NEWS AND RESOURCES

General Business News for October 2001

And The Band Played On
All too often, we tend to take bad news and make it worse. What better example do we have than to look at the September 11, 2001 Attack on America and it’s aftermath? After the attack, people were afraid and airline sales plunged. Hotel reservations were cancelled and, in general, company after company began to lay people off. The ripple effect was in full swing.

While the Attack on America was the most heinous crime this nation has ever been committed against us, and has clearly served as a wake-up call, it was not the most devastating event the world has ever seen. The President was right in asking us all to get back to the business of living our lives. We just needed to do it more carefully.

Consider another disaster early in 1912. In that year, the band of the H.M.S. Titanic continued its duties and provided the ship’s passengers some measure of comfort as the great ship moved steadily to its destruction. No doubt, the effect this familiar sight had on the passengers allowed some to maintain their composure – an attribute that helped them survive.

That’s what this article is partly about this month; that the only thing that really changed on September 11, 2001 was our innocence. And, unlike the Titanic, we, as a nation, are not going down. It’s apparent now that we’re part of the rest of the world and can be touched by all of its evil and that, therefore, we must be more careful.

And as much as we grieve for the loss of all the lives we know our individual bands must play on to send the message that evil will not win. Our dreams did not change on September 11, 2001, just the way we plan to achieve those dreams.

One of those dreams that many Americans share is to be their own boss. This isn’t new. We’ve covered that topic before. But how do you go about it?

To be sure, one tried and true way is to go out and start up your own. There’s nothing wrong with this. That’s what made America great. Nothing wrong…except building name recognition costs a great deal of money and name recognition is everything in retail sales.

You could buy an established business with good name recognition, but the problem here is finding that business. Just because you want to buy doesn’t mean the other person wants to sell.

Another alternative is to acquire a franchise. A franchise is your exclusive right to use a particular product or business format in a given area. The area can be small or large, depending on the franchise agreement. The right franchise has one major advantage over starting a business cold. Most of the time, franchise names already have great name recognition. Ever hear of McDonalds or Burger King?

A secondary advantage to a franchise can be the business knowledge of other franchisees and the franchisor. Every time you go into a McDonalds or Burger King restaurant, you pretty much know what to expect. The stores all have a basic look and feel that’s been developed by the Franchisors based on what works. That knowledge lets you concentrate on making money instead of reinventing wheels that have been proven to work over decades. With this in mind, let’s look at a few things you should consider when deciding to take the plunge into “franchiseehood.”

Do I really want all of this?

The first question to answer is, “Do I really want to be my own boss?” This sounds like an easy question, but if you’ve never been the boss before, it’s not so simple. Contrary to popular belief, the boss doesn’t have it so easy. There’s payroll to meet, bills to pay, employees to supervise, bankers to make happy and a million other things the boss has to be concerned about. If your idea of a hard day is starting at 8:00 am and going home promptly at 5:00 pm, do yourself a favor and pass on business ownership. In most companies, the boss goes home long after the rest of the company.

Are you a risk taker? If you aren’t willing to take risks, your business won’t be successful. They may be calculated risks and, on the surface, seem to be no-brainers, but risk is risk. You must be willing to take chances and be able to sleep soundly while waiting to see the results. If not, stay where you are or at least remain someone’s employee.

Is what you’re about to do something you enjoy? You’d better enjoy the work you’re about to undertake. If you don’t, you’ll probably not be successful. How many times have we heard “Follow you bliss?”

There are a host of other considerations, but the bottom line is you need to examine all of your present circumstances, as well as anticipated changes, and be sure you can pay the cost of going into business for yourself.

What kind of franchise should I acquire?

Assuming you’ve decided to purchase a franchise, your next step is to decide what franchisors have a product you feel might work well for you. That’s a pretty easy decision don’t you think? Whatever you’re interested in will probably be a good choice for the local market, right?

Wrong! While the franchise you like is successful in other parts of the country, that doesn’t mean you’ll be successful in your local market. In the mid 1990s, there were markets that seemed ripe for computer software stores. The PC was becoming popular and more and more software was needed. Retail computer software stores seemed to be a natural progression in serving the ever-growing home market. But that’s not what happened. In some markets, store after store opened and then closed. While the entrepreneurs who opened them thought it was a neat idea, the public wasn’t ready yet in those markets.

Don’t succumb to the “everyone I know thinks it’s a great idea” trap. Remember, you probably don’t know everyone in your local market. That means you’re probably friends with like-minded people. Of course they’ll think your idea is great! It’s the people you don’t know who’ll make you successful. If they don’t like the idea, you won’t be in business long.

If you want to know what’s needed in your area, drive around; look at what’s there and what isn’t there. What kinds of stores do you see? Are there a million clothing stores and only one fast food restaurant in your local shopping center or mall? Is this because clothing sells and food doesn’t, or is no one interested in selling french fries all day? Talk to the local merchants. Ask them what sells and what kinds of things they need that they can’t get locally. Do the same with local businesses if your interests lie in creating a business that will cater to them.

The bottom line here is do not assume anything. While a good place to start is finding a product or service you can get excited about, don’t choose based solely on that criteria. We recommend you sort out your feelings and finalize your decision based on cold, hard facts.

Conclusion

This article is just a beginning. We’re beginning to explore the concept of starting your business as a franchisee. The possibilities created by becoming a franchisee are numerous and so are the steps you must follow. There’s not enough room in one article to adequately cover the topic.

Next month, we’ll discuss how to look for the kind of franchise that will meet your needs, but until then, don’t forget we’re just a phone call away. Let’s all resolve to continue our forward progress in spite of recent events. Give us a call and let us help you continue to build your band and your dreams.

Have a great month and God bless America!

Disclaimer 
 
 

Contact Us for More Information

OUR KNOWLEDGE IS YOUR ASSET

Copyright (c) 2003.Tidewater Accounting and Business Services. All rights reserved.