Bad Economy = Good Time to Buy a Franchise? Yep, Maybe.

Unless you’ve been living under a rock, you know that the current economy is in a not-so-great condition. (We’re not going to get any more negative than that statement there. Well, except to say that you might be safer if you actually had been living under a rock, but that’s neither here nor there now…) In any case, with so many failing businesses and so many others downsizing like crazy, why on earth would we say it’s such a great time to buy into a franchise? Read on.

Getting Money: First of all, despite all the derogatory banking news you may have heard, getting a loan is not as impossible as you might believe. If you have a good credit rating, all the better—you’ll be rewarded with a decent interest rate and should have a relatively trouble-free time getting a loan. But consider that in these turbulent times, banks are looking to lend money for projects that are as close to a “sure-bet” as possible. If you went to a bank with some savings and announced that you wanted a loan to start your own sandwich shop, there’s a real possibility that the lender will only see and uphill struggle for licensing, obtaining suppliers, forming marketing plans, etc. In other words, it’s a substantial risk. However, the potential business owner who marches in with a request for a loan to open a Lenny’s Sub Shop—which is reputable and has a tried and true business formula, well, now you’ve taken some of the “can-they-do-it?” notions off the table. Simply put, it only makes sense that banks would be more willing to lend toward an established brand franchise over a mom-and-pop shop.

Getting Employees: With the recent downsizing and layoffs, the market is literally flooded with professional and/or highly educated employees. There has never been a better time to get reliable employees and your newly started business can only benefit from their years of experience. Plus, new-hires will be happy to get in on the ground floor of a new business for the opportunity to grow with the company. Not to mention that after having experienced a diss from the big-corporate world, some employees may very well be craving employment in a more intimate setting.

Getting Space: With the real estate market suffering some of the same grievances as everyone else, this is an excellent time to rent or buy business space. By many accounts, renting real estate is as low as it’s been in at least five years. And with so much space out there (let’s not forget that in many places, a building boom precipitated this real estate near-collapse) you can pretty much take your pick of the market for your best chance at success. Some builders and building owners are so eager to get renters they’ll build to suit your needs or offer greatly reduced rents up front just to get you in the door. Look for deals like this, but of course always have a lawyer on standby to comb that small print to be sure you’re not going to get hit with any surprises down the road.

There are many franchise opportunities available for those who desire to make and work for themselves. And with ample opportunity, a great pool of potential employees and premium real estate everywhere you look, there has never been a better time to take the franchising plunge! When you’re ready to discuss your options, visit with a reputable franchise representative, like Franchisecreature.com for no-pressure franchise information.

Key Word: Franchise+Investment+Optimistic

If we could choose keywords to recap our present business climate… they might include layoffs, downsize, bailout, grim outlook and recession, just to start. We’re hearing it could get worse before it gets better and boy oh boy, we’re really hitting this topic hard, but in our current economic situation is this really a good time to franchise? The answer is a resounding YES.

Did you know that more franchise businesses are born out of bleak economic times than any other? Entering the franchise field could truly be a very viable option that will allow you to take control of your finances, have job security, be your own boss and ensure financial equity for your family.

Financing is generally a chief concern. If you do not have funds readily available, focus on franchising options that offer in-house financing. Third party lending sources and SBA lenders are other very good alternatives. Here’s what you have working in your favor—when banks lend money, they are more likely to grant business loans for established, name-brand franchises than they are for personal start-up businesses. Buying into a franchise means that you’re buying into a solid reputation as well as the benefit of a tried-and-true business plan. When banks have already seen the success of those who have gone before you, they are more likely to lend, taking that as an indication of your own success down the road.

No business or franchise promises to be 100% fail-proof. If you’re sinking sizable savings into this venture and you’re not much of a gambler, select a franchise business that is service related to ensure long term, consistent business success. For example, home healthcare-type franchises offer job security. According to the AARP, 10,000 Americans turn 60 years old everyday, thereby reinforcing the need for eventual in-home care. Also, service businesses will continue to do well regardless of the economy. There will still be need for car and computer repair despite the conditions; therefore, service-based businesses are a good call. Another good option is children’s-related services including daycare, tutoring, after school programs, etc. All of these are merely examples of franchises that are as close to recession-proof as possible.

Still, there is no substitute for doing your franchise homework. Utilizing a web site that provides you with all of your options as a potential franchisee is priceless. At Franchise Creature, you’ll get matched to the businesses that are compatible with your financial and state availability. By narrowing their focus on a target list of franchise opportunities specific to your needs, Franchise Creature helps you avoid wasting your time and efforts. Franchising is a huge step, but it doesn’t have to feel like you’re walking in outer space—who wants to hang out on the final frontier alone?

