The Toughest Franchise Business In The World |  |
- The Toughest Franchise Business In The World
- New Business Trend: Pricey Play Date Consultants
- 5 Ways Your Small Business Can Beat the Summer Slump
- Three More States Add Affiliate Nexus Tax
- 10 Surprisingly Useful Pearls of Wisdom for Startup Founders
| The Toughest Franchise Business In The World Posted: 23 Jul 2013 04:00 PM PDT
You're already a customer of this type of franchise business. That means you know it…from a customer perspective. You've also probably heard that's it's a "tough business." And, you'd be right. It Always Wins The Popularity ContestAlmost 50% of the people that contact me are interested in buying one. Hands-down, it's the most popular sector in my industry. It's also very visible. If you guessed that I'm referring to food service…mostly restaurants of the QSR (quick service restaurant) variety, you're right. Before I get into why the food-service business is the toughest around, I want to share some industry data and trends:
Owning A Food FranchiseIf you're seriously considering becoming the owner of a fast food franchise, you need to make sure that you know exactly what your role is going to be as the franchisee. For example, if you wanted to own a McDonald's franchise in your area, not only would you have to have deep pockets; you'd also have to be prepared to be an owner-operator. In other words, if you have visions of opening up a McDonald's restaurant and managing it from afar, you had better adjust your lenses. That's because McDonald's expects you to be there. They also have a serious (and ongoing) training program, and it's not one of those 2-week ones. Another thing that's worth asking (yourself) is what type of lifestyle it is that you want to have as an owner. For example, are you looking for a franchise opportunity that will allow you to have a lot of flexibility when it comes to the hours you'll be working? If so, the food-service business may not be right for you. In most cases you'll need to be working in the business. In other words, you'll be there a lot. And, while you're there…working in your food service franchise, you're going to have to be a Jack or Jill of all trades. You'll need to be flexible. If an employee doesn't show up for work, you may have to drop what you're doing and fill-in yourself. I was in food-service and employee no-shows are very common. Why It's A Tough BusinessIn a nutshell, it's the absolute lack of control that makes owning a QSR…or any food-service establishment, very challenging. Now, I don't want you to feel that I'm trying to deter you from going after your dream. If you've "always wanted to own a restaurant" by all means investigate the opportunities that exist today. Just know that: You'll be Spending a Lot of Time Recruiting, Hiring, and Firing Employees Turnover rates in food service can be as much as 50% annually. So, be prepared to go through a lot of employees. You're Going to Have a Total Lack of Control When it Comes to Food Costs They vary tremendously. A lot of things can affect your food costs. Things like fuel prices (which affect delivery costs), natural disasters (which can wipe out crops) and other assorted maladies can and do affect food costs - your food costs. Translation: your profit margins can drop quickly. Your Restaurant Equipment Can Go on the Fritz In my experience, this tends to happen on your businesses busiest days and times. For example, if you own a full service restaurant and the dishwasher breaks, plan on experiencing one of the grossest jobs imaginable in food service; washing dirty dishes by hand. If you don't have clean dishes available, you can't serve your food. Websites like Yelp Can Sometimes Make or Break Things for Your Franchise On a positive note, a series of lousy reviews can help you figure out what's wrong quickly so you can address it. And, if you can't your franchisor can. Of course great reviews are just that; great. You'll be Working Harder Than You Ever Have in Your Life It was true for me during the many years that I was in the food business. Of course there's nothing wrong with hard work, but talking about having to work really hard and doing it 15 hours a day, 7 days a week, are two vastly different things. If you want to become the owner of a food franchise, start your search for the right one with your eyes wide-open. There are great opportunities in food service these days. You should be able to find one that suits you. Just talk to a lot of existing franchisees before you become one yourself. That way, you'll know what to expect as an owner. Fast Food Collage Photo via Shutterstock The post The Toughest Franchise Business In The World appeared first on Small Business Trends. |
| New Business Trend: Pricey Play Date Consultants Posted: 23 Jul 2013 01:30 PM PDT
