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Some businesses arrive and depart about as quickly as sunrise and sunset — think cookies or cupcakes or donuts. Sort of like a one-trick pony, catering to a fleeting taste is far riskier than seeking to serve a market niche with enduring demand. Sure the new cupcake confectionery might be jammed for the few months after opening, but after a while, people may start to crave cookies, banana bread or brioches and they’ll likely end up at the full-service bakery that supplies a treat for every mood. On the other hand, some things, like certain services, just never go out of style. Think about what you need on a regular basis, related to household maintenance and upkeep, educating your children or taking care of aging parents. So when you’re contemplating starting up a new business, always consider long-term viability, larger market forces and filling an ongoing market need. You can find plenty of choices in the service sector. Among the options are:

1. Health Care

Senior care is one of the fastest growing needs as the Baby Boomers age. You can also find opportunities with businesses to modify homes for seniors.

2. Temporary Staffing

Many businesses need employees to work flexible schedules on an as-needed basis. This is especially true in this era of extra-lean corporate staffs.

3. Cleaning Services

You can find great options for house cleaning or business janitorial services. Other ideas include carpet and upholstery cleaning services. In an economy where many businesses have outsourced these jobs, opportunities abound.

4. Business Services

In one of the fastest growing segments of the franchise industry, options include printing services, business coaching services or companies that offer document shredding. So contact a franchise coach, who can help you locate a business that best matches your skills and experience. Then when you take the leap, you’re making an educated decision based on strong fundamentals and solid research.

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at dcitrenbaum@gmail.com or at (484) 278-4589.

Almost everyone at one time or another contemplates starting a business, whether to escape from the frustrations of corporate America or to finally find fulfillment for your creative self, long trapped in stifling jobs. Of course, the failure rate for new businesses can seem a daunting barrier. The Small Business Administration puts the survival rate of businesses at only 50 percent over five years. The good news is that the odds for survival improve the longer you’re in business. The toughest part is getting through the uncertainties of the startup period. The truth is not everyone is suited to starting and running his or her own business. And those who succeed learn how to capitalize on their strengths and gather as much preparation as possible before startup. You do not want to learn as you go or, before you know it, your money will run out. Fortunately there are many ways within easy reach to improve your odds. First, you must answer the most basic questions about whether you’ve got entrepreneurial talent and the right experience and skills for running a business. A recent Gallup survey of entrepreneurs found that “entrepreneurial talent significantly increased one’s odds of business success.” What separated these business owners? According to the 2014 Gallup study, they were more likely to:

• Clearly articulate their competitive advantage to their clients
• Make decisions about pricing, product or service with their customers in mind, and
• Spent much more time planning for growth and aligning employee responsibilities with goals

In short, they were strategic in their management. Successful entrepreneurs have confidence, independence and determination, think creatively, can delegate, seek knowledge, and build lasting relationships, according to the study. You might have the skills, knowledge and experience, accumulated after years in the workforce, to successfully manage a new business, especially if you have established backroom expertise to help you along the way. The best place to find added support is with a franchise, which comes with all the training and operating systems you need to get started in a new business. So if you feel you may come up short on some of the qualities shared by entrepreneurs, you can rely on the time-tested experts that have helped thousands succeed as new business owners.

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at dcitrenbaum@gmail.com or at (484)278-4589.

So you’ve selected a franchise and have your initial investment capital saved and now you want to know: How much money will I make?

To answer the question you’ll need to weigh your costs against expected potential revenues.

The beauty of a franchise is you actually have a good shot at figuring all these numbers out. Between the financial disclosure document (FDD) and information available from existing franchisees, you can get a good feel for expenses, as well as potential revenues, so long as you factor in differences related to location, local market and, not to be forgotten, the range of talents and experience individual franchisees bring to their businesses.

Why is it so important to do this math upfront? In a phrase, operating capital.