Now, we’ve cleared that up. Perhaps you’ll invent some of your own keywords for the start of 2009, like optimistic, independent, financially free, fearless and bossless. (We admit we made that last word up, but doesn’t it have a nice ring to it?)

Service Business Franchises are Thriving!

Despite the current economic situation, this could be the best time ever to buy into a service business franchise. Of course when considering franchise ownership, the number one concern almost always centers around money. You’re talking startup fees, money for a building or merchandise, and then money for maintaining operations, and that can be a lot of green if you don’t have that much! It’s especially difficult to justify spending your life savings or draining your 401K in such low economic times, particularly if you’ve recently lost your job due to downsizing. If you’ve spent countless nights lying awake at night rolling all this around in your head, you’re probably best fit to take the franchise ownership plunge. And, if you’re financially limited, owning a service business might be your most practical solution.

It’s a rare person who enters into any serious business arrangement without apprehensions. Shaving some of the monetary investment off that plunge can defer some of the franchise ownership fears. In terms of service businesses, some can be bought into for a relatively low fee and little overhead. Some handyman-types of businesses can be started for under 30K. In general, more people are making do with what they have now that we’re in a full-blown recession and here’s where service business owners have the edge.

The average American who’s been impacted by the current recession is less likely to buy a new house. Still, the desire to have things nice and new doesn’t go away. Enter all facets of home remodeling, deck builders, interior decorators, etc. A homeowner wishing to have a new driveway poured might instead settle for a nice driveway revamp. Same with the person who would like a new bathtub, but would might be willing to settle for hiring someone to re-porcelain their existing one. And the list goes on. Consider that while unable to make any dramatic moves in this economy, some folks are choosing to revitalize their current property to make feasible for their existing housing situation or to make it more saleable once the economy has bounced back. This can only mean good things for the person in a service-related business.

According to nearly all new sources, Americans are making cutbacks in their everyday living all across the board. Furniture repairpersons are experiencing an upswing in business, traversing the city to repair, refurbish or just polish up existing pieces of furniture in lieu of purchasing new. We’ve even heard rumor about hotels and motels enlisting such services to compensate for the drop in room bookings. It’s a great idea, and don’t get us started on how great all this repair business it is for the environment.

Shoe cobblers are reporting an influx of new businesses as well. People are repairing shoes and zippers and clothing instead of tossing out and buying fresh. In other words it’s true—everything old is new again. According to an article in the Daily News, NY Local: As New Yorkers cut back on spending and cobble together their cash, the city's shoe repair stores are getting an unexpected boost. "It's getting better and better," said Cesar Andrade, who owns Andrade Shoe Repair in the West Village. That’s certainly music to the ears of new service business owners!

Finally, appliances and cars do not care what the state of the economy is and will always require regular maintenance and be subject to repairs. Seriously, when was the last time your toilet asked you if you could afford a world-class backup in your only bathroom, hmm? Didn’t think so.

So, maybe the recession isn’t hard on everyone, think? If you’ve always thought that business ownership would be right for you; if you have access to some level of funds for the purpose of investing; if you’ve recently been victimized by the fluctuating job market and are craving some semblance of job stability, buying into a service business franchise could be what you’re looking for.

Again—reputation, reputation, reputation—you’re buying into an existing line of work with a business plan that’s tried and true. Add that to the low overhead of operating out of your home and the knowledge that more and more people are repairing and restoring instead of buying new, and you’ve got the potential for more job stability than most Americans do right now.

When you’re ready to get more information about franchise ownership, visit FranchiseCreature.com to access hundreds of service business franchises that can be started for low fees and with low overhead, with representatives standing by to guide you through every step of the process. It’s a factual, no-pressure way to investigate your service business ownership choices.


Sources:
Daily News, NY Local, November 25, 2008: Shoe repair rises hard on heels of economy slump. http://www.nydailynews.com/ny_local/2008/11/25/2008-11-25_shoe_repair_rises_hard_on_heels_of_econo.html

Retirement: Prime Time to Buy Into a Franchise? Could Be!

It’s possible that there’s never been a better time to buy into a franchise than when you’re standing on the threshold of retirement. Call it Retirement Plan B. Here’s what I’m thinking. You’ve spent a lifetime learning your trade and cultivating your career, why not take those skills and life lessons to the next level and collect the rewards that come with owning your own business?
In today’s economy, it may be difficult to get a loan to start a business, true. However, a retiree has the benefit of having a lifetime of experience under his/her belt and the extra addition of a pension. Lenders love experience and couple experience with financial backing and the combination is a solid one-two punch.