A new business trend is making headlines. Pricey play date consultants are being hired by well-to-do Manhattan parents. The idea is to prepare children at an early age to make it into highly competitive private kindergartens. Sound crazy? Well, some media outlets seem to think so and are having some fun at these services’ expense. Yes, consultants are charging upwards of $400 an hour in some cases. And what they teach children certainly seems obvious. Lessons include how to share crayons, be at ease and play with other children. The young clients, it seems, are already overburdened by too many private lessons in violin and Mandarin to learn this on their own. But to be fair, consulting businesses offering this new and expensive option also provide plenty of other more accepted services. A glance at the website of one such firm, Aristotle Circle, shows services like tutoring and test prep, for example. Greater Competition Creates More DemandThe idea of greater competition in the education system leading to more need for support services is nothing new. Greater importance placed on standardized testing increased demand for test prep professionals in the first place. By branching into early childhood development, Aristotle Circle and other businesses are just expanding into a younger pre-K market. Nationally, a push to create public Pre-K programs has been on for years. The Pew Charitable Trust says the benefits of Pre-K education are more invaluable than ever. On its website, the organization states wryly that, “Today’s kindergarten is yesterday’s first grade.” So companies like Aristotle Circle, despite some short-lived derision, have clearly identified a trend. What do you think? Play Date Photo via Shutterstock The post New Business Trend: Pricey Play Date Consultants appeared first on Small Business Trends. |
| 5 Ways Your Small Business Can Beat the Summer Slump Posted: 23 Jul 2013 11:00 AM PDT
It's the dog days of summer, and your small business might be starting to feel like a ghost town. Everybody seems to be working shorter days, or on vacation, or just not ready to shift gears from browsing to buying. You may be thinking of throwing in the towel, but your business doesn’t have to suffer from a summer slowdown. While you can’t expect people to stop taking summer vacations, there are plenty of things you can do to give your small business a summer boost in unexpected ways. At the least, these tips will help you build a stronger foundation for when business shifts back to normal after the nice weather ends. Beat the Small Business Summer SlumpPut a Shine on Your Social Media AccountsChances are good that when your business is rocking, you don’t put much time into Facebook or Twitter. Use your summer breather to work on the social media profiles you keep meaning to improve, but never get around to. Now you can get to things that take a lot of time, like changing the background and themes of your Facebook business page from the standard white and blue to something that matches your branding, or bulking up your LinkedIn profile with all the details you haven’t been able to add yet. Working on social media over the summer will also help you get into the habit of spending a few minutes a day actively posting and responding to comments—something you can carry over when the slow season ends. Get Creative with Your CampaignsHave a wacky marketing idea that just might work, but you’ve been afraid to try it? Summer is great for experimenting with new strategies for putting your small business out there. Start that blog you’ve been thinking about since the turn of the century, launch a new product or service that you’ve been on the fence with, or try your hand at viral videos or guerrilla marketing tactics. If your business is already slow, it can’t hurt—and the results might surprise you. Meet New People (And Learn Stuff, Too)When you’re running a small business, you don’t get much of an opportunity for face-to-face networking unless you make one. Summer is the perfect time for seeing new faces and forging new contacts, because it’s conference season. Look for conferences, seminars, and summits in your industry that are nearby and affordable, and try signing up for a few of them. Head out prepared to network with business cards—printed, virtual, or both—and other material about your business, and remember to ask the people you meet for their contact information, too. You never know who might become your best small business friend. Reconnect With Your Customers Through a New (Or Improved) NewsletterSubscriber lists are still the best form of digital marketing. If you don’t have one, it’s time to start putting it together—and if you’ve got one that you’ve been neglecting, now is your chance to use it. A regular newsletter is a great way to stay connected with your customers, even when they’re on vacation or running a laid-back summer schedule. It costs about five times as much to land new customers as it does to cultivate repeat business, and a newsletter is a low-cost strategy to let existing customers know that you’re still around and available for them. Head for the Hills (Or the Beach, or the Park)In between all the work you’re putting into your small business this summer, don’t forget that you deserve a break, too. Small business owners are less likely than their traditionally employed counterparts to take a vacation—but it’s essential to give yourself a little downtime. So take an afternoon to hit the beach, or give yourself an extended weekend away from it all. When you head back to work, you’ll do so refreshed, revived, and ready to beat that business summer slump. The post 5 Ways Your Small Business Can Beat the Summer Slump appeared first on Small Business Trends. |