Lots of folks eager to become entrepreneurs for all the usual reasons —to control your own schedule, achieve work-life balance, be your own boss, and make more money —may neglect to factor in all the capital requirements.

At the beginning of a new business comes the transitional stage. This means you need money to run your business until you learn your way around a new market, new procedures and customer care. During this transition, you won’t generate enough revenue to cover expenses. So it’s essential you have enough capital to keep the circuits humming.

Your first task is to get a realistic sense of how much capital you need to get started. Fortunately, the FDD will provide this view of your costs. Some companies will even provide an idea of potential earnings. A franchise coach can help guide you through the process, but it’s never too early to start your research.

Three Keys to Understanding Your Potential Earnings

Know your Timetable

Most businesses take three to 12 months to start earning profits. The slowest to become profitable are franchises with a lot of costs or ones that take longer to build a customer base. And if the margins are thinner, you need to generate more volume. For example, a document shredding franchise, which requires expensive equipment, may take as long as 18 months to run in the black but can eventually become quite lucrative. Retail franchises can be among the quickest to turn a profit because a good location will quickly draw customers.

Accurately Estimate Your Fixed Costs

The franchise disclosure document provides a list of all your costs —everything you need to open —which are far more extensive than just the initial franchise fee. Examples of the types of fees you’ll find under Items 5 and 6 in the FDD are: IT and system setup and initial marketing. Then comes ongoing fees, such as local marketing additional training, ongoing IT or software costs, costs for audits, insurance, and on and on. In short, all of the costs you would expect to encounter.

In your calculations, you should also factor in the cost of consulting an attorney and accountant, which we strongly recommend.

Estimate Potential Income

Flip now to Item 19 of the FDD to read if the franchisor has made any earnings claims. Only about one-third of franchisors make earnings claims, and how franchise companies address this issue varies.

To fill out the picture, your most important information can be found in Item 20, where you’ll find a list of franchisees. You want to call as many franchisees as possible, preferably those operating in locations similar to yours, to verify all the information in the FDD and get an idea on profits. Word to the wise, avoid the question: How much money do you earn? Instead, try a softer approach, such as: “How long until I can expect to make $100,000.”Then try out different income amounts.

All three steps are essential to your preparation. Doing the due diligence required to choose the right franchise upfront will help you experience the pleasure of being your own boss for years to come.

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at dcitrenbaum@gmail.com or at (484) 278-4589.  

Thinking about buying a new business or franchise? Then Caveat Emptor! The best way to protect yourself from stumbling into a bad deal is to carefully research your new business niche and consult a knowledgeable franchise attorney. Buyer beware, often considered a consumer warning, applies just as strongly to those thinking of buying a business. In the world of franchising, federal law has established disclosure rules to help people make wise choices. Still, it pays to consult an attorney that specializes in franchising. Of course, any franchise coach or attorney will advise prospective franchisees first to read the franchise disclosure document (FDD), which the law requires be written in standard English, so it can easily be understood by the non-lawyer. You still need a lawyer who specializes in franchises to review the franchise agreement or contract to make sure your interests are protected. Since experienced franchise lawyers know firsthand where franchisees get into legal difficulty most often, they can help you avoid the pitfalls that may exist in some franchise agreements. Most of the items in the FDD are incorporated in the franchise agreement, but an attorney can help you review the first four items, which provide background on the business and its senior executives, most particularly whether they’ve been involved in previous litigation or bankruptcy. And while there are costs involved, you can find an attorney who will provide these services for a flat fee. You should consider it part of your cost of getting into your own business. “I get phone calls daily from people who did not consult an attorney upfront,” said Nancy Lanard, a Philadelphia attorney who specializes in franchise law and works with clients across the country. “It’s much harder at that point.”