Retirees want to stay active and involved, but at the same time desire flexibility to do the things they enjoy. An avid golfer might enjoy investing in Golf Greens Fore U, a portable putting green business. Or, how many times have we heard the wife of a newly retired husband claim that her husband’s “constant tinkering” around the house and yard is driving her up the wall? Consider becoming your town’s Mr. Handyman franchise owner. Many people who have devoted their lives to the restaurant or retail industries may want to take life for a spin on the side and try ownership and management. Financial wizards may want to try their hand at consulting. The possibilities are endless and can allow an individual to extend his or her career well into those retirement years, enjoy increased leisure activity, and at the same time reap the rewards that come with business ownership.


Boy, if we’ve said it once…buying into a franchise beats independent business ownership hands down when you’re a first-time out entrepreneur. For a franchise fee, you get the automatic backing of a solid business reputation along with a tried and true business plan, tax information, etc. If startup costs have you worried, consider that many franchises can be bought into for under $50K; even some for under $25K.


Franchise Creature is pretty much a one-stop franchise “shopping” site. One of the things we pride ourselves with most is the fact that we are low pressure, personal and always available to answer questions. You won’t be bullied into spending more than what you want to spend to make your franchise dreams a reality, and you won’t be given time limitations or ultimatums when you’re making decisions about whether or not to franchise or about franchise selection. It’s a tough economy, we understand. Visit us today online at www.franchisecreature.com, take a look around, see what catches your eye. And when you’re ready to formulate your version of Retirement Plan B, let us know!

Franchising...? In this Economy?

It is possible that the downward spiraling economy is responsible for the spike in interest in franchise ownership. With so many companies downsizing and unemployment numbers climbing, this country finds itself with a surplus of available managers, supervisors and otherwise qualified individuals.

The phrase "bulletproof job" will surely emerge on Google at the year's end as being one of the most (if not the most) searched phrases of 2008, but we know this now--nothing is truly bulletproof when it comes to jobs. Despite the typically steep upfront cash requirement for franchising, and aside of these fledgling economic times, this may very well be the best time to explore franchise ownership, believe it or not.

If we've said it once, we've said it a million times--franchise ownership is the security of owning your own business with the backing of the solid reputation of those who have gone, and succeeded, before you.

Unlike with independent business ownership, with franchise ownership you get the confidence of a good name, training and a solid business model from which to build your business to be as successful as possible.

The name of the game is research. Knowing your own personal strengths, your market and your budget are all steps to becoming a practical franchise owner. Google everything related to the franchise you have an interest in, but don't get so invested in the opinions regarding their successes (or failures) of other franchise owners that you neglect to realize a potentially great opportunity.

This is a nice corporate video put together by Molly Maid about investing in franchise ownership during these sketchy economic times. We liked it.

Confessions of a Former Independent Tanning Salon Owner.

Once upon a time, a girl in the Midwest, sick of working hard for everyone else, tired of leaving her kids at home to be raised by everyone but her, who decided to go into business for herself. Here’s her (er—my) story.

I stated the why of wanting to own my own business. This was followed by a whole series of questions regarding business ownership—everything from what type of business I desired to embark upon, to whether or not I had enough capital, to did I need (or want) business partners?

Deciding to open a tanning salon wasn’t a stretch. I was a misplaced Floridian who missed the rosy, healthy-looking glow of a sun-splashed body. One of my dearest Florida friends owned and operated her own tanning salon and hanging around her place, I got a taste of what was involved as far as licensing, costs, upkeep, employees, etc. I felt that the decision to open a tanning salon was a practical choice that wouldn’t require a ton of research on my part. I certainly didn’t want to wander blindly into business ownership. I only wish that the decisions beyond what kind of business to open had come with such great ease.

I briefly explored buying into a tanning salon franchise, but balked at the prices on those things. I remember thinking it would take me ten years to recoup my investment and I’d have to share a percentage of my profits still after that! Convinced that I could do it myself for a fraction of the cost, I ordered a tanning bed catalogue and set about planning and spending.

