THE KYROS INSIDER -|- 20 OCTOBER 2008 -|- 001

In the KYROS Weblog

SO YOU WANT TO START A BUSINESS?

Whether you have been planning your new business for months, have been made redundant, or you simply made a sudden decision to go it alone, becoming your ‘own boss’ can be a daunting step. Many of us take for granted the safety and security of having someone else make decisions that affect our day to day working existence and ensure that there is sufficient money available to pay the bills.

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News Items of Interest

CAMERON PROPOSES 1P CUT FOR FIRMS

Small businesses are the life blood of our economy and they need help says David Cameron.

Conservative leader David Cameron is calling for a 1p cut in national insurance to help small businesses during the economic downturn.

He said the reduction should last six months for companies which employ four staff or fewer.

Read the full article here: http://newsvote.bbc.co.uk/1/hi/uk_politics/7679168.stm

Guest Spot

This week's words of wisdom come from Derrick J Simpson, Managing Director of Franchise Resales Ltd. Here Derrick sets out a very concise outline of the key guidelines that are vital to anyone who is considering the purchase of a franchisee business.

10 GOLDEN RULES FOR FRANCHISEES LOOKING TO BUY A FRANCHISE

DECIDE ON YOUR INVESTMENT LEVEL AND STICK TO IT.

Do not overspend on a business venture. Invest to the level you can afford, include some negative “what if” planning in your calculations and keep a bit back for the unexpected events that may come along later. It is very easy to be carried away with an opportunity so a focus on the realities of finance is essential.

MATCH YOUR INCOME REQUIREMENT TO YOUR INVESTMENT.

Whilst the ideal is to invest £10 and earn £100,000, reality isn’t like that. So ensure the business you are looking at can realistically provide you with the income you require. You usually can only generate large levels of income with large level of investment (see Rule 1). A more modest income can be achieved with much less being paid up front.

CHECK THE FRANCHISORS PROJECTIONS – ARE THEY BASED ON ACTUAL AVERAGE FIGURES OR ARE THEY POTENTIAL

The ideal is for the standard projections provided to you by the franchisor to represent the average performance for the existing businesses in their operation. Smaller or newer franchisors may however have to rely on projections rather than actual figures. This isn’t wrong; you just need to be aware what the projections mean and comfortable that you are able to generate them using the franchisors system.

PLAN YOUR LONG TERM GOAL AT THE OUTSET

Part of the planning for your opening and launch is to establish your exit route. Consider your final goal; to sell in due course, pass it to an offspring, run it until you drop etc., will have a major effect on how you structure your business plan at the outset. So start out with the end-game in mind, that way you will have a good chance of achieving it.

PLAY TO YOUR STRENGTHS

Different types of franchise require differing skills. Some are direct sales based; some are retail service whilst others may be analytical. Ensure you match your skill set and personality to the style of business you are investigating. It may be worth investing in being professionally profiled so you truly know which environments suit you best.

RESEARCH THE MARKETPLACE FOR THE BUSINESS YOU ARE CONSIDERING

The internet provides countless pages of information on virtually anything, so ensure you have looked thoroughly at the business environment and marketplace for the business you are considering. Look for cyclical trends, regulatory changes and market intelligence. Speak also to current franchises and most franchisors will provide you with a list of their current owners.

SIMPLE IS GOOD

A business that is simple to operate with structured systems will be easier to run than one with nebulous concepts and where you are left to your own devices to drive it forward. A simple business will be easier to sell on to a new owner when the time comes.

CONSIDER AN EXISTING BUSINESS (RESALE) INSTEAD OF A NEW START-UP

An existing business purchased either from the franchisor or an existing owner will give you that vital cash-flow from day one, a market presence and, if appropriate, staff who know how to operate the business. It may cost a little more (see Rule 1 above) but the benefits usually outweigh the cost.

BFA MEMBERSHIP

Whilst not being a guarantee against all risks, a franchisor who is a member of the British Franchise Association has at least gone through a thorough vetting process to attain the standards required by the BFA and should, in theory, adhere to the BFA policies for ethical franchise operations. That doesn’t mean you can dispense with the other checks but it sure is a good place to start.

DON’T TALK TO NEGATIVE PEOPLE!

You are going into business with your money, your effort and your risk. Stay away from negative people who drain your self confidence and cast doubts on your dreams, efforts and abilities. To be successful in business you need to be constantly positive. Avoid anyone who is going to be a dampener and maintain a positive and upbeat approach.

Editor's Note:

With Kyros' Matchmaking service, you can be assured that the process of vetting potential franchise businesses has already been conducted for you. More than that, your professional Kyros Consultant can help you evaluate which opportunities best match your goals and aspirations based on their extensive experience with the actual franchisors. This benefit in itself could be one of the most valuable services they offer, and yet there is absolutely no cost to you for their services.

To find out more about these valuable services, contact Kyros for a no-obligation initial discussion: http://www.kyros.uk.com/Contact-Kyros.php

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