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Time To Startup!
Inspiration and Information for Starting Your Business

Archive for June, 2009

Five Questions to Ask Before You Franchise Your Small Business

Posted on June 25th, 2009 by kkobelski
Category: Business Inspiration, Business Plans, Form My Business, Franchise, Franchise Consultant, Launch My Business

Last month, I wrote a post helping small business owners who were considering whether or not to buy into an existing franchise.  Today, I’d like to address this issue from an alternate angle, namely, "When is it time to transform your small business into a franchise?"

The inspiration for this post comes courtesy of Jacqueline Taylor at the Houston Chronicle, who wrote "Before You Franchise, Research" in response to a question posed from a local sandwich shop owner who asked, "How hard is it to franchise a business?"

Courtesy of Taylor’s article, below, find five questions you should ask yourself before deciding whether to become a franchisor:

  1. Do you prefer the business or operations end of your company?
    To succeed as a franchise, a business requires at least one team member who can commit to focusing solely on the business end of franchise development and take themselves out of everyday operations.  Think about this question.  If you love nothing more than working in your shop and seeing your customers each day, it can be a surprisingly difficult transition to move completely behind the scenes.
  2. Can your idea be duplicated?
    There is a fine line between a business that stands out and a business that cannot be duplicated.

    If you feel that your business cannot be effectively reproduced, it can be difficult to stand by the quality of ensuing franchises.  Anything less than the quality you exhibit in your own shop could, at minimum lead to an unsuccessful franchise or at maximum cause damage to your brand.

  3. Can you afford it?
    Top franchise consultants, detailed by Taylor, estimate business owners will spend between $50-200K before seeing any franchise royalties.  As rewarding a journey as starting a franchise can be, be prepared for a journey that may go on for some time before you find your treasure.
  4. Can your business support franchisees?
    Are you confident that your business idea can support multiple locations and franchises?  Similar to the answer provided in question 2, franchises that do not perform and shutter can be as damaging to your brand as franchises that do not perform well.
  5. Do you understand the legal requirements?
    Starting a business can be complicated.  Launching a franchise is extremely intricate.  Prepare to hire a lawyer who specializes in franchise agreements and to spend hours pouring over paperwork to ensure nothing falls between the cracks.

All this being said, a franchise delivers equal opportunity along with its challenges.  Business owners who are successful at becoming franchisors add to their income by receiving a piece of each ensuing location that develops.  There is also the personal reward of experiencing a business you created from the ground up grow to expand, potentially, to the world over.

As with any other business plan, the key is to ask yourself the tough questions designed to define your success in advance.

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Start A Small Business & Help Our Nation’s Recovery

Posted on June 17th, 2009 by kkobelski
Category: Business Inspiration, Business Plans, Cash Flow, Financial Services, Finding Money to Start a Business, Launch My Business, Small Business

Last month, President Obama announced that $730 million of his stimulus package will be dedicated to making it easier for budding entrepreneurs to start a small business.

What this means for you, if you are one of the many preparing to start a small business, is that it will be much easier to get started.

Small businesses create jobs.  According to a recent New York Times article, over the last ten years, they have accounted for nearly 70 percent of new job growth.  Because of strong numbers like these, small business start-ups are a vital component of our economic recovery.

Because President Obama and his staff understand the importance of small businesses, they now make it much easier for you to acquire the all-important capital you need to get started.

Robert Steere of Business Owner’s Toolkit recently detailed how much of this small business capital will be in the form of tax reduction provisions of the stimulus package.  These provisions include, but are not limited to:

  • Reduced Estimated Tax Payments: The new stimulus package temporarily reduces the estimated tax payments required of small businesses during 2009. This means that less needs to be paid to the IRS during the year, serving as a modest cash flow benefit.
  • Delayed Recognition of Income from Cancellation of Debt: Small businesses are now allowed to defer recognition of income for certain types of business debt cancellation. If your business has income from cancellation of debt, you may be able to defer the tax consequences for several years.
  • Increased Exclusion of Gain on the Sale of Qualified Small Business Stock: To encourage individual investors to purchase the stock of small businesses, the stimulus package upped the portion of the gain excluded from income on certain sales of small business stock to 75 percent, rather than 50 percent of the gain.

