franchise, dos and donts

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    10 Main Dos andDonts When

    Buying A Franchise

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    The 10 Main Dos and Donts When Buying A Franchise

    Investing in a ranchise can be one o the most rewarding experiences or an entrepreneur, both on a personal anda proessional level. But the decision is a critical and crucial one with signicant short and long- range repercussions.o ensure that those turn out positive and successul not disappointing and nancially and personally draining ithelps to ollow a ew tried and tested guidelines.

    Here are 10 o the most important dos and donts to consider beore embarking on a ranchise adventure.

    #1) Do Something You Love

    Many measures or success exist and there are all sorts o sophisticated metrics or measuring achievements anddening or rening goals. But those who do what they love tend to be good at it, regardless o whether or not theyhave a natural proclivity or ormal training. When our job is something that we are passionate about and inspired bywe will do whatever it takes to keep it and learn to do it better each day.

    Te best situation o all and the one that is most desired is that which pairs our passion with our vocation.When HR experts conduct batteries o tests on applicants, they essentially look or the merging or conuence o two

    powerul inuences namely aptitude and passion. So when choosing a ranchise, it is important to keep in mindthat our chances or success will be exponentially increased i we are able to do something that we love and thatalso plays to our strengths, our unique skillset, and our individual personality and natural talent.

    Enthusiasm and energy are contagious, and when men and women are engaged in activities they like regardless ohow much eort they exert, their supply o vitality, zeal, and optimism tends to be constantly replenished. Te brainis a complex organ, and when we are unhappy, depressed, or lack interest in our routine activities it responds muchdierently than it does when we do that which we love and enjoy.

    When the mind is excited by a positive outlook and a job that is un to do, the physical brain actually respondsin an extraordinary ashion. Te brain produces natural chemicals known as endorphins, and grows new organic

    synaptic pathways that not only help to keep us vibrant and upbeat but also help us learn aster, solve more complexproblems, and expand out ability to see the bigger picture and grasp new concepts while identiying reshopportunities.

    #2) Do Buy Proven Profit Potential, First and Foremost

    Te number one rule in any business venture and one that should remain rst and oremost as while shoppingor a potential ranchise is that - prots rule. Regardless o what else actors into a ranchise buying decision, netprot needs to be the bottom line in terms o the ultimate prerequisite while buying a ranchise. Without protthere is no gain, only a long and potentially arduous road to nowhere. Study the ranchise careully to ensure that is

    has the ability to not just make money, but also retain prots ater all other expenses are deducted.

    Some business sellers actually bank on the act that their buyers will ail, as corrupt and immoral as that maysound. Many small businesses do ail, with large numbers o them going under within the rst year or two ooperation. Dont become one o those statistics by alling or hype or inated expectations o success. o come outahead when buying a ranchise, it is necessary to buy value that can be multiplied or repeated over time with anincreasing margin or prot.

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    o gure out whether a ranchise is worthwhile, it is absolutely essential that exhaustive due diligence research beperormed. Preerably this kind o discovery process should be conducted by a team o pros who can uncover valuesand liabilities, strengths and weakness, pros and cons.

    What to look or is not revenue, the number o transactions or customers, or the strength o market share. Toseare all essential components o the equation, no doubt, and without knowing that kind o data it may be virtuallyimpossible to ascertain the value and prot potential o any business. But regardless o how much o the market iscaptured, how many customers there are, or how many sales are made and how ast the inventory turns over, the

    real results to ocus on are prots. Prot basically means making more money that is spend, and it is oten said thatnobody ever went broke while making a prot no matter how small because prot is the key to a successulbusiness.

    Find prot in a ranchise. Ten look down the road to see i there are ways to continue preserving that prot.Next, examine the potential or those prots to grow. Soon the attractive and worthy ranchises will emerge, as thosethat are inerior and inated beyond realistic expectations will all away rom the selection process. A huge selectionwill become a short list, and casual browsing will be honed down to the nal selection o a truly golden opportunityor ranchise ownership.