| Three More States Add Affiliate Nexus Tax Posted: 23 Jul 2013 08:00 AM PDT
If your business depends on affiliate sales, watch out. Three more states have passed the so-called affiliate nexus tax which affiliate business advocates say are hurting thousands of small companies. They say an estimated 90,000 affiliate marketers have already been affected nationwide either having to shut down their businesses as a result or move across state lines. Affiliate marketing advocates insist there is a better solution for the problem, but not all small business owners agree. Affiliate sales happen when a visitor clicks through a special link on your site to reach another site with which you have an affiliate relationship. If, after passing through your link, visitors purchase a product or service on the other site, you receive a commission on that sale for the referral. The Affiliate Nexus or Amazon TaxThe new affiliate nexus laws are an attempt to get around the 1992 Supreme Court Quill vs. North Dakota ruling. The decision essentially says states can only compel out of state retailers to collect sales tax from local buyers if they have a physical presence in the state. But that decision doesn’t sit well with cash starved state governments in need of more revenue. And some brick and mortar businesses that must collect sales tax in the state in which they are located have also complained the current rules are unfair. The response from state governments is the affiliate nexus laws. In most instances, the laws require out of state retailers to collect sales tax if a significant number of local sales are generated by affiliate marketers in the state. Lawmakers contend the affiliates give remote retailers a local presence. As of the beginning of last month, a total of ten states had passed affiliate nexus laws, affiliate marketing advocate Geno Prussakov reported recently. Those states include Arkansas, California, Connecticut, Georgia, Illinois, Kansas, New York, North Carolina, Pennsylvania and Rhode Island, Pussakov said. But in June, those states were joined by Maine, Missouri and Minnesota, all of which have added affiliate nexus laws of their own. The ResultsAdvocates of affiliate marketing including Prussakov and the Performance Marketing Association say the results of the new laws have been devastating to the industry. Online retailers like Amazon have decided to sever relations with affiliates in some states rather than collect sales tax under the new laws. For example, Amazon recently terminated its agreements with affiliate marketers in Missouri. Affiliates in these cases are faced with the choice of loosing their businesses or moving over state lines in an effort to maintain their affiliate relationships. The Performance Marketoing Association estimates that with three states adding affiliate nexus laws approximately 90,000 affiliates have had their businesses in some way affected by the new laws. This could include anything from forcing them to close down their operations to causing them to cross state lines to stay in business. One Possible SolutionOne possible solution, and the one supported by both affiliate marketing advocates and Amazon, is the so-called “Internet Sales Tax” or Marketplace Fairness Act. The proposed bill, which has already passed the U.S. Senate, would level the playing field, supporters say. If passed, it could require online retailers no matter where they are located to comply with local sales tax whether they have a presence in the state or other taxing jurisdiction or not. Not Everyone AgreesNot everyone likes the bill, however, and opponents have made efforts to kill it. With 9,600 taxing authorities in the U.S., complying with all those local sales tax regulations could be extremely complicated for some small business owners. Ebay has voiced opposition to the plan on behalf of its members. Ebay sellers would be required to collect the tax if their sales rise above a certain threshold. Individual ecommerce sites could also be required to collect sales tax in states or other taxing districts where they have sufficient sales. Tax Photo via Shutterstock The post Three More States Add Affiliate Nexus Tax appeared first on Small Business Trends. |
| 10 Surprisingly Useful Pearls of Wisdom for Startup Founders Posted: 23 Jul 2013 05:00 AM PDT
When starting your own company, no one is short on advice. Sometimes it’s difficult to sort through all those opinions to focus on what really matters — and your success occasionally depends on knowing which advice to tune out, too. We asked members of the Young Entrepreneur Council, an invite-only organization comprised of successful young startup founders, what piece of advice they found to be most helpful (even if they didn’t know it at the time).
