Immigrants are 30 percent more likely to start a business than non-immigrants and make up nearly 17 percent of all new business owners in the United States.
A Recent Gallup Survey
Only 11% of small business owners want to retire. 9 in 10 say they are happy with what they do.
79% of small business owners thought their savings would allow a comfortable lifestyle when they retire.
Small business owners have the luxury of when to retire. 40% plan to keep working as long as their health allows.
“ In other words, business owners overwhelmingly like what they do ” Gallup said.
Gallup Survey cont. The number of Americans planning to retire before age 65 has dropped from 50% in 1996 to 29% today, according to a recent Gallup survey of 1,020 adults. Meanwhile the proportion of people planning to work until after age 65 has increased steadily from 15% in 1996 to 34% this year.
Why start your own business?
Control your own financial future
More control and freedom in your life.
Build equity and profit for yourself instead of the company.
Emotional fulfillment of building your own dream.
Why Start your own Business(continued)
Build an asset to sell or pass on to family members.
Create an opportunity to work with family.
Remove threat of job loss.
Ability to write off many personal expenses.
“ Job Security” an Oxymoron?
The longer you own a successful business, the greater the security.
The longer one is employed (these days) the greater your insecurity.
If It Were Possible…
To reduce risk to an acceptable level
Find a business that is affordable
To capitalize on your skill-set
And build a business of your own
Would you seek it out?
Franchising is a HUGE business
A new franchise business opens every 8 minutes
Franchise businesses receive 40% of the retail and service dollars in the U.S. annually.
Generates 1 out of every 7 US private sector jobs
Only 1 franchise bankruptcy to every 40 independent business bankruptcies.
What is Franchising?
A continuing relationship in which a franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration. Franchising is a form of business by which the owner (franchisor) of a product, service or method obtains distribution through affiliated dealers (franchisees).
What is Franchising Cont.
In addition to a well-known brand name, buying a franchise offers many other advantages that aren't available to the entrepreneur starting a business from scratch. Perhaps the most significant is that you get a proven system of operation and training in how to use it. New franchisees can avoid a lot of the mistakes startup entrepreneurs typically make because the franchisor has already perfected daily operations through trial and error.
A new franchise business opens every 8 minutes of every
Approximately 1 out of every 12 businesses in the US is a franchise business.
In the US, only 8% of retail businesses are franchised. But that 8% makes up for over 40% of the retail sales in the US.
There is only 1 franchise bankruptcy to every 40 independent business bankruptcies in North America.
There are over 75 industries that use franchising to distribute goods and services to consumers. Franchising is responsible for 760,000 businesses, 18 million jobs, 14% of the private sector employment and over $500 billion in payroll.
95% of franchises are still in business after 5 years. The likelihood a self-launched business will still be in business after 5 years is 47%. Buying a franchise more than doubles your chance to survive as a business owner.
Franchise Types active/passive
- Single Unit Franchise
- Area Developer
- Master Franchise
Benefits of Franchising
Tested & Proven systems in place
Higher likelihood of success
Corporate image and Brand awareness
Easier to obtain financing
Marketing Exclusive territory (typically)
Recession Resilient Franchises
If you are concerned about starting a business during poor economic times, you can lower the risk by looking for businesses with certain market characteristics:
Growing markets driven by demographics
Senior Care, Residential Repairs & Cleaning
Hair Care, Automotive, Damage Restoration
Business that help other small businesses thrive
Business Coaching, Expense Analysis,
Signage, Tech Support
Recession Resistant High Growth Trends
Small Business Services
Personal & Convenience Services
Children services and Education
Cost of Franchise Businesses Total Investment Percent Under $100K 52.5% $100 to $250K 32.7% $250 to $500K 9.2% Over $500K 5.6%
Return on Investment
There is NO automatic correlation between the COST of the business and the PROFIT it can earn!!
Franchise Selection Process
Select franchises to consider
Initial phone interview with Franchisor
Receive and read FDD (transparency)
Validation calls to Franchisees
Review agreement with FRANCHISE attorney
Decision YES or NO
What is in the FDD?
FDD Sample Table of Contents
Item 1. The Franchisor and any Parents, Predecessors, and Affiliates Item 2. Business Experience Item 3. Litigation Item 4. Bankruptcy Item 5. Initial Fees Item 6. Other Fees Item 7. Estimated Initial Investment Item 8. Restrictions on Sources of Products and Services Item 9. Franchisee's Obligations Item 10. Financing Item 11. Franchisor's Assistance, Advertising, Computer Systems, and Training Item 12. Territory Item 13. Trademarks Item 14. Patents, Copyrights, and Proprietary Information Item 15. Obligation to Participate in the Actual Operation of the Franchise Business Item 16. Restrictions on What the Franchisee May Sell Item 17. Renewal, Termination, Transfer, and Dispute Resolution Item 18. Public Figures Item 19. Financial Performance Representations Item 20. Outlets and Franchisee Information Item 21. Financial Statements Item 22. Contracts Item 23. Receipts
A qualified franchise attorney should always be consulted before signing
Auto & Truck Rentals
Automotive Prod. & Svcs.
Batteries-Retail & Comm.
Check Cashing/Fin ’l Svcs.
Children ’s Services
Clothing and Shoes
Construction Mat ’ls &Svcs.
Consumer Buying Svcs
Educational Prod & Svcs.
Employment Svcs .
Golf Eqt, Prod & Svcs
Hair Salons & Services
Health Aids & Services
Hotels and Motels
Laundry & Dry Cleaning
Maid & Personal Services
Optical Aids & Services
Pest Control Services
Pet Sales/Supplies & Svcs.
Real Estate Services
Rental Eqt & Supplies
Sign Products & Services
Vitamin & Mineral Stores
Franchise Capitalization Sources
Your Financial Preparation
Determine your personal monthly overhead
Understand you will need to set aside personal living expenses to sustain yourself during ramp-up
Calculate your total start up costs including working capital to carry your business to break even
DO NOT borrow too much!
How Can A Franchise Consultant Help You?
Education & Coaching
Hundreds of pre-screened franchises.
Saves time and money.
Knows the requirements to qualify for a franchise
Goal defining. What do you want to accomplish and what franchise can help you get there?
Thinking outside the box when considering what type of franchise you should consider.
Understanding your financing options. How will you fund your new venture?
Avoiding “hype,” “short term trends,” and franchises that don’t make sense for you.
Gets you to the front of the line with the appropriate contact at the franchise of your choice.
Acts as a buffer between you and the franchisor until you are ready to make a decision.
Staying on track and following a process.
Would you like to know more?
The unemployment rate reached 9.8% in November 2010. The number of unemployed persons was 15.1 million. The number of long-term unemployed (those jobless for 27 weeks and over) was at 6.3 million and accounted for 41.9% of the unemployed.
The unemployed in the US spends 40 minutes a day looking for work and 3 hours and 20 minutes a day watching TV.
The average job search in America now lasts 33 weeks. Thirty-three weeks – more than 8 months – is the longest it has taken Americans to find work since 1948.
More jobs were lost in 2008 than were created in the last 5 years. In 2009, more jobs were lost than existed in The Great Depression.
In 2008, 67.7% of the labor force was between the ages of 25-54, and only 18.1% of the labor force population was over the age of 55.
The Bureau of Labor Statistics conducted a 20-year longitudinal study that focused on the number of jobs held and job duration among baby boomers. Among jobs started, 33% ended in less than a year, and 68% ended in fewer than 5 years. Individuals
held an average of 11 jobs from age 18 to 44, meaning