    #3) Dont Go it Alone

    Enlisting the help o others is one o the keys to success in any endeavor, because none o us got where we arewithout learning rom others who could oer advice, insight, and mentoring wisdom. Asking or help can be achallenge or many people, especially those who share the rather independent spirit o the ambitious entrepreneur.But getting ahead in business means getting connected to others who can lend support and expertise, and that isespecially true when evaluating ranchises to nd one to buy.

    As we practice asking or and accepting help we also learn to delegate responsibility, evaluate the perormance othose we enlist the help o, and we learn teamwork and leadership. Tose are skills that any ranchisee needs todevelop, sharpen, and improve upon throughout an entire lietime; and the best time to start brushing up on them

    is during the preliminary phase while exploring the possibility o buying a business ranchise.

    Without a doubt, those who intelligently utilize the resources o others will have more success and longevity.Some kinds o proessional assistance are not optional, either, and those include help rom a qualied andcredentialed attorney who ocuses on ranchise law. Other lawyers will simply charge or the time it takes them toresearch the subject and come up to speed, so it is less expensive and time consuming in the long run to pay ahigher premium and hire a ranchise specialist. Others to add to a team o consultants include bankers,accountants, marketing experts, HR specialists, and when it comes time to lease or buy an ofce, showroom,or warehouse space a competent and reliable Realtor.

    Choose an especially organized and supportive ranchise and teams o expert proessionals may be included aspart o the package; however, this makes ranchising easier and typically more successul thanstarting a business rom scratch. Buying into that kind o arrangement ensures that the ranchisee gets both -customized expertise and discounted services. It may also mean enlisting proessionals o a much highercaliber than could be ound locally. Tis is just one more example o why buying into a ranchise versus doingeverything by onesel may oer distinct advantages. And it only serves to urther conrm the notion and validateand underscore the principle that we should not go it alone, because there is greater strength in numbers.

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    #4 Do Develop a Business Plan

    As the saying goes, prior planning prevents problems. A business plan oers a tangible, well-articulatedblueprint o ones overall vision, plus a breakdown o the steps and resources needed to accomplish both majorand minor goals.

    A typical business plan might include, or example, the ollowing inormation:

    Executive Summary

    IntroductionBusiness Model Highlights / Unique OpportunitiesProducts and ServicesGrowth StrategyFinancial Summary

    Organizational Overview

    Mission Statement / PhilosophyPrimary ObjectivesKeys to SuccessOrganizational StructureCapital RequirementsHistorical Background / rack Record

    Products and Services

    Detailed DescriptionDelivery SystemMeasures o Success / Quality ControlsMilestones and Metrics

    Market Analysis

    Market Analysis and Needarget Market DemographicsProspects or the FutureGoodwill / BrandingResell Market or the Franchise

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    Strategy and Implementation

    Primary GoalsMarketing StrategyRevenue StrategyProt Projections

    Management and Personnel

    Organizational StructureManagement eamPersonnelraining and Education

    Risk Assessment and Financial Planning

    Financial GoalsAssetsStatement o ActivityStatement o Financial PositionCash FlowFranchise Fees / Revenue Sharing

    In other words, a comprehensive business plan will include lots o data that can be shown to others includingranchisees, bankers, and potential investors so that they can oer input, suggestions, and predictions regardingwhether the ranchise in question can ulll the plan. Spend the time to create one because sometimes the processo putting the plan on paper becomes the most eective and revealing way to analyze a business, clariy goals, andanswer questions that might not otherwise even be asked.

    #5) Dont Buy Sight Unseen

    Visit a ranchise in the system to get a eel or how it operates both rom the perspective o an investor and as acustomer. Arrange to have a guided tour o a typical location or better yet, visit an older site, a brand newlocation, plus one that represents the average store or ofce. Noticing consistency or inconsistency across thesedierent branches will oer a clear idea o whether or not the entire ranchise delivers a unied brand identiy andconstant level o customer service.

