Small Business Financing and Franchise Financing Blog

Entrepreneur.com recently published an article called, 7 Essential Startup Steps. For the most part, this article did a good job of pointing out steps that an entrepreneur should take before starting or even buying a business or franchise to provide a greater likelihood of success. They suggested that one:

· Do more research on their industry / market
· Develop a strong capital strategy (small business financing)
· Hire an experienced business attorney
· Find a qualified tax professional
· Choose the right business entity
· Create a strong name
· Apply for and obtain the proper licensing and permits

This information can be extremely helpful for entrepreneurs who are often overwhelmed in the early stages of their businesses development. Having helped more than 4,000 people fund a business through 401(k) small business investing, Guidant Financial has seen many different people go into business for themselves. We know that there is one step (though we are over generalizing it) that brings immeasurable value to a new small business or franchise owner - building a great team! This can include, but is not limited to, a business broker or franchise consultant, business attorney, tax professional and many others.

If you are evaluating whether to buy a business or franchise, and would like to meet a professional in any of these areas (or simply need financing) - call us. We will happily make an introduction!

Scott Halford's column, Brainy Business, was fantastic today! Found on Entrepreneur.com, Scott focused on How to Avoid Self-Sabotage. He points out three very great points to consider:

• Avoid the "yes but..." trap. Instead, try using "yes and" so that you're additive to the idea process, not a detractor. You'll create barriers for yourself if you allow "yes but" to infect ideas.


• Create separate from evaluation. Brainstorm ideas free from evalution will allow creativity to flow. You can always go back later and try to evaluate whether it's valid or not.


• Think first, speak second. If you verbalize a negative emotion...it's more likely to become true (even if it's not in the first place).

We found this article very interesting because many individuals talk themselves out of starting a business or franchise because they act emotionally rather than logically about the decision. In addition, some of the greatest ideas never get off the ground because they are evaluated too quickly.

So what is the real lesson? Let your steak marinate for a few days before you cook it.

Do you think you need hundreds of thousands of dollars to buy or start a business? That may not necessarily be true! There are many low-cost franchise opportunities for individuals who are interested in owning a business.

Each year, Entrepreneur Magazine releases their Franchise500 list and subsequent lists to celebrate different franchise categories. This year, they ranked the following businesses as the top low-cost franchise opportunities:

• Instant Tax Service
• Jani-King
• Jan-Pro Franchising Int'l Inc.
• Kumon Math & Reading Centers
• ServiceMaster Clean
• Merle Norman Cosmetics
• Stratus Building Solutions
• Jazzercize Inc.
• Vanguard Cleaning Systems
• RE/Max Int'l Inc.

These franchisors, although not endorsed by either Guidant Financial Group or Entrepreneur, offer a way for new small business owners, franchisees and entrepreneurs to get into business for less than $50,000. A business or franchise of this size can still be financed, fairly easily, in this market. Many people are using 401(k) small business investing or unsecured loans to acquire their business. In addition, an SBA loan can still be a viable option.

Before you invest in any business or franchise it's important that you investigate the opportunity by interviewing attorneys, consultants and existing franchisees (if applicable). In addition, make sure you work with a reputable small business financing company so that you can adequately capitalize your small business or franchise investment.

Many of our Guidant 401k clients are either current franchisees or seriously considered purchasing a franchise during their due diligence process. Why? Because franchises offer a lot of benefits to any entrepreneur.

Earlier this week, The Wall Street Journal published an interview with experienced franchise consultant Britt Schroeter (see The Franchise Decision), which includes many insights into who franchising works best for, why it is so prolific in a down economy and what to keep in mind when considering a franchise.

As Ms. Schroeter, who has worked with Guidant in the past to obtain financing for her clients, tells the WSJ, “franchising is entrepreneurship with training wheels.” And, during these uncertain economic times, when the entrepreneurial itch comes along, many prospective new business owners take no issue with starting something with some extra safety rolled in.

We definitely think that the interview with Ms. Schroeter is a very useful resource … even for those who are considering purchasing an existing business, and not necessarily a franchise.

Some suggestions Ms. Schroeter has for prospective franchisees, which (we think) are helpful for anyone considering a business purchase:

“As for general guidelines, I advise my candidates to always shop within
their means. People assume that it takes a lot of money to make a lot. Not true.

“There are franchising opportunities with low investments that have some of the strongest [returns on investment] around,” she tells the WSJ.

“The emergency-restoration industry [that services flood, fire and other catastrophe victims] is one. Commercial cleaning also can be a very low-ticket business.”

“Consider options where you can keep your job and start a franchised business on the side. That way you have the security of your job and can move into your new business full time when it’s financially viable.”

“I’ve always taken “fast growth” with a grain of salt. You need to make sure you select the franchise based on reality, not hype. Climbing on board a fast-moving train is great, as long as the track is solid. Rapid growth can be a sign of a healthy system—most of the time.

"But because a lot of others are getting into a franchise doesn’t mean you need to be any less careful. Do full diligence. Do your homework. Think for yourself.”

On April 27th, 2009, the Wall Street Journal reported that franchising sales have declined due to the recession. Really??? Duh!

If you are a small business owner and are looking for new and innovative ways to save money - we might have something in common. Guidant is a leading provider of 401k small business financing. In addition, we are also a business filled with employees, cubicles and filing cabinets. Like most business, especially given our current economy, we continue to look for ways to save money.

The examiner recently gave us three more ideas to save including: cheap business space, bulk office supplies and…the next generation of employees? Unfortunately robots were not included...maybe next time.

Here are their big three:

1. Business Space - work from home or think about sharing an office with a company which may have extra space.
2. Supplies - buy in bulk at your neighborhood warehouse store.
3. Employees - can’t afford to hire a full or even part time employee? Look into virtual employees. There are many individuals who can help via remote location for a few hours a week.Looking for another big idea?

If your business needs money, and you see strong upside potential, you might want to think about investing some of your floundering retirement funds into your business. Maybe it can be used to purchase new equipment that is long overdue, provide growth capital for new infrastructures or expand your sales operations.

Check out our other business financing options.

Guidant Financial Group is a leader in small business financing. The rise in unemployment can certainly be attributed to the spike in interest we have seen in small business ownership. Yesterday, Kiplinger.com published an article called, Laid Off? Start a Business. The article does a great job identifying that there are many opportunities in small business both big and small. An SBA economist, Brian Headd, was quoted as saying, "Non-employer firms have the highest growth when the labor market struggles and the lowest growth when the labor market is doing well."

Businessweek.com recently published a very relevant story called, 10 Ways to Cut Business Costs. There is no doubt that many small businesses are looking for ways to cut costs and improve profits during these turbulent economic times. This article identified great ways to save money by: