instant payoff, you could come out a winner.

Raining Money Photo via Shutterstock

The post Franchise Ownership: When Can You Expect The Payoff? appeared first on Small Business Trends.

4 Lessons The Shifting Legal Sector Can Teach Small Business Owners

Posted: 18 Feb 2013 11:00 AM PST

There was a recent report highlighting the fact that the legal sector will never return to its pre-recession heyday. The report was jointly produced by the Center for the Study of the Legal Profession at Georgetown University Law Center and Thomson Reuters Peer Monitor.

Too many lawyers, chasing not enough work, and pressure from clients to provide discounts have become a fact of life in the current market.

In fact, because of the high unemployment, law school applications are on pace to hit a 30-year low. Since the recession, the fraction of new J.D.s finding a full-time job requiring a state bar license dropped from 74 percent down to less than 60 percent, according to data compiled by the National Association for Legal Placement.

Now to be fair, this is not to say that ALL firms are sinking. Quite the contrary.

Still, the legal sector is undergoing major changes. And these changes are HUGE lessons for the smart business owner. So what can small business owners learn? Namely:

Cybercriminals Are Real, Defend Against Them

President Obama recently issued an executive order designed to get the government and private companies working more closely to protect the nation against cyber attacks. Cyber attacks on U.S. businesses have increased dramatically as hackers look to steal financial and intellectual assets from computer systems.

The smartest cyber criminals have even figured out that the best way to get what they want is to avoid the target corporation entirely and aim straight for their law firm. According to Mary Galligan, special agent in charge of cybersecurity for the FBI:

“We have hundreds of law firms that we see increasingly being targeted by hackers.”

Why? Well, the truth is, most law firms aren’t very technologically saavy. Most small businesses look at their business and say, “I’m small. No one wants to attack little ole’ me.”

But sophisticated hackers attack in either one of two ways:

Attacking the business to siphon funds or data.
Using the smaller business to get to larger business. Or in other words, use YOU to get to your customers, vendors, suppliers, or potential customers.

Bottom line, invest in your cyber security. Use:

Encryption software.
Educate your employees about phishing scams.
Use better passwords.
Strengthen your firewall
Protect your smartphone.

People Want Accountability, Give It To Them

Because of the recession, many clients are fed up with the billable hour. Many experts agree the system itself is fundamentally flawed.

Why?

It rewards people for being unproductive. If you can finish a job in less time, you’re penalized. But, if you can drag it out…cha ching!
It’s unpredictable. Clients may not know if they’re being charged $1,000 or $10,000.

Some law firms are starting to see the value in simply offering flat fees. According to Kyle Westaway, a social enterprise attorney:

“There is a new model of the practice of law, and it’s about applying lean startup principles and challenging the old norms of the billable hour, command-and-control structure at a price that’s more approachable, lacking all the extra added bloat.”

It’s a smart move considering the amount of LPOs and other alternative legal service providers taking away clients. Your customers are smarter than they’ve ever been. Be real with them, be transparent and be accountable. They’ll reward you for it.

Your Competitor Is A Potential Partner, Befriend Them

Some law firms are outraged that LPO’s are taking away clients- even major U.S. law firms are scrambling. While most are outraged there are a few firms that are actually partnering with the LPO’s to win businesses. One Washington, D.C. firm is bringing in LPO representatives to pitch meetings to demonstrate how it can do the work at lower costs than other traditional firms.

Smart.

Truly smart business owners understand the power of strategic partnership. If the cost sharing and economies of scale work, if there’s up-selling or cross-selling potential, if both products or services complement each other and if there is a good non-disclosure and non-compete agreement in place – why not turn your foe into a partner?

If you can’t beat em. . .

There Are People Just As Capable As You, Develop Them

In a study by consulting firm Altman Weil Inc., it was found that most in the legal sector are slow to implement succession plans. Unfortunately, without that transition in place, firms could “face expertise gaps and ultimately could lose clients.” This is even more significant as the study points out, 30 percent to 40 percent of practicing lawyers in the U.S. and Canada are starting to retire.

Succession planning often takes a backseat to the daily operations and hassles of running the business.

How much of a backseat?

According to a global survey of 1,300 companies by Korn/Ferry, though 98 percent of companies believe a CEO succession plan to be important, only 35 percent currently have one in place. And 49 percent haven't had one in place for the last three years.

Yikes.

Don’t make the mistake of waiting too long. Find those “now” leaders (people who can take over immediately if need be) and make sure they’re not a carbon copy of you. Develop them to replace you. The time to do this is now.