    For service-based ranchises, you can talk to actual ranchisees. Be respectul o their time and pick a good,mutually-benecial time to ask them why they went into business.

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    o get a air assessment, ask the ollowing ve questions:

    1. What do you like most and what do you like least about your ranchise?

    2. How extensive and intensive is the initial training program?

    3. How is the ongoing support? In other words, what does the ranchise do or you AFER theyve awardedyou their ranchise?

    4. Are you meeting your nancial goals? I so, what are you doing right? I not, what could you be doing better

    And nally

    5. Knowing what you know today, i you had to do this all over again, would you still pick the same ranchise?

    #6) Do Get Everything in Writing

    As with any major purchase, it is important to get everything in writing so that there are no misunderstandingsor miscommunications. O course getting everything in writing means one thing to the average layperson andquite another thing to an attorney, so it is important to ollow the guidance o a lawyer well versed in ranchiseagreements when taking care o this important task.

    Attention to detail is critical, and so is clear understanding, so do not hesitate to ask questions. I answers are toocomplicated to comprehend it is not time to stop asking or clarication, but rather it is time or those giving theanswers to gure out a better and more comprehensible way to explain things or your edication.

    Many commitments and promises may be made outside o the ofcial ranchise agreement, and it is important todocument as many o those casual conversations as possible by taking notes. Later, with the help o an attorney, key

    points can be inserted into the nal agreement as an addendum, ootnote, or by elaborating on the details in legallanguage that both agree upon and sign o on as part o the deal.

    #7) Dont Forget to Anticipate Resell Value

    In the excitement o buying a business, it is important to remember to look toward the uture. As the Swedishproverb says, the morning never knows what the aternoon has in store. Even i the uture o a ranchise is bright,it still may be a good idea to sell it. In act, i the outlook or a ranchise is outstanding, that may be the mostcompelling reason to put it on the market and the best time to convert the business into a protable sale whiledemand is high.

    Beore buying any investment, one smart piece o advice is to sit down rst and gure out how to liquidate it.Knowing how to get out o an investment helps to gure out what the investment is worth, because it puts thebuyer into the shoes o another buyer who may have a more critical eye. Changing the point o view can be abrilliant way to see a situation rom a dierent angle and can help one think outside the box in an inormativeand innovative way. And i it is possible to sell an investment at a break-even point the day ater purchase, it is most

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    likely a solid and worthwhile investment.

    Figuring out that it is possible to buy and then sell a ranchise or a prot makes it even more attractive, and thatis part o the process when anticipating resell value and coming up with a reasonable exit strategy. Even i the plan isonly a theoretical one to help organize ones investment approach, it can be an intelligent exercise o businessimagination.

    Te best ranchises not only produce revenue and prot rom ordinary operations, but they also add equity by

    growing in value over time. Purchase a dynamic ranchise with strong growth potential and the rewards willmultiply, oering more than one way to get a strong return on ones original investment. o see this potential, studythe ranchises potential resell value beore buying into it in the rst place.

    #8) Dont Discount the Power of Dreams

    Many people are araid o success, because it represents the unknown, and that is perectly understandable especially or those who have always worked or somebody else and have never shouldered the responsibility osel-employment. But by ollowing the kinds o steps outlined above, those ears which are sometimes a valuablemechanism to protect us rom danger and errors in judgement should be systematically alleviated. What remains

    is a vision o possibility, and when the potential to ulll a dream presents itsel, it is important to recognize it, acton it, and seize the day beore the chance evaporates or somebody buys it out rom under us.

    Buying into a business as a ranchisee should be more than a mere business deal because, as previously explained,it is important to nd a ranchise that inspires passion, interest, and the ability to make a living while doing what welove. Having eliminated those ranchises that dont make the grade or pass muster, it is time to stop procrastinatingand step up to the plate it is time to reward onesel with action that transorms imagination and dreaming into real-ity and tangible act.