Before buying a franchise, be sure to review this checklist:

1. Review Franchise Agreement

Five or 10 years ago, most franchise agreements were completely non-negotiable, Lanard said, but now she negotiates non-material changes to most franchise agreements to protect the interests of the franchisee. Franchise companies are reluctant to negotiate any material changes for an individual franchisee because it would require them to revise their franchise disclosure document, an expensive proposition, she added. In her review of the contract, Lanard looks for issues that might create undue financial burdens on the franchisee, including how notice on default is handled and remedies applied.

2. Check Trademark Registration

Since the trademark is “the cornerstone of what they’re buying,” Lanard’s firm checks the trademark registration to make sure another firm isn’t operating under the same trademark in the designated territory — not an unknown occurrence.

3. Set Up A Legal Entity

Lanard strongly advises franchisees to set up a legal entity before signing any agreement with a franchise company to protect themselves from third party claims. Each location should be a separate entity, she added. Her firm charges a separate flat fee for this service.

4. Negotiate A Lease

“A lease can make or break a franchise,” Lanard said. Good franchisors should offer help finding a good location. They might have demographic studies and a great relationship with local brokers. They also can evaluate the lease from a business perspective, help negotiate good business terms, favorable rent, build-out costs, renewal terms, and so on. “Leases are highly negotiable,” Lanard said. A lawyer can protect the franchisee from onerous costs that landlords may try to impose, and a good lease can save a lot of money over the long term. A separate flat fee is charged for this service.

5. Protect Territory

Disputes over territory are “probably the No. 1 litigated area of franchising,” Lanard said. A good franchise attorney will make sure that the language in the agreement regarding territory affords the franchisee an actual separate, exclusive territory. A cautionary tale is a franchise that set territory based on zip code, which allowed franchisees to open across the street from one another — not a great way to stay in business.

6. Generally Good Advice

Likely topping this list will be for prospective franchisees to carefully study the fees and other costs — items five to seven in the FDD — required to set up a franchise. Take the most conservative approach since many businesses fail as a result of having insufficient capital to sustain the business until it can operate in the black. Good research cannot be over emphasized. Lanard tells a story of a woman who phoned, excited about purchasing the franchise of her dreams in the automotive sector, a franchise she had aspired to operating since she was a little girl. While she wanted Lanard to review the franchise documents for her, Lanard suggested she interview franchisees to see if they were satisfied with the franchisor’s support and training. When the woman called back, she reported that all the franchisees she spoke to were unhappy and wished they had never bought into the franchise company at all. Better to face this type of disappointment than the losses that can accrue as a result of signing a bad contract and trying to to fix it later. Ready to make your dream of becoming an entrepreneur come true?

Get your free evaluation today!

Contact Dan Citrenbaum to help you create the career you’ve always wanted. Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at dcitrenbaum@gmail.com or at (484)278-4589.

You fell in love with a little business years ago and have scrimped and saved to open one of your own. Now you’re this close to following your dream. Are you thinking of starting a business? As an expert in start-ups, let me just say whoa! To succeed with a new business, you require hard facts. And while it’s good to have a strong interest in the business, let reason overrule passion. It’s better to know the business side. Ask yourself, have you done your research? What do you know about the business? The market? Costs to operate? If you can’t answer these questions, you’re not ready to plunk down your money, or you risk losing it all. The better your preparation, the lower your risk. And the best way to get the facts about a business is with a franchise, which has dozens of owners, perfecting and improving the system along the way. If you’re keen on innovating your own unique business, there’s still a lot you can do to prepare. Get as much expert advice as possible and write a realistic business plan, which means allowing enough time to get everything up and running. Since you may be reinventing your systems as you go, be prepared for setbacks and be flexible enough to try new ideas. With a franchise, your very best resources are the franchisees currently operating all around the country. With any established franchise, you should find dozens of owners willing to talk to you. Just be sensitive to their time constraints and prepare your questions ahead of time. Talk to as many as possible.

10 Questions To Ask Franchisees

1. Does this franchise have the potential to earn in the six figures?
2. What made you choose this franchise?
3. How long have you had the business?
4. What is your background?
5. Is the training and ongoing support sufficient?
6. How long did it take you to reach break-even?
7. How difficult is it to find good employees?
8. How would you rate your relationship with the franchisor?
9. What is the most important thing to know when buying this franchise.
10. Would you buy this franchise again?

