Why You Should Hit The Pause Button Before You Buy That Franchise
If you’re seriously contemplating the purchase of a franchise, there may come a time in the process when you’ll need to consider stepping back for a bit.
I’ve found that sometimes (especially when making major life decisions) it’s wise to put things on pause.
That’s because you are too close to whatever it is you may be about to do. Being too close to a situation involving something big (like the purchase of a franchise business) may cause your decision-making skills to be affected in a negative way.
You are too close
Of course you’re “too close.” You’re probably so hyper focused on the franchise opportunity you’re investigating that you may be missing a few things that could be pretty obvious to an outsider, but not that obvious to you.
That’s why (at some point) it’s important to bounce your ideas off of people that you know and trust.
Tip: Don’t share your ideas – like on what franchise or franchises you’re looking at too early in the process because you don’t know enough about the franchises you’re interested in to ask for opinions or advice. It’s too easy to be deterred by wellmeaning friends, family members and “advisors” to begin with. Wait for the right time, like when you have a lot of facts and figures in front of you.
One more thing: Don’t ask for opinions and/or advice too late in the process. Because, if you’re at the point of no return-which is when you’ve convinced yourself without the shadow of a doubt that whatever opportunity you’re looking at is perfect for you, no one will be able to convince you otherwise.
Hitting the pause button
It’s when you hit the pause button…when you step back and take a little breather, that good things can happen. Things like possibly getting a better perspective about what you may be about to do from people who will give you honest feedback.
Now, you don’t have to try to find people that will shoot your ideas down. That’s not what I mean by finding people who will give you honest feedback. Feedback doesn’t automatically have to be negative. But, you do need to find people who may not tell you what you want to hear. It’s honest feedback you want.
Besides talking with friends and family members about your idea, I encourage you to find others, like people in the small business community who can give you valuable feedback. There may even be a few in your backyard.
Small Business Development Centers (SBDCs) have business counselors on staff who assist would-be small business owners with things like business planning, financial packaging and lending assistance. These centers are funded in part by the U.S. Small Business Administration. Go here to see the list of SBDC’s and contact one today. Their services are free.
Do you know any small business owners? If so, ask a couple of them to look at your idea.
Do you have any old college friends that are in financial services or the legal profession? They could end up becoming great resources for you to share your plans with.
Taking a step back – hitting the pause button before you buy that franchise you’ve been investigating could turn out to be one of the wisest business decisions you ever make.
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Small Business Development Centers – Get Help Starting and Growing Your Business from Your Local SBDC
Need help getting your business off the ground? Baffled by the steps involved? Looking to break into new markets or take advantage of the latest in social, web and mobile marketing? Look no further than your local Small Business Development Center.
Small Business Development Centers (SBDCs) have been around for 35 years. With nearly 1,000 locations across the country, each provides small businesses and entrepreneurs with access to the essential resources to start and grow. From in-person consulting and training to a mobile app webinar series that can help budding entrepreneurs plan their escape from the nine to five – during their commute!
For small businesses that seek out the services of their local SBDC, the payoff is significant:
- SBDC clients generate $100,000 in sales every four minutes and create a new job every 7 minutes!
- Over 58 percent of pre-venture SBDC clients start new businesses (that’s a new business every 33 minutes)!
So if you thought you knew everything about what your local SBDC has to offer, think again! Here’s a glimpse of the valuable services they provide:
FREE face-to-face business consulting
Small business owners and aspiring entrepreneurs can go to their local SBDCs for FREE face-to-face business consulting and at-cost training on topics including:
- Writing business plans
- Accessing capital
- Managing your taxes
- Regulatory compliance
- Federal contracting
- Technology development
- International trade
Start your dream business – mobile apps make learning a breeze
If you’re looking to start your own business but are tied down by your current job, SBDCs are making it easier to make the transition to entrepreneurship with a business-on-demand mobile app webinar series! Developed by Pennsylvania SBDC, but available to anyone, the First Step: Starting a Business webinar series walks aspiring entrepreneurs through the process of starting a new business venture and can be viewed on all mobile devices. Each webinar lasts about 15 minutes and covers topics such as how to legally structure your business, writing a business plan, funding options, and selling advice. Other SBDCs around the country are also offering similar type mobile-app-ready entrepreneur training.
Just imagine, one day you could literally go into work and tell your boss you quit, because you’ve got your business started while you’ve been commuting back and forth!
