Since beginning my internet marketing business, I’ve spoken to and dealt with a few former franchise owners… none of whom had anything particularly positive to say about franchising. In particular, I’ve discussed the subject extensively with my current personal mentor (one of the current top internet marketers in the world… yes officially… it is ranked). This is a guy who lost two franchise stores and went USD $500 000 into debt soon after the recession began. The following article will discuss some of the major cons involved with franchising.

First and foremost, investing in a brand-name franchise is going to set you back somewhere in the hundreds of thousands of dollars. Now I understand that you’re investing in a potentially lucrative business, however, this is quite a massive sum of money to be investing in something with such an uncertain future. Why did my mentor fall $500 000 into debt? Well, the economy took a turn for the worse, and his franchises went with it. This was only a few short months after making his initial investment, and there simply wasn’t anything he could do to keep the business afloat… the economy was bad and people were spending less and saving their money. Many other franchisees and small business owners were forced to sell their businesses soon after the economy went down the tubes.

Now if you do get your franchise up and running, it’s certainly not the cakewalk many people believe it to be. Yes there are company systems in place to facilitate the running of the business, and a brand name will help you attract extra customers… but that doesn’t mean you can simply “plug in” to the system and let it run for you… there’s still going to be quite a bit of hard work involved. Franchises are definitely NOT “get rich quick” opportunities, and are by no means a guarantee of success, no matter how well-known the franchise you may be buying into.

Moreover, the hassle of dealing with employees exists. Who do you generally see working in franchise stores? That’s right… teenagers… most of whom like to fool around on the job, and don’t care which way business goes… good or bad.

Lastly, if you’re looking at buying into a franchise, it’s likely you’re looking to be your own boss. While as a franchisee you may not have to answer directly to anyone, you’re far from being able to fully-control the business. Simple rules such as wages, hours of operation, suppliers (you’re generally relegated to buying from the franchisor… no shopping around for cheaper and better deals), and so on, are out of your control. This system which helps you run the business is also going to greatly limit your flexibility as a business owner.

This article is not to say that every franchise is bound to be a failure, or that they’re impossible to run, just that they are simply not the sure-fire way to success many people think they are. Other, simpler, options do exist in the form of self-owned businesses. Online home-based businesses can be one incredibly lucrative option… an essentially recession-proof option without the requirement of a massive investment, employees, and overhead. Do your due diligence however and search out a legitimate home-based business as there are quite a few scams out there today.

Matt Mossop is a succesful internet marketer and home based business owner. To learn more about Matt and how he can help you, visit MattMossop.com.

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The above statistics indicates that franchise owners are having a difficult time getting their ventures to succeed in these difficult financial times.  Everyone certainly understands the difficulty in getting a new small business to succeed and meet their financial obligations.

So, what can franchise business owners learn from the above statistics regarding recent SBA loan default rates? What are the factors that seemingly contribute toward the high default rates?  Well, a review of the statistics seems to reveal several basic factors that affect this.

First, those franchises that focused on serving the affluent customers have a more difficult time during these tough financial conditions.  As families face lower income levels, they begin to cut back on those good and services offered by franchise businesses that can be considered luxuries.  Cleaning services, laundry services and lawn services may fall into those categories.

Secondly franchises that are in an already crowded market face the prospect of stiff competition and as number of customers for that good or service fall even slightly, marginal businesses suffer immediate consequences.  As an example there are a lot of pizza restaurants both independent and franchise operators.  As families conserve cash and start to cook at home more often, they cut back on ordering pizza.  This affects all smaller and newer operators and those with lower financial capital. 

Third factor that affect franchise businesses is the business model of the franchise business.  It is crucial to have a solid business model that works even in a difficult financial environment.  If the business model is marginal to begin with and depends a lot on the operator’s talent and experience, then this environment will put you to the test.  As an example opening fruit juice and cold drink stores in colder climates in winter does not make sense.

So what should a franchisor do in this environment?  It is crucial for franchisors to maintain their current base of operators and expand their base cautiously.  Nothing is more valuable to a franchisor than a demonstrable track record of success as evidenced by their customer base.  A large number of failures and defaults does not inspire confidence in a potential franchise opportunity seeker.  There are several things the franchisor can and should do.  Speak to your customer base regularly and poll them on their market situations.  Provide advise and counseling where appropriate and direct them to financial resources when needed.  When selecting new franchise owners, have a higher standard, for financial and capital requirements, so they can withstand the market forces longer.  Make sure to provide adequate training in operations so they are more successful in operating their business. 

BuyTradeBiz.Com is internets newest business for sale and franchises for sale listing website. 