    #9) Do Consult Family and Friends

    Beore signing on the dotted line it is necessary to ensure the support o amily members and other importantpeople, because running a ranchise will have a powerul inuence and eect on other acets o ones lie. Especiallyor those who have never beore gone into business or themselves, the support o signicant others is vital and canpromote a more healthy and successul transition during this change o career.

    Owning a retail business, or example, can mean a commitment to work while others are taking time away romwork. Weekends and holidays are typically the most protable days or stores and restaurants, or instance, but thosewho own and operate those businesses may have to sacrice time with their own amilies to make them prosper.

    O course the smartest business owners learn to set up their ranchises so that they operate smoothly even in theirabsence. Tat way they can enjoy the richest rewards o sel-employment without stressing over whether or not thebusiness will stumble or suer i they are not physically present.

    #10) Do Listen to Instinct and Dont Ignore Intuition

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    Just as it is important and healthy to consult amily members and other loved ones beore entering into the worldo ranchise ownership, it is also necessary to trust ones own instincts and intuitions. I something doesnt eel rightthen that may be a red ag or a signal that more investigation and research is necessary.

    By the same token, i something is exciting and satisying at the gut level, that can be a strong indication o align-ment in a variety o positive ways that are psychological, emotional, and spiritual.

    ake ime to Reect on Ones Achievements

    Having shopped careully, applied due diligence to erret out hidden pitalls and potential bonuses, consulted theexperts, and gained a personal insight into the business with key support rom others, it is possible to invest withcondence.

    Buying a ranchise is an investment in ones happiness, job satisaction, and nancial uture, so once the proper stepshave been taken and the selection process has been nalized, it is also important to celebrate ones hard work andaccomplishments.

    Not everyone is cut out or ranchise ownership, but those who are can count themselves among the most ortunatepeople in the entire business world.

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    Who isActionCOACH?ActionCOACH is the worlds number 1 business coaching ran

    that traces its beginning back to a small room in a suburb o BriAustralia, where Brad Sugars began developing a series o seminaworkshops to help small business owners grow their businesses. Twas in 1993. Since then, the business has burgeoned into one oastest growing ranchises in the world, with more than 1,000 bu

    coaches operating in 26 countries.

    Heres why were

    ActionCOACH is currently rankhas been so or the past ve years)#1 Business Coaching Franchise in

    World by Entrepreneur Magazine. In 2008, Entrepreneur Magalso ranked ActionCOACH #76 in the Franchise 500, #46 FaGrowing Franchise, #17 op Homebased Franchise and #49 Aop Global Franchise.

    ActionCOACH was also named a Finalist in the

    prestigious 2005 Stevie International Business AwarBest Overall Company category, winning in 2006 asBest International Business and Best U.S. Company

    2007. Te Stevie Awards are the Worlds Premier Business Awaand recognize the accomplishments and positive contributionscompanies.

    In 2008, ActionCOACH made the op Franchises in the Franchisee Satisaction Aconducted by the Franchise Business Revie

    Out o the nearly 250 companies entered, representing over 45ranchisees around the globe, ActionCOACH was ranked #41

    ActionCOACH was the winner o the prestig2005 Franchise o the Year Award in Ireland.Te award is presented to the company that hademonstrated outstanding growth and develop

    in the service sector o the ranchise industry. Winning the Frano the Year Award is a major achievement or a company that waintroduced to Ireland just three years prior.

    In 2006,ActionCOACH was awaUK Franchise Provider o the Year bBusiness Britain magazine. Te awa

    which is the rst ever to be made by Business Britain, was prestoActionCOACH ater a panel o journalists and managers romagazine judged it to have excelled across a wide range o criteincluding reputation, ranchise return on investment, prot gr

    potential, and quality o ranchisee support.

    ActionCOACH was named winner o the RisiStar Award in the 2006 Queensland 400 (Q400

    Australia. Te Q400 provides public recognition or the contrio local business heroes by highlighting achievements in its ofQ400 book.

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