Here's what YEC community members had to say: 1. Proliferate Positives, Don’t Fix Negatives “When starting to work with other people, I figured we would find out what people did not do well, fix it and make people well-rounded and good at everything. I was wrong. It is important, almost necessary, that you find what people excel at and have them do that day in and day out. If everyone is “good” at everything, you will never be an industry leader and disrupt the status quo.”~ Bryan Silverman, Star Toilet Paper 2. Be Conservative in Financial Modeling “One of our early mentors was my business partner’s dad. An entrepreneur himself, he always used to say “growth eats cash” to us. Working in his basement, it felt irrelevant. 3. Know Your Vices and How to Use Them “Entrepreneurship is hard, and it’s not for the faint-hearted. Rudy Karsan, the CEO of Kenexa, recently said entrepreneurship is often about ego because you can’t take an idea no one believes in and make it successful. Having an ego is a vice, but if you can accept that you have an ego, you can harness it and make it work for you.” ~ Benish Shah, Vicaire NY 4. Work Smarter, Not Harder “So many entrepreneurs think they’ll become successful by working 100 hours per week. Instead, business owners should focus on time management and eliminating what is unnecessary, as well as keeping a keen eye out for burnout. If any signs of burning out start to present themselves, take a break or step away for a half day or so.” ~ Andrew Schrage, Money Crashers Personal Finance 5. Don’t Try to Please Everyone “Some people, by nature, will never be happy. They complain about everything and demand endless attention. These types of clients are poisonous to your business because they zap time, resources and employee morale. No amount of money is worth dealing with a problem client who makes your life, and the lives of your staff, miserable. Cut these clients loose to preserve your sanity and happiness.” ~ Brittany Hodak, ‘ZinePak 6. Exit Your Comfort Zone “I was told that if I only did the things I was comfortable doing, I’d never grow. And while there are still certain situations that “scare” me, I’ve learned that it’s only by doing that I can develop key entrepreneurial skills. Best of all, the more of these situations I confront, the fewer “scary” ones materialize. ” ~ Nicolas Gremion, Free-eBooks.com 7. Ignore the “Right” Way to Do Things “During business school, one professor harped on the fact that as a startup, you should do “risky” things. He advised us not to incorporate immediately, but rather, use that time to work on the business until we knew the form it should take. He also advised selling from day one while we worried about gaining permission. Figure out if you have a good business and “standardize” it later.” ~ Aaron Schwartz, Modify Watches 8. Fail and Adapt Fast “Fail fast. Accept failure — whether it is as small as a product feature or as large as a pricing model. Turn those failures into success by truly responding to what the market wants and not what you think it needs.” ~ Ryan Frankel, VerbalizeIt 9. Say “No” “I thought it was crazy, but turns out, saying “no” is great advice. When I started my business, I got a ton of offers — partnerships, prizes, ideas, the list goes on. Accepting any of the offers would have been a distraction to my main goal of running a company. It was best to focus on the company and what it needed to accomplish rather than jumping on ideas. Companies can thrive on a simple "no."” ~ Manpreet Singh, Seva Call 10. Schedule Your Personal Time “I wish this advice wasn’t necessary, but it most certainly is. As your company grows, your time becomes increasingly precious. If you don’t schedule time to work out and see friends and family, it won’t happen. Along with your meetings and project goals, you need to put personal time in your calendar. Stick to the schedule no matter what. Personal time needs to be sacrosanct!” ~ Mitch Gordon, Go Overseas Pearl of Wisdom Photo via Shutterstock The post 10 Surprisingly Useful Pearls of Wisdom for Startup Founders appeared first on Small Business Trends. |
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