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Within most MLM companies, business sells us the franchise and we can achieve of it whatsoever we be keen on. There is little to no entrance cost plus many catch benefit of the company’s products distributor cost which is typically between 10 to 30 percent below retail; depending on the company.

What is amazing regarding this enterprise model is that business has no be in charge of on how some IBO runs their venture, they do not suppose of any company owner to stash supply or how to deliver and enlist; the development of every individual MLM is lock, stock and barrel up to the enterprise owner. Just akin to whichever supplementary business, the MLM model requires time, as well as capital for it to develop, like a plant wants water, dirt in addition to sunlight. The point I am trying to compose is that the success of every person is exactly correlated to their labors and personal progression. Amway is a vital faithfulness that requires commitment and determination to thrive. have a look at how I get truck loads of people for my business http://andregirouard.magneticsponsori…

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Franchise opportunities provide the best of both worlds for aspiring entrepreneurs as they give you the freedom and independence to operate your own business while also having the backing and support of a major organization. For ambitious business owners, franchises can offer a great way to realize a stable income with fantastic opportunity for expansion and expansion.

While conventional sources like bank loans might not be a perfect option for franchise owners, there are some great paths to ensure effective financing of your new franchise that still gives you control over everyday operations.
Company Initiatives
Many times, you can fund a new start up with a minimal deposit and reasonable financing rates from the corporation’s central office. These rates are generally reasonable relative to the conditions placed by external lenders, and have built-in flexibility to permit you to begin to pay off the principal based mostly on the return of your new business. With an integral lending and training program, expanding firms work with potential franchisees to offer inexpensive options for new franchise openings, as well as providing low-interest loans for expansion into new territories.

Many Franchises will have credit links with specific banks. Profran Consultants provides non traditional funding through private placement offerings.
An Angel From Heaven
Another option that many potential franchise owners turn to is angel funding, which is early stage capital from financiers, friends and family for partial ownership. If purchasing a franchise directly is out of your reach, then it could be a choice to work with many business partners to build up your capital base.

Ensure that you’re employed well with your business partners as their input will be valuable as minority owners in the new business. In addition to gaining critical access to new working capital, your business partners can provide ideas, connections and other valuable assets for your company. Especially if you are a first-time business owner, working with experienced business pros as minority partners can help accelerate your learning curve in the act.

Being Creative
Putting in the hard work to save up enough to finance the new venture can provide a cheap way to get better results from your business, as well as impressing the necessary discipline in your organisation from the very top.

Look at franchise opportunities that require limited start up costs, such as service affiliations or online, so you can offer as much self-financing for the new undertaking as practicable. While it’s likely that you will have to resort to external funding at first, try and restrict your borrowing for the essentials so that you create a sustainable balance sheet going forward.
Master Stroke

When I was having a look at traditional franchises I was looking at $15000 – $25000 investment but the fact is the best franchises do not have to be costly. People only think of standard expensive price franchises, but the truth is there are some amazingly strong online franchise opportunities which you can join with minimal investment and therefore minimal financing.

Think laterally about the financing opportunities to be had and you will simply be in a position to finance entry into an effective franchise terribly easily.

Profran Consultants offering the ultimate in a franchise opportunity. The business is Skadoit. This is a must for anyone attempting to find an inhome franchise business.
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Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

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And the first key decision you have to make is choosing the right commercial cleaning franchise.

Some franchises promise high return on investment, while others promise full advertising support. While these factors are definitely very important they are not so powerful in isolation. You have to look for a franchise that offers you ‘the full package’ before you can make your decision.

Here are the key success factors you need to pay attention to that will help you make a success of any commercial cleaning franchise.

1. The Overall Reputation of the Cleaning Business.

This makes a lot of common sense. If the franchise has a good reputation with its existing customers, you will have a much easier time getting clients of your own in your area.

You can use client testimonials and referrals to help you get started, then form your own loyal client base to keep bringing in new clients.

2. Business Development Support.

It’s important that the franchise owner gives you 100% support to ensure that your business will have long-term success. Business development support includes: training and seminars, giving advice on which locations are best for you to set up your business in, and comprehensive market research statistics.

3. Marketing Support – Expertise and Materials.

Successful franchise owners provide adequate advertising support to franchisees. You should look to be getting pre-defined marketing materials for all necessary mediums – online and offline. These marketing materials should have been tried and tested ready for you to just customise and use straight away.

This minimizes your risk of spending a lot of money on working out what marketing works in your area and what doesn’t.

4. Detailed and Tested Business Processes.

This is critical! If you are looking to buy a commercial cleanining franchise, you must make sure you are getting good usable processes with the business package. These are the things that will enable you to “hit the ground running”.