As your interviews progress, allow the conversation to flow, so if a franchisee says something particularly intriguing, go off script and ask a follow-up. For answers to specific questions regarding your costs for such things as marketing, merchandise, uniforms, and so on, you can turn to the franchise disclosure document, which you can get from the franchisor. Once you have answers to these questions you’re ready to start on your path to becoming a successful entrepreneur. You might learn that the business of your dreams is actually a very poor risk. The best entrepreneurs find profitable niches in which their businesses can flourish. So, is starting a business in your best interest?

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at dcitrenbaum@gmail.com or at (484) 278-4589.

It seems every time you look at the business bestsellers list, there’s a new book for how to get rich quick, become a successful entrepreneur or take control of your own life.

We all seem to be searching for some version of the same thing: a chance to reach your potential in a career where you’re in control. For most of us, the idea of starting a business of one’s own inspires more fear than excitement, and the incipient desire remains an unfulfilled dream.

Yet, there is a great way to go into business for yourself without all the unknowns. That is with a good franchise, which comes with a tried-and-true system, as well as training and support for you and your staff to help you get across the finish line to smooth operations and profitability.

Before you sign any contracts, you have the ability to know exactly how much money you’ll need and what you’ll be getting for your money. That’s because franchise companies are required by federal law to disclose a virtual guidebook to their product in the form of a franchise disclosure document (FDD).

Not all franchises are created equal. Some are better than others, and you have to delve deeply to find out the truth of what they’re offering and how their promises match reality. So rather than rely on some cursory preconceptions you may have about a well-known brand, commit to doing a thorough due diligence on any business you seriously consider.

What you need to know:

• The franchisor’s track record

Do an Internet search. You can find history of litigation, bankruptcy and information about their top executives in the FDD. (Items 1-4). You want a company in good standing that can stand behind you all along the way.

• The costs

You should get a very good picture of all your startup costs, from the initial franchise fee through the cost of setting up your office/store, ongoing marketing and any ancillary costs like insurance and legal fees.

• Details about the franchise system. How does it work? Is it easy to follow?

Franchisees are your best source for answers to these questions. The franchisor can tell you how it’s supposed to work, but the franchisees will tell you if it’s working. Find a list of franchisees in the FDD.

• The nuts and bolts of what it takes to run the business

What skills are required? What experience may be helpful? What is the day-to-day life of the owner like? Does this suit you?

• Do you like the management staff?

You need to have a good rapport with the people you’ll be dealing with on a regular basis. Do you feel comfortable talking to them? Are they receptive to your questions, concerns, etc? Do you trust them? You should have multiple conversations with key personnel on the phone and in person before you sign any contracts.

• Is the franchisor’s training program and support sufficient?

This is critical information, especially if you’re entering a business in which you have little experience — which is the beauty of a franchise. You can change your careers and try something different. So make sure the training and support are up to par by checking in with franchisees.

• Would franchisees buy their business again?

This question seems the ultimate test of a franchise’s merit. Don’t forget to ask this question of franchisees.

Whether you start a business from scratch or buy a franchise, the decision should be preceded by a deliberate methodical process of review. You can be sure with the huge array of franchises available, you can find one that suits your needs.  And when you make a good match to a franchise with a great record of success, you can start your new business with the wind at your back.

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today!

Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a franchise coach, Dan brings years of experience helping people select and buy a franchise or existing business.

Dan spent 27 years as a successful entrepreneur and coach.  In 2010 he started the next stage of his career – he bought a franchise. And what does Dan say about his decision to buy a franchise?  He’ll tell you “It’s the best business decision I ever made.”  You can reach Dan at dcitrenbaum@gmail.com or at (484) 278-4589.

© Dan Citrenbaum 2024