July 2009 Archives

"If you see a major change on the horizon, if you are confident that it represents a better way of doing business, don't just walk - run to embrace it."

—Barack, Inc: Winning Business Lessons of the Obama Campaign (Barry Libert & Rick Faulk)

Based on results from the 2008 NatWest/British Franchise Association Survey, 81% of new franchisees secured funding from a retail bank to start up their new business. The loan amounts varied but it accounted for anywhere from 50% - 70% of the start up cost needed to fund a franchise business.

Now, as lending criterias tighten, franchisee candidates continue to source funds from the banks but also through alternative means. This include leveraging assets including:

1. Home Equity
2. Pensions
3. Savings: ISA, Endowment, Bonds/Collective Invest, Share portfolio, etc.
4. Family Trusts: Inheritance, Family Assets, etc.

Whether or not any of these are appropriate, really comes down to each franchisee candidate's individual situation. Thus, would recommend getting expert advise from a Independent Financial Adviser like Kingswood Law. Particularly as anyone who embarks on a life changing decision to start a franchise business needs to take a business minded view in a number of key financial areas as this will undoubtedly affect their success.

Three key issues for each franchisee candidate to consider include:

1. To explore the low cost or even no cost ways to fund your business to ensure you get off to the best possible start in whatever business venture you decide. After all, any interest payments you have to make will be funded from your profits
2. To understand how to maintain access to a supply of low cost funds in the future to help your business grow and to take any pressure off cash flow problems as you establish your business.
3. Once established, you may want to understand the best way to protect both the business and your personal assets. This is just good planning as in the real world things don't always go according to plan. So minimising personal guarantees, and the risk to the family home are crucial.

So in addition to seeing a franchise business banker, would definitely encourage all franchisee candidates to discuss their new venture with an Independent Financial Adviser. Yes, you want to get access to the funds necessary to start up but you also want to make sure that you protect you and your family's way of life.

A few weeks ago on the train from London to Manchester, I read: Barack, Inc.: Winning Business Lessons of the Obama Campaign by Barry Libert and Rick Faulk. This book was a gift from a franchisee candidate for "my assistance and support through a life changing decision" -- giving up his corporate job in the city and becoming a business owner through franchising!

Barack, Inc. outlines some key lessons that business leaders can learn from President Barack Obama's improbable victory. These include:

1. Be Cool: The indispensable quality of a leader whose decisions and actions can change people lives is his cool -- His calm rationality, steadiness under pressure, and ability to stay on message and control strong emotions.

Thus:

• Ignore the sideshows - keep your eye on the centre ring.


• Fix the Problem; forget the blame.


• Play hardball when necessary.


• Vent outside the tent.


• Adjust to the memoment.


• Lead with humility.

2. Be Social: Business -- like politics -- is extremely personal.

Thus:

• Cultivate the new grassroots, the netroots (i.e prospects and customers via social networks like: Facebook, Twitter, YouTube, etc.).


• Create a seamless community.


• Nuture your lists.


• Let your netroots grow into every crevice.


• Arm yourself against, and don't take, cheap shots.


• Turn Customer Relalationship Management into Customer Managed Relationship.


• Make your marketing mobile.

3. Be The Change: Impermanence rules the universe. Those who resist change resist reality and life itself.

Thus:

• Confront reality and put problems in context.


• When you're on solid ground, don't back off.


• Share your vision of the future.


• Forget the squabbles, strengthen the team.


• Never forget the power of the personal touch.


• Get unfiltered information.


• See yourself clearly.

None of the lessons or ideas above are revolutionary. In fact, it's all really obvious stuff. However, as most of us know, very few business executives, never mind leaders can execute them flawlessly. Of course, that doesn't mean we shouldn't try for these ideals --especially on the change front. Particuarly as: "change is eternal; change is business opportunity; change is life itself."