Processes create a fail-safe environment, and allow you to get on with the more important things in your new business – like getting clients – as opposed to having to worry about teaching your employees the correct way to clean a kitchen…

5. Business Goals Alignment.

You and the franchise owner should work towards achieving a common business goal. Remember, it’s ultimately a joint venture – both of you have high stakes on it.

Look for a franchise owner who immediately conveys his long-term plans with you. This means that the franchise owner is not looking for a ‘quick buck’, but is rather confident about the long-term success of the business.

6. Customer Support.

Although customer support is often overlooked, it is one of the critical elements in choosing the best commercial cleaning franchise.

Does the customer support immediately respond to your queries? Does the customer support attend to your needs? Since customer support is essential to this type of business, the franchiser should set an example.

Having your own commercial cleaning franchise requires hard work, motivation and determination. In return though, you’ll get financial freedom and the opportunity to create your own future, as opposed to working for someone and relying on their ‘good grace’.

If you spend good time preparing and researching the different aspects of owning a business, you should increase your chances of success.

Jeremy Gray is a successful entrepreneur and a commercial cleaning business owner. He also owns and maintains CleaningBusinessSecrets.com, an indispensable resource for anyone looking for information about a commercial cleaning franchise.

Article Source:http://www.articlesbase.com/franchise-articles/key-success-factors-for-starting-your-own-commercial-cleaning-franchise-1305381.html

Buying into a franchise can be a very lucrative investment. However, as a franchisee your success is far from guaranteed. Company-placed systems are designed to help facilitate business operations, however they do not, by any means, make running a franchise easy. The following article will discuss the 5 major myths involved with franchising, and will reveal what you will be up against if you decide to open your own franchise.

Myth 1: Running a Franchise is Easy

There is no business opportunity in existence which isn’t going to take some hard work and effort to run successfully… and franchising is no different. Franchises have “automated” systems in place to facilitate the running of the business… a feature which attracts many to-be business owners because the hassle and uncertainty of figuring out how to run their own business is taken care of. While franchises do have a slightly higher success rate than independent small businesses, you cannot simply “plug-in” to the system and have the business run on its own. As in any business venture, there is simply no replacement for good hard work. If you’re looking for a “get rich quick” opportunity, look elsewhere.

Myth 2: Franchises are Safe Investments

Many franchise owners are recently out of business due to the horrible state of the economy… and I’m sure they would tell you otherwise. In franchising, as with any business venture, there is a degree of risk and uncertainty which comes with investing. The state of the economy is out of your control… if it starts going downhill, there’s nothing you can do about it. Moreover, once their business is up and running, many franchisees discover that running a franchise is not the calk-walk they thought it would be. Well… if you find out that you don’t have the drive, motivation, or skills it’s going to take to be successful, you’re out an investment likely somewhere in the hundreds of thousands of dollars.

Myth 3: A Popular Franchise is Guaranteed to be Profitable

You can’t actually see the ledger of any franchise you’re walking past, so you really have no idea how well-off that franchise owner may be. Just because you own a McDonald’s or Subway doesn’t mean automatic profits. A well-recognized name may help to bring in some customers, but you’re still going to need to have the right skill set to run a particular franchise. Additionally, proper management, advertising, and hard work will play a large role in your success or failure.

Myth 4: Buying into a Franchise is Cheaper than Starting Your Own Business

When setting up your own independent business, you are responsible for equipment, furniture, legal and consultation fees, licensing fees, internet and phone connections, taxes, etc, and of course… a location. While these are mostly taken care of when buying into a franchise, what you will pay for is the recognition of a brand name, and that company system with a proven business model… this will often set you back a few hundred thousand dollars.

Myth 5: As a Franchisee You’re Your Own Boss

As a franchisee you may not have a boss you have to answer to directly, however, you may not be provided with the total freedom you’re seeking as an entrepreneur. Variables such as wages, hours of operation, suppliers (no searching around for a better or cheaper deal… you have to purchase from your franchisor) will likely be out of your control… you are restricted to the freedoms the company system allows you.

As my opening sentence states, franchises can of course be very lucrative investments. This article is not to state otherwise… it is simply to state that they are not the cake-walk, or guaranteed ticket to success many people believe them to be. So if you decide to buy into a franchise, be sure you’re ready for what’s to come.

Matt Mossop is a succesful internet marketer and home based business owner. To learn more about Matt and how he can help you, visit MattMossop.com.

Article Source:http://www.articlesbase.com/franchise-articles/the-5-major-myths-of-franchising-1305762.html