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Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.

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Featured Biz Question

I'm thinking of opening my own business, but not sure if I should franchise or start up my own business. I'm looking into like Mail Box, etc. kind of business in my local area. Any suggestions and where to contact for supplies? I have no experience with owning or running a business. Please help.

Answer from our Guest Expert Kent Capener of Capener Consulting

Franchise Advice

Dear CyberSchmoozer:

Well, franchising can be an excellent way to get into business. Like all things, though, there are two sides to the coin. So be sure to get details and research beyond what the franchiser dishes up to you. This way, you'll have a fuller plate of info on which to base your initial decision.

The desire to own your own business can be like the fire at the center of the earth --insatiable. A hundred years ago -- when I did it for the first time -- that fire was the only reason I stayed afloat because I didn’t know what I needed to know to do what I did! When considering starting your own business, make your own business experience a factor in the decision you make.

When stewing over which way to go, consider this example of each option. You're hungry, and you have a wallet full of disposable income. You have two choices. Restaurant Start-Your-Own-Business offers the broadest menu ever conceived. When you enter, you're required to choose between thousands of menu items. Making the right choice is the key to a good meal (or gastronomic distress) while in this restaurant. The alternative is Restaurant Chez Franchisee. Here, the only choice you make is to eat or not to eat. Choosing to eat results in a meal served to you -- you have no menu selections to make -- everyone eats the same meal.

When you look at going into business for yourself -- by yourself -- versus purchasing and operating a franchise like "Mail Boxes USA", get as many facts and figures as you can on a franchise opportunity (plus do your research on any small biz idea you're interested in).

Franchise's Menu Items

Franchises, in general, offer a package deal, which the following basics can include:

  • A tested business concept
  • Leasehold improvements, depending on the business
  • A business plan (usually in a three-inch binder with tabs)
  • A business image package, such as logos, camera-ready art and instructions for their use
  • Initial inventory; supply plans and purchasing requirements, if any
  • A detailed manual for your participation, including how and when you're to pay the franchiser for your daily operations.

Costs for the package generally include:

  • A "franchise fee"
  • Development or build-out costs (the physical facility)
  • Initial inventory
  • Grand opening promotion
  • Initial supplies
  • A required financial condition, including a certain amount of liquidity.

The last condition is the most critical. Franchises aren’t necessarily cheaper to start. In fact, they can be more expensive. When they are, however, you generally have a better chance of success in the business.

To get behind these ordinary menu items, dig deeper.... (continued)

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About the Expert

Kent Capener
Owner of Capener Consulting

Kent Capener

Kent is an expert on marketing; advertising; print, radio, and TV production; biz plan writing; trade show services; and direct response television. He relishes helping start-ups grow. more