Top Ten Mistakes of Prospective Franchisees

Evaluating a franchise opportunity is a tricky business. Roger C. Rule, writing for Inc. Magazine provides this list of the top ten mistakes that people make when exploring franchise offerings:

1. Not reading, understanding or asking questions about the disclosure document.
2. Not understanding or having an inaccurate or incomplete interpretation of the franchise agreement and other legal documents to be signed.
3. Not seeking sound legal advice.
4. Not verifying oral representations of the franchisor.
5. Not contacting enough current franchisees.
6. Not confirming the reasons for failed franchises.
7. Not having enough working capital.
8. Not recognizing the need for financing, not knowing how to make a proper loan request and not developing a true and accurate financial statement.
9. Not meeting the franchisor's key management personnel at their headquarters and the field representative assigned to your territory.
10. Not analyzing your market in advance.

Be sure to check out the full explanations of the items in this list at the Inc. Magazine web site.

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Pimp Your Blog - Editing Blogger Templates to Add a Third Column

The standard templates provided on Blogger.com save a tremendous amount of time and energy and give users a fast start on a professional looking blog. But most of the standard templates on Blogger are two columns and potentially waste valuable screen real estate that could be used to offer features to your reader or display additional advertising.

Editing a Blogger template merely requires that you be familiar with XML and XHTML. Not an expert in those two web languages? Have no fear as the handy blog Tips for New Bloggers can help. Among other handy tips, they provide you with step-by-step instructions for editing many of the standard blog templates to add a third column such as the Rounders 4 template. Just check their archive or related posts sections to the Rounders 4 modification instructions for links to pages that provide instructions to modify additional templates.

So, pimp your template today and start packing in those additional features for your readers!

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Performing a SWOT Analysis for a Small Business

A key step in risk management that assesses a firm's strengths, weaknesses, market opportunities, and threats is a SWOT analysis. Although this is a relatively simple process, many problems can be anticipated and avoided by identifying them up front. A SWOT analysis is usually a key component to a small business plan. A SWOT analysis is normally represented visually in a four box grid as shown below:



The SWOT analysis starts by honestly assessing the internal strengths and weaknesses in a firm. The next step is identifying opportunities and threats that may affect the organization from external forces such as the market space occupied by the company, the overall business climate and societal forces. SWOT analysis is best preformed by a team of individuals that have diverse personal attributes (gender, age, income level, etc.). Gender diversity is especially important since woman and men tend to perceive threats and opportunities very differently.

The end product of a SWOT analysis is to identify and examine significant factors, both positive and negative, that might affect the small business being launched or the situation being analyzed. The SWOT analysis is an excellent way to document the thought process that was used in arriving at a business strategy and developing marketing goals and objectives.

In each of the four SWOT categories, you may consider organizing the attributes by logical business function (marketing, manufacturing, supply chain, financing, etc.).

Strengths
Strengths usually describe things that the company excels at doing. All strengths listed should support a competitive advantage that the corporation has over its rivals. These can be tangible (fast delivery of products to customers) or intangible (excellent customer service promotes very high customer satisfaction). As these are internal attributes they should all be within the company’s control. Ask questions such as:

• What does the company do well?
• What resources (physical and personnel) does the company possess?
• What advantages does the company have over its rivals?

Do not forget to include key strengths that the people in the organization possess which includes things such as their experience, knowledge, educational background, business connections, and job skills. Tangible assets such as plant capacity, state of the art equipment and facilities, strong supply chains, available capital (or access to credit), loyal customers, patents, copyrights and superior information systems.

Weaknesses
Weaknesses are factors that the company controls that impair its ability to compete with other firms. Weaknesses are any areas in which you need to improve to maintain a competitive edge in your market. Ask questions such as:

• Which departments need to be improved?
• What resources does the company lack?
• What skill sets do the employees lack that competing firm’s workforces have?
• What services does the company fail to offer?

Opportunities
Opportunities are the external factors that will allow your business to succeed against its rivals. Since these are external factors, they may not be under control of the company. Ask questions such as:

• What opportunities for new products or services exist in your market?
• Are new markets available that could provide opportunities for growth?
• Have new technologies been developed that will allow us to compete more effectively?
• Have consumer lifestyles, wants and desires shifted?
• Are the target customers economically healthy?
• Do previously resolved internal problems give the company a competitive edge?

Usually, opportunities reflect the areas where you can excel by changing the company’s marketing strategy. Should new products be launched? Should existing products be promoted to new customer groups? If possible, identify the time frame for each opportunity. Is it something the company must capitalize on by a certain date or will the opportunity last indefinitely?

Threats
Threats are factors beyond the control of the company that reduces its competitiveness in the marketplace, adversely affect marketing strategy, or in a worst case scenario, potentially lead to the total demise of the business (think buggy whip manufacturers when automobiles became popular). Although the company has no control over external factors, the key is to identify the threats and draw up contingency plans to negate the threat or soften the impact should an event arise. Ask questions such as:

• Are consumer preferences shifting away from company business lines?
• Is price competition from competitors affecting company profit margins?
• Are new technologies making the company’s products or processes obsolete or unaffordable?
• Are new competitors entering the market space?
• Are suppliers increasing prices?
• Are raw material costs going up due to scarcity or catastrophic events?
• Is the general economy on the downswing?