Get help with your next web or IT project
Starting any new IT or web project is a costly and complex endeavor. To help small businesses get the best return on their investment, Delaware SBDC has established Web-IT-Match-Coach program called Digital Compass. The program provides comprehensive guidance to small business clients on their next web or IT project. Advisors work with the business to identify and diagnose the business problems, and then help identify and interview solution providers to get the best match. They also coach both the business and the Web/IT provider during the course of the project to achieve the best solution to grow the business.
Optimize your web marketing
In addition to one-off training sessions, some SBDCs are recognizing the need for more in-depth programs that help small businesses harness the potential of technology to boost sales.
The Georgia SBDC, for example, runs a Digital Marketing Boot Camp designed for small business owners who want to learn how to integrate technology and marketing with tactics like search engine optimization, social media, mobile marketing, paid online advertising and content marketing.
Access PCs, software and more
Some SBDCs also provide access to business software and other resources. Loudoun SBDC in Virginia, for example, features an Entrepreneurial Resource Center featuring computer and printer access so that clients can conduct market research, create business plans, manage their finances and more. Business guides, videos, books and publications are also freely available and counselors are available to assist.
Find your local SBDC
Want to know more? Find out what your local Small Business Development Center can do for you. Here’s a complete list of SBDCs by state.
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Swimming in Shark-Infested Waters: Avoiding Entrepreneurial Scams
Are you an entrepreneur looking to get your startup funded? Be careful.
I suppose it’s no surprise that hopeful entrepreneurs are good targets. Too often we’re led to believe that getting investment money is the ultimate victory. Supposedly we’re all going to be successful as soon as some investor says “yes” and we get a big check. And that eagerness to get the money makes us vulnerable to sharks.
While you’re probably as alert as anybody to scams involving fake Nigerian royalty, or free weekends in resorts, your normal anti-scam radar can malfunction when you’re in startup mode looking to get financed. Keep your eyes open and stay safe.
Write a business plan. Don’t buy one.
Take, for example, the business plan writers who sell their services using the claim that the look and feel of a written plan will get you investment. That’s just not the case. Investors invest in the people, the business and future potential growth. But overpromising on results isn’t necessarily a scam if the business plan writers actually deliver a written plan.
On the other hand, people selling pre-written business plans with claims like “investor-ready business plans” for sale and “just fill in the blanks” know they are lying.
A lot of general and obvious rules apply. Deals that seem too good to be true are almost always just that – not true.
Real investors write checks – not invoices
Yes, it takes money to make money. But that’s about ideas, execution and working capital – not sharks. Beware of consultants, brokers, loans and offshore deals that collect your money as a step towards getting investment. For more detail and a good list, check out Martin Zwilling’s "Shortcuts to Entrepreneur Funding are Usually Scams" on Forbes.com. And Adam Roy of Gaebler Ventures has good related advice in a post called "Recognizing and Avoiding Business Scams." Here are some specifics:
- Fake investment brokers who contact you saying they represent investors, but require a retainer up front. You pay the money, and whoops, sorry, the investors disappear.
- Fake investors, often from overseas, interested in investing but only after you pay some fees to cover costs including due diligence.
- Offers of commercial loans, promising quick approval, but requiring stiff fees for fast processing. Then the lender vanishes.
- And of course you don’t fall for pyramid schemes, chain letter and other classic get-rich-quick schemes.
- Beware of businesses that don’t like written contracts and documents.
- Always check references and don’t settle for references they give you; do a web search and find your own.
Magic formulas, magic information
Be very careful with people selling names and lists for fat fees. For example, lists of commercial lenders, angel investors or venture capital firms are available free for anybody who can do a competent web search. But they are also sold as scams for hundreds of dollars, packaged as if they were magic formulas for easy money.
Turnkey start-your-own-business packages, often bundles of software and information you can use to set yourself up in your own business, are usually too good to be true. For example, you make money from home processing bad debts or insurance claims. But think this through: How many businesses are there that will actually work with software and a how-to binder? Don’t you have to know the business, and have the selling and administrative skills, before that would work?
It’s true that legitimate network marketing companies sometimes require a certain up-front investment for products, kits or educational materials. But the good ones provide money-back guarantees on several levels, and the best ones never promise any get-rich-quick results or disguise the reality of the hard work involved to make it to the top with their companies.
