Archive for the ‘Business Plan’ Category
Franchisee Beware – The Drawbacks of Franchise Ownership
The buying and selling of franchises has boomed in recent years with becoming a franchisee the ever popular short-cut into being your own boss.
A franchise is simply a contract with an established firm, the franchisor, who has a well-branded product or service. This franchisor charges a fee to allow a business to operate under their name and sell their product. There will usually be restrictions applied and a franchisee will be expected to operate under the franchisor’s guidelines.
Depending on the franchise you are looking to purchase there will potentially be a high financial cost involved. No franchise is completely free, but if you want to be involved with a big brand you could be paying in excess of 100 grand just to be allowed to trade under their name. Although some franchisors include training and guidance with the package, this does of course mean that you are completely under-the-thumb of the governing company and your freedom to original thought is very much curtailed.
As well as the initial fee, some franchisors will charge a regular ‘management’ rate levied on your turnover, they are in essence taking a cut of everything you make. Percentages differ but expect anything up to 15% per annum. So becoming a franchisee is not necessarily the cheap route into business.
Franchisees do not escape the requirements of other types of business owners either, you will not only need to budget for running your franchise like any other business, but your franchisor may insist on you proving you have a certain figure before agreeing to grant you the franchise and could demand that your premises be equipped in a certain way in order to sell their product; all of this can make your business budget a little less flexible than it would be if you were trading differently.
You will also be bound by your geography; most franchisors, especially in the professional service industry, will strictly restrict where you can trade and/or market your services as they will usually have sold franchises for neighbouring areas to other franchisees. This type of restriction can cause major difficulties in times of economic downturn, when a business would usually start looking farther afield for custom.
If you are expecting to be your own boss, do remember that buying a franchise will usually come with a large amount of trading and administrative restrictions that you will be bound by; it is often more like working for a large corporation that being a true business owner and can result in plenty of frustration for someone new to business.
If you are determined that becoming a franchisee is the right option for you then do be certain to weigh-up the relative value very carefully, your outlay and the fees you pay must be backed-up by the worth of the brand.
Finally before committing to buy your chosen franchise digest the Ts & Cs extremely thoroughly and confirm to yourself that you are happy to work within the rules set out by the franchisor.
Tips When Opening a Shop for Your Business – Initial Planning Stages
Accountants in Manchester – Small Business Planning
Opening a shop is a thrilling, stressful time in the life of a business. You may dream of customers lined up inside a shop with a beautiful layout and fancy décor. The reality, however, can be much different. It takes a lot of blood, sweat, and tears to get a shop off the ground. Much of that work goes on before the first piece of stock goes on the shelf. A few tips when opening a shop for your business should help ease at least a little of the stress and anxiety.
There are primarily three tips when opening a shop for your business that you should consider during the initial planning stages. These tips address the questions of whether to lease or buy the type and amount of insurance your business will need, and the utilities you will require. Each of these forms the basis for planning the financial aspects of opening a shop. Tip one concerns the question of whether to buy or lease. If your business is new, your best bet is going to be a commercially leased space. A lease requires less capital and less commitment for a new business.
The second of these tips when opening a shop for your business centres on insurance. What insurance you may or may not need depends greatly on the type of business you intend to open. If the general public is likely to come into your shop, you must have liability insurance to cover any possible accidents. Additionally, if you lease commercial property, the property owner will require a certificate of insurance. This document shows the property owner what coverage you have and the amounts for which you are insured. Most commercial leases state insurance requirements for tenants.
Finally, the third of these tips when opening a shop for your business involves your utilities. It is highly recommended that you carefully consider all utility needs, not just electric and gas. Do you require an Internet connection? Does your shop have toilet facilities, and if so, are water charges included in the lease? Many services now “bundle” these utilities for the customer’s convenience. Phone, Internet, and satellite services can be combined, as can gas and electricity. Bundle services where possible to save money and simplify expenses.
I have only considered a few tips here, but there are many other issues that you will need to take into account when you have decided to open up a shop. One thing that would be a good idea, like everything else you undertake in business, is get the help of professionals when you need it.
Six Steps to Avoiding a Failed Business Plan
If you have worked hard to prepare a great business plan make it work hard for you in return with these six steps to avoiding silly mistakes.
1: Death of a Plan
All of your careful planning and analysis will come to nothing, if you work hard on your ‘business plan’ in order to present it to your bank manager for instance and then take it home and file it under ‘F’ for ‘forgotten’. Only by up-dating your plan regularly and reassessing its contents can you prevent it from becoming obsolete.
2: Be Realistic
Far too many businesses let over-optimism skew predicted sales or turn-over and focus only on the strengths and opportunities during their SWOT analysis, rather than truly considering all of the Threats and Weaknesses too. It is important to be honest with yourself and keep a check on over-optimistic predictions.
3: Remember your Competitors
A common planning error often made is that of ignoring any competition; making a careful study of your competitors will allow you to adjust your strategies according to any new initiatives they may have. This is another important reason to review the plan regularly.
4: Smarter not Harder
If your business plan relies too heavily on ‘new’ proposals, consider first if what is actually needed is a better way of executing the existing strategies.
5: Assess all Risk
It is vital to accept the potential for failure and not to ignore the risk involved; your business plan should thoroughly examine the risk and should take into account the cost of any failure.
6: Vane or Sane?
Turnover is vanity, but profit is sanity? Any planned expansion of your business should result in increased profit not just a higher turnover; your business plan should have taken into account all extra recourses needed for development.
A successful business plan means a winning strategy for your business, and it is only through such a strong approach that you can move forward into a successful business future. Ask Accountants in Manchester for assistance if you want a professional opinion of your business plan.