Bill Sheridan at CPA Success, welcomes President Obama’s announcement with the proclamation of “It’s about time.”

“With more than half of U.S. workers employed by small businesses, it’s appropriate that the government’s recovery efforts included something along these lines,” Sheridan states.

Essentially, starting a small business will not only create a livelihood for you as an entrepreneur, but for the workforce you hire.

As I had stated in a previous post, even in times of economic uncertainty it is still possible to start a small business, provided what you have to offer is of value.

With President Obama’s stimulus plan, our economic future appears to have a light at the end of a tunnel.  To finally make our way through this tunnel, it’s up to any entrepreneur who has that next great idea to start a small business in support of their dream – and in so doing – help to rescue our economy.

Are you that next entrepreneur?

Find out for sure with additional resources regarding how Obama’s stimulus package will help you start a small business available on Business Owner’s Toolkit:

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A New Store Made for Small Businesses

Posted on June 10th, 2009 by knathan
Category: Business Inspiration, Marketing, Promote My Business

While there is no shortage of business books from which business owners can choose as they try to navigate the ever changing path of business ownership, there is a set of books from Toolkit Media Group that attack both the broad and more focused elements of having a business.

The book Start Run & Grow a Successful Small Business is about as comprehensive as books come. The book discusses everything from whether you’re ready to be an entrepreneur to marketing to managing your finances and human resources issues.

There are also books on more specific topics, such as Win Government Contracts for Your Small Business. Trying to understand the process for applying for government contracts? This book breaks a prospect, which seems daunting to many, into 10 easy-to-understand steps.

Given the current economic situation, the books Find and Keep Customers for Your Small Business and Small Business Financing: How and Where to Get It can help you look for additional funding sources for your business and think even more creatively about how to bring new customers to your door.

The books from the Toolkit Media Group are now available in the new Business Owner’s Toolkit™ Store. There are eight titles currently available. Be sure to check them out. No matter what type of business you have or are considering starting, Toolkit.com and the Toolkit Media Group books are fantastic resources.

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Should You Use Your Home’s Equity to Fund Your Business?

Posted on June 2nd, 2009 by Heather
Category: Cash Flow, Equity Loans, Finding Money to Start a Business, Lines of Credit

If you’ve been having trouble getting a traditional business loan from a bank, you’re not alone. Many entrepreneurs and small business owners are finding it harder to come by money than it would have been even just two or three years ago. The natural reaction is to cast a wider net; and that’s where the home equity question arises.

Should I or shouldn’t I? Many small business owners are leery about mixing their business with their personal, especially if you’ve incorporated in order to avoid those exact dangers. BTW – Always check with your lawyer or a CPA to make sure the way you go about moving the money within those lines is ok.

But, if done properly and responsibly, using the equity in your home can be a good way to get money for your business.

Home equity loans and home equity lines of credit use the equity in your house as collateral to secure a certain loan amount. This is generally a pretty low risk venture for a bank, so it can sometimes result in lower interest rates and a fairly quick turn around time from application to closing.

Don’t assume the bank will just give you whatever part of your equity you’d like. They have strict debt-to-income ratios that will be followed. So even if you have $40,000 in equity in your house, you may only be able to get a loan for $20,000.

And, keep in mind with the fluctuating housing market, what was once $40,000 in equity last year may only come out to be $15,000 in equity in today’s market appraisal. So don’t count on home equity as a primary source of money that you can use for day to day business expenses.

Using your home’s equity could be just the thing to finance a big marketing campaign, hire a sub-contractor you’ve needed for a specific project, or bridge a gap in-between sources of other funding.

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