I used a personal savings/loan combination to open Tropical Tan North—yes, I actually went into the experience with dreams of a South someday. I rented a premium location near major businesses and a huge local college, two distinct advantages over the other tanning salons currently in local operation. I also played secret shopper to those salons to see what worked or didn’t work for their businesses. I got the proper permits and paid (through the nose) to have the place renovated to accommodate half a dozen beds to start with and for wiring to city code. None of this came cheap. In fact, I had to forgo one of my initially intended bed purchases (each one cost as much as a compact car) just to offset costs, then I had to justify this decision to my banker with whom I’d taken out the loan—bankers understand collateral, not ideas. I opened Tropical Tan North and it was wildly successful, and I closed it four years later. Here’s why:

1) I wasn’t making tons of money. Oh, I was making money, but not nearly enough given the outrageous clientele numbers we were enjoying. The salon had a great location, was always open, had the newest bulbs, the cleanest beds and the lowest cost lotions, so we had the numbers. But, for example, I barely profited off of tanning lotions, which I underestimated to be such a huge part of salon business. I’d mistakenly figured it to be “bonus” money instead of realizing that lotion was a staple to almost every tanner who entered the salon. By neglecting to realize this and seriously under-pricing the competition, I literally walked away from profit.

2) The cost of salon upkeep was insane. Because we had higher traffic than other salons, the beds were constantly in operation, which naturally spelled out the need to replace bulbs and acrylics more often, not to mention those occasional mishaps that result in bed damage. This probably wouldn’t have been such an issue had I made better pricing decisions on tanning packages and, as mentioned, the lotions.

3) I was dead-tired. In my case, superior customer service became a curse. Because our salon had become known for its courtesy, I was personally in attendance for at least 14 hours a day, every day, to deliver. I did have two part time employees, but because they weren’t enjoying competitive wages (read miniscule profit margin), I was getting sub-par reviews for their courtesy, and on occasion, I suffered profit loss through missing lotion or freebie sessions they’d “sampled” to their friends and family. I couldn’t be the only eyes/ears of the salon, couldn’t risk further shrinking my tiny profit margin, and couldn’t take it any longer. I paid my bills and closed up shop.

For four years my intended American Dream of being an independent business owner bordered an all-out nightmare. Analyzing the situation now, I can see that I had many assets: the desire, the knowledge and some cash and/or ability to get a loan. Had I invested that time, talent and money into a franchise tanning salon chain, I might still be in business today.

When you buy into a franchise, you’re buying patented knowledge. When making the decision to go independent, I seriously undervalued the benefit of guidance and tools of those who have gone before us. You see, when you’re buying into a franchise, you’re not just purchasing the rights to a name, some equipment and a business manual. You’re purchasing a wealth of experience from business pros who stand make a handsome living from, in part, your business success.

When you buy into a franchise, you’re buying into a reputation. My independent operation had a well-earned reputation that cost me only 14 hours a day, seven days a week, with minimal profit to show for it.

When you buy into a franchise, you’re buying a tried and true business plan. It works, or there would be no need for franchising whatsoever. You’re buying into pricing, scheduling, and other valuable operational information, which means you eventually stand to have some semblance of life outside of your business. As an independent owner/operator, I couldn’t even slip home to shower or read a bedtime story to my kid without fear that everything was going wacky back at the ranch.

There’s some serious benefit to the trust that comes with owning part of something bigger than you are. Not to say that you won’t still work hard or that you don’t have to have any of your own business sense to decide to buy into a franchise, there’s just no such thing. But along with the franchise price tag comes the power of a network and access to solid business knowledge, and that is priceless.

Busy Does Not Equal Profitable

My parents used to have a favorite watering hole and feed bag that served the best barbecue in the south along with beer brewed on the premises. What can I say? My pop likes his beer and 'cue.

Imagine my parents dismay when they approached the place one Saturday evening to find the doors shuttered and the lights off. "I don't understand it," my mother bemused, "the place was always so busy, how could they go out of business?"

She was partly right. The place was typically hopping on weekends, and on the occasions me and my misses accompanied them we had to wait a spell for a table. But, busy does not equal profitable. All busy means is that an establishment has a popular product that was effectively marketed to the surrounding area. That doesn't mean they are doing the most basic of economic functions -- buying low and selling high.

When purchasing a franchise, there's a good amount of research you should do before betting away your retirement and plunking down the balance of your 401K. One of the simplest things to do is visit a few of the franchise locations within driving distance and see how busy they are. It seems logical. But all this will tell you is how popular the product is, not how profitable you will be.

You still have to look into distribution agreements, leases, labor costs, franchise fees, etc. You know, the meat and potatoes of running a business. Otherwise you may end up like these guys. One of whom fell victim to the old "place is jumping" research.

And don't worry about my dad, he's already found a new place to gas up on the weekends. Instead of barbecue it's crab legs, and the microbrewery on the premises puts the other one to shame. He's a resilient man, my dad.

Franchise "Creature Feature" Writer