Is there anything else we can learn from this changing industry?

The post 4 Lessons The Shifting Legal Sector Can Teach Small Business Owners appeared first on Small Business Trends.

You Can Now Do More With Your Favorite Apps on Do.com

Posted: 18 Feb 2013 09:00 AM PST

With the sheer number of apps and other platforms available to help business owners and professionals manage different aspects of their business, it can be very easy to get overwhelmed by constantly switching back and forth and updating data on different platforms.

Salesforce's Do.com aims to help solve this problem by integrating with several different types of productivity apps and services, so that they can all be controlled and tracked in one central location.

do more app

The app has just added several platforms to its list of integrations, which now includes Dropbox, Google Drive, Salesforce's customer support system Desk, time management app Harvest, contact management system Contactually, and online forms service Wufoo.

With Do More, Do hopes to become a central hub for workers to manage their projects on all these different platforms, helping them access and update data in real time.

These integrations can benefit small business users by simply saving time on updating multiple apps. For example, when a user shares a Dropbox file with another user, that person is automatically added to the file in Do as well. The photo above shows how users can view and share their Dropbox documents from their Do dashboard.

So if a company uses one app for accounting, one for customer relations, one for managing contacts, one for sending documents, and one for every other business function, finding a way to merge and centralize all these accounts can certainly cut down on a lot of time and energy. And Do said that the apps it chose to integrate with were specifically requested by users so that they would be most likely to be useful for them.

Other features of Do include organizing and tracking project progress, note taking, task lists, conversations, reminders and more.

Accounts are free for individuals, but collaboration accounts start at $15 for three people. Do also offers iPhone and Android apps for mobile users.

Do first launched in November 2011 and nearly 100,000 businesses to date have signed up to use its service.

The post You Can Now Do More With Your Favorite Apps on Do.com appeared first on Small Business Trends.

Create Forms to Add to Your Website the Easy Way with Wufoo

Posted: 18 Feb 2013 07:00 AM PST

Wufoo is an online form building website with a strange name. But I'm willing to bet that many people remember the name. This review is for small business owners who want to collect customer data and who find Google forms or other spreadsheet-connected options to be insufficient.

The service allows you to create an unlimited number of Web forms from basic template fields. You decide which fields you need to serve your purpose. Examples are mailing lists, job applications, invitations (with maps), online orders, address books, quizzes or tests, surveys, and contact forms.

Wufoo tries to make its services available to everyone and supports Internet Explorer, Firefox, and Safari. You need JavaScript and Flash to build your forms, but people using the forms will not (thankfully). As you can see in this screenshot, it is pretty simple to pick and choose for your basic form.

create forms

You can use Wufoo for free, and they encourage it. The forever free plan is useful:

1 User
3 Forms
3 Reports
10 Fields
100 Entries / Month

However, if you want the full capabilities of the website, including encryption and secure data storage, you will need to purchase one of the paid subscriptions that run from $14.95 to $199.95 per month.

What I Really Like:

You do not have to be a super programmer to build forms. All it takes is the ability to point and click.
You can imbed your forms into your website with paid plans. You also can use Wufoo to generate the xhtml and css for the forms.
You can use the data collected from your forms to create visually stimulating reports and share them. You control who can view your reports. The screenshot below shows some of the awesome power, and I seriously mean this is one of the best report builders I’ve tried. Drag and drop, of course.

You can attach files to your forms. This is pretty cool, I think.
Wufoo offers data storage with paid plans. You can view and download all your information securely on Wufoo.
There are no long-term contracts to sign. If you only want to use the service for a month, you can. All your data is deleted once you delete your account.

What I Would Like to See:

A variety of form designs. Although you can create a seemingly infinite number of forms, they all have basically the same look.
If you go over your number of submissions per month on a free plan, your form is deactivated. There could be a better way of regulating this, such as a pre-paid overage account with email warnings. I haven’t gone over in my limited tests, but it would be comforting to know that you would get a notification so you wouldn’t lose prospects or data.

I did a search for Wu and Woo with the word Forms in it and both times, of course, Wufoo came up. I was betting that many small business owners might remember the first syllable and put it in as a search. Good branding effort on their part.

If you want to incorporate forms into your website but do not want to spend days building databases and designing them, an online form builder like Wufoo can be a great small business asset.

The post Create Forms to Add to Your Website the Easy Way with Wufoo appeared first on Small Business Trends.

What Happened to the Recovery in Small Business Sales?