Classifying threats by the degree of impact and the likelihood of their occurrence is often useful to help identify which threats need to be planned for immediately.
 
The Benefits of SWOT Analysis
The main thrust of the exercise is to determine how the company’s strengths can be used to take advantage of opportunities and minimize critical threats. Eliminating weaknesses can also provide resources to capitalize on opportunities or ward off threats. Identifying the most critical issues provides a game plan for the business to follow based on an honest assessment of the firm’s potential.

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How Does a Blog Help a Small Business

Most people know that a web presence will help attract customers to your business. But entrepreneurs are busy people and often short on capital, especially when the business is in start-up mode. Trying to figure out how to pay your employees next week and serve the customers in your store is going to take precedence over trying to be your own webmaster. Blogs can help in the following ways:

1) Blogs are cheap - You can start a blog very inexpensively (or even free at sites like Blogger and Wordpress). This can be a very cost effective way to increase name recognition for your business.

2) Learning to Blog is Easy - Blogging software is easy to learn and doesn't require users to be experts in web design or HTML. With the same skills you use to write an e-mail, you can post text to a blog.

3) Blogs Are Quick to Update - Contacting a web designer who is maintaining a web site and asking them to make changes usually has a much longer lead time. With a blog, you the business owner can make adjustments on an ongoing basis whenever they have the time.

4) Blogs Are Designed For Sharing Knowledge - A blog is a perfect vehicle for a professional or consultant who wants to attract customers by giving them a little taste of their knowledge for free.

Gizmodo is a good example of a business blog. Gizmodo uses a blog-like format to provide reviews of gadgets, gizmos, and cutting-edge consumer electronics. This blog format could easily be adapted to showcase products that a local small business offers for sale.

So start a blog for your small business today. It's fast, easy and should be profitable!

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Small Budget? Try These Low-Cost Franchises

Want to start a business but you are low on cash? Entrepreur lists the top low-cost franchises for 2007. Many of these cost less than $50,000 and some are even as low as $2,000! As always, you need to do your homework which should include interviewing other owners of the same franchise to satisfy yourself that any claims and estimates the franchisor is making are reasonable. Click here for a great list of questions to ask franchisees before investing.

See you on the Fortune 500! Use this handy product to learn learn all about franchising!

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Dare to Be Different - Original Posts Attract Readers

Generating original, useful posts is the best way to attract readers to your blog and keep them coming back. Sure, the ocassional post that summarizes someone else's thoughts and directs your readers to their site is fine. But people expect new information (or the information they are seeking) when surfing the web so it is up to you to provide new, original posts on a regular basis.

To paraphrase the 1989 movie Field of Dreams, "If you write it, they will come!" Check out this resource to start your own blogging business.

Don't Forget to Back Up Your Work!

All your hard work on starting a business, business plans, marketing, etc. will be wasted effort if your hard drive crashes (breaks down). So don't forget to back up important documents (like homework and research papers) to another form of media such as CDs, DVDs, flash drives or external hard drives.

"My microchip ate my homework" isn't the effective excuse that "My dog ate my homework" used to be!

Starting a Business - Nothing is Cheaper Than a Free Blog!

Can you start a business for zero dollars? Sure you can since Al Gore invented the Internet!

It is easy to set up a blog site and have it hosted for free at sites such as Blogger and Wordpress. Writing a blog only requires some creativity and sweat equity.

What should your blog be about? Any topic in which you are knowledgeable that you think will be compelling enough to draw others to your site. The basic idea is to provide useful information from your ideas and experiences or to direct people to resources on the web related to your blog topic. You want to keep folks coming back to your blog in hopes that you will eventually make some money from them. More about making money from blogs in a future post...for now, just concentrate on setting up a compelling blog.

Below is a short video on how to set up a blog on Blogger. You can find many more videos such as this one on You Tube.



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Your Tax Dollars at Work - Best Online Resource

The US government doesn't waste all of our tax dollars. In fact, the Small Business Administration web site is a great place to find every kind of information related to starting a business. So be sure to check here first and then expand your search to other resources.

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Saving Money on Small Biz Text Books

Waiting until the last minute (i.e. - the first day of class) to purchase your text books is never a good idea. Planning ahead can save you money on your book. Check online sources such as Amazon.com and Half.com for deals on used books. Small Business Management: An Entrepreneurial Emphasisis less than $70 used on Amazon.com as opposed to the list price of $153!

Your book store might also carry copies of used texts if you get there early enough. Even if you can't find a used book, buying from Amazon.com, BarnesandNoble.com or the book publishers web site can usually net you savings off the list price of the book. Rest assured that you can be almost certain of paying the highest price for a new book at your college book store.

So check with your professors before classes start for the books you'll need and start saving the big bucks!

Welcome To Small Biz Rocks

Small Biz Rocks is a resource blog to assist students taking small business classes in locating online resources and to develop blogs as a profitable small business. Please check back frequently (or subscribe to our feed) as we'll be adding information as quickly as we locate it!