Angel investment pay-to-play
Many legitimate angel investment groups charge a fee for processing and submission to a screening process. For example, the group I’m a member of, Willamette Angels, is right now taking submissions for a May investment of six figures in local startup. We charge $125 to the startups that enter (if you’re a startup in Oregon and interested, here’s a link: Willamette Angel Conference). The fee goes not to us, the angel investors, but to the local chamber of commerce that organizes the event. And startups that submit get at the very least a real review and great feedback from real angel investors, worth a lot more than the submission fee.
On the other hand, you can find startup events that charge thousands of dollars to startups for a chance to pitch to a group of angel investors. And you can find some very vocal critics of these events, who call them a scam. How much is okay to pay? I think paying a hundred dollars or so to a local chamber of commerce is fair, and paying thousands to pitch is probably a bad deal.
Red flags to watch for
Think it through. Of course you should beware of any business that has only an online presence, with no physical address; or any scheme that has you sending money to a list of names; and a work-at-home business that requires upfront investment; or a company with no contact information beyond an email address or telephone number.
The more things change, the more they stay the same
Yes, you have to “spend money to make money”—but no legitimate venture capitalist invests in new businesses through oddball approaches such as phantom funding, “qualifying” you with cash or inviting you to join a long chain letter. What your gut tells you is still valid: even in the exhilarating world of entrepreneurship, if something sounds too good to be true…it probably is.
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Celebrating National Entrepreneurship Week: 10+ Business Resources for Millennial Entrepreneurs
Did you know that nearly a quarter of all new U.S. entrepreneurs come from the 20-34 age group? (source: Kauffman Index of Entrepreneurial Activity) And, as more and more millennials express enthusiasm about business ownership, this number is sure to rise. In fact, back in 2011, a nationwide poll of 18-34 year olds found that 54 percent wanted to start a business or had already started one. But faced with the stagnant economy of the time, many were holding back.
Now that that economy is rebounding, entrepreneurship is once again an exciting proposition for young people.
So, what better way to celebrate National Entrepreneurship Week (Feb 21-28) than to showcase all the great resources that help pave the way for the next generation of entrepreneurs, small business owners and job creators! Check them out below:
SBA’s Young Entrepreneur Guide
This one-stop resource includes information about getting started – including a free online business planning tool, training links and more. For example, this free online course Young Entrepreneurs: An Essential Guide to Starting your Own Business walks you through the steps of turning an idea into a business reality. It also outlines what it takes to get started – making sure your business is registered, structuring it legally, getting financing and more.
Get help – whatever your walk of life
There are numerous resources and opportunities that can help young entrepreneurs get the foot up they need:
- SCORE Mentors – Get advice, counseling and mentorship from someone who’s walked in your shoes. Whether you have a question that can be asked over email or could benefit from regular in-person, one-on-one mentoring, SCORE is an invaluable resource. With a network of over 11,000 mentors across the country (all of whom have run their own businesses), SCORE provides free advice that can help you get your business off the ground. SCORE also hosts regular workshops, webinars and all sorts of good stuff!
- My Brother’s Keeper – Despite the turnaround in the U.S. economy, many millennials are still struggling. One in four are currently out of work and people who grow up in underserved communities face very unique challenges, including higher poverty and unemployment and, in some cases, criminal records. In response to these challenges, the SBA and The White House partnered last year to launch a new initiative – My Brother’s Keeper. The initiative is still in its infancy, but stay tuned for educational in-person and online resources aimed at helping young people harness their talents and learn entrepreneurial basics and financial literacy.
- Other Resources – Small Business Development Centers, Veterans Business Outreach Centers and Women Business Centers all provide entrepreneurs with free business consulting and training services. Find one near you.
Get financial assistance
If you need capital to start your business, consider these options to traditional bank financing (which can be hard to secure – only 27 percent of small businesses get a loan this way):
- Don’t Qualify for Conventional Business Loan? Understand Your Options – From SBA loan programs to business lines of credits and small business friendly banks and credit unions, check out your options.
- Tips for Borrowing Startup Funds from Friends or Family – A surprisingly large number of small businesses get started with money from those they know well. Here are some factors to consider before you do so.
- Crowdfunding – SBA offers several resources to help you learn more about this growing source of small business funding including this Introduction to Crowdsourcing, a self-paced course on the SBA Learning Center, and Crowdfunding Sites: Top 3 Tips to Get Funding Once and For All as well.
Get assistance paying off student debt
If your student loan debt is holding you back from starting your own business, find out how the Income-Based Repayment Plan can help. Designed for federal student loans, this government program can help you lower your repayments.
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