Posted: 18 Feb 2013 05:00 AM PST

Sales at the average small business, which had been trending upward from their nadir at the end of the Great Recession, turned south in February 2012 and declined during the better part of 2012, data from Intuit reveals.

Drawing on information from the users of its Quickbooks online financial management service, Intuit has measured small business sales since 2004. In the figure below, I have plotted the inflation and seasonality adjusted revenue of the average small business from the start of the Great Recession until the end of December 2012. The figure clearly shows that the recovery in small business sales has reversed over the last year.

Why?

My initial thought was increased competition. The decline in revenue coincides with the rise in the number of self-employment. Maybe rising average sales in 2010 and 2011 drew more people into business for themselves. This increased entry increased competition in the small business sector, which, in turn, drove down average sales.

But Susan Woodward, an economist with Sand Hill Econometrics, who helps Intuit interpret the data, told me that increased competition isn't a likely explanation. Average income, she pointed out, stayed high even though average revenue was falling.

So I asked her what she thought was the explanation. She offered a provocative hypothesis. She said:

"I can’t rule out ACA [Affordable Care Act] as a force.”

In response to the law, she continued, business owners:

“. . .have substituted other resources for employees, maybe even have lower revenues, but manage to keep the same income."

What do you think explains falling sales at the average small businesses in 2012?

The post What Happened to the Recovery in Small Business Sales? appeared first on Small Business Trends.

Research: More People Will Tweet a Post With a Cartoon Than a Photo

Posted: 18 Feb 2013 03:00 AM PST

You’ve worked hours to create a compelling article for your website or blog. The next question is: will it be shared on social media such as Twitter? After all, you want your content to be seen and appreciated.

Adding a photo will make your article more interesting. But recent research shows that a cartoon may work even better when it comes to getting others to tweet your content on Twitter.

Cartoon vs Stock Photo Tests

In three recent tests, cartoonist Mark Anderson of Andertoons (note, a contributor at this publication) demonstrates that including a cartoon on your post or website will make it more likely for people to share your content on Twitter than if you add a stock photo to the exact same content.

Test 1: In the first test, he showed online participants two dummy blog articles, one article displayed above the other on the page. The top article contained one of his original grayscale cartoons. The second article showed a color stock photo purchased from a third party website.

For ease of viewing, we’ve simply showed the two articles side by side below so you can get an idea of what the posts looked like. In the tests they were arranged differently.

When participants were asked which blog post they would rather share on Twitter, 90% chose the blog article containing the cartoon.

Test 2: To double check his findings, Anderson decided to vary the placement of the posts on the page. He reversed the blog posts with the one containing the color photo at the top of the page and the one with the grayscale cartoon farther down below it. As it turned out, 57 percent of those seeing the page still indicated they would prefer to tweet the blog post with the cartoon — despite being located lower down on the page.

Test 3: Next, Anderson showed participants a single article on a page. One page had a single dummy blog post with a cartoon in it. The other page had the same article, but with the stock photo. Again, participants showed a clear preference. Seventy five percent (75%) chose to share the page having the cartoon in it.

When Anderson added a quality post instead of the dummy content he had been using in the previous tests, the cartoon still won out. Sixty-four percent (64%) of participants still preferred the post with the cartoon.

Why did so many prefer cartoons?

According to some, cartoons were preferred because they seemed informal and added more content interest than stock photos.

Anderson says he used Verifyapp.com from Zurb for the test. Enrollapp.com was used to provide anonymous paid participants.

Participants were asked to add comments on why they made their choices. One said the cartoon made the content feel more informal and that this informality seemed in step with the Twitter audience. Another said the cartoon added value to the other content on the page while the stock image was just “decoration.”

How to use cartoons without violating copyrights

As with any image you use, make sure you have the proper rights to use it. Cartoons and stock images — like all original works — are automatically protected by copyright from the moment they are created. It doesn’t matter whether they have a copyright notice on them or not. Copyright law in most countries does not require a copyright notice.

If you decide to try out cartoons, please remember that Mark Anderson of Andertoons, like many other professional cartoonists, is self-employed. Self-employed cartoonists make their living through selling their work.

We’ve made it risk-free to experiment. In our Small Business Trends business cartoon gallery we offer six Andertoons cartoons royalty-free. You will not violate copyrights by using those six. (We’ve purchased the rights to make them publicly available to you, royalty-free).

Then when you see how well cartoons work, consider a low-cost cartoon subscription from Andertoons. That will give you the legal right to pick and choose from a wide range of cartoons for your website, blog, email newsletters and so on. You’ll have a large supply of images and not have to worry about copyrights coming back to bite you.

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