Buying a business at “Good Will”

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Some of the advantages and disadvantages of buying a business as opposed to starting one from scratch. What two ways can one buy a business and which is preferable? Why?

When you think about whether or not to buy a business, the first thought to you mind should be, how much return can I gain from it? Is there an established brand, and customer loyalty that will favor my investment? This of course isn’t the only reason to buy and take over an established business. You must also take into consideration, if you have experience in this field of business. While being a business banker, I have the opportunity to meet many businesses from all types of background and industry, and one common mistake I see is people with little to ZERO experience buy businesses that have NO clue how the industry works. They look for ways to invest their savings in order to achieve higher profit margins than your typical savings, money market, and investment retirement accounts. However there is still a key piece that is missing, EXPERIENCE. If you don’t know how to manage a restaurant, than it is best you don’t immediately buy an established restaurant. WHY? You ask? Because there is more than simply attending clients, and fulfilling orders, you need to account for the marketing aspect, the fact that you need to be there 24/7 taking care of the take over phase while the current employees get used to the new boss (YOU).

Starting a business from scratch is much favorable for those who have the experience in the industry and want to branch out to either serve a niche market, such as a chef branching off to open their own restaurant to serve his own receipts and food creations. As a business owner you can establish a brand new business if you already have the experience in the field. If you have no experience in the field than I recommend you invest in hiring experts to run your business, because the biggest part of taking over an established business is making sure you can maintain a well deserved rate of return on investment. Take time to research what type of business you want to buy and take over if you have investment capital to spend, however always take into consideration to have experts on your side of the playing field in order to not throw your money away simply because of a splurge of a business you liked.

You can buy your own business by contracting a business consultant who has many years of experience in the field and can help you find your ideal business; he/she is like your agent.

Or you can also do the research on your own if you understand your industry and can rely on your expertise to find your ideal business. Which one of the two is favorable? That is up to you to decide.

 

Is there such a concept as ―good will‖ in reality and is it transferable? Why or why not? Give an example.

There are a number of “good will” companies that currently serve the community, such as non-profit organizations. Non-profits are built to serve a purpose, a cause, and a community. It is run by experienced managers, executives, etc.… who sometimes do in fact get paid sometimes salaries over millions of $$ a year. Yes that right, Millions of $$! Now some people might wonder why the heck do they get so much money? Well in fact a lot of non-profit schools, hospitals, etc. need to have experienced executives to run the organization, and this comes with a price! Of course in fact non-profits run like a business, in contrasts however there are a lot of tax savings and benefits that the corporation can received however it doesn’t have a different of business structure. It still has managers, HR, accountants, engineers, doctors, etc.

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Greg Hickman founder of Mobilemixed.com

The Creator/Host of Mobile Mixed a Mobile Marketing Consultant focused on retail, Co-Founder of Thumbfound, Entrepreneur & Mountain Biker. Greg started off as an agency guy having the opportunity to work on brands like Pepsi, Lipton, and Walmart, creating and managing digital, in-store and grassroots initiatives.

Check out his website for more tips, and tricks of mobile marketing:
http://www.mobilemixed.com

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Should you start a franchise?

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What is the difference between a franchisee and a company owned store within a franchise chain? Why might one prefer to be the franchisee or the manager of a company owned store?

The main difference between a franchisee and a company owned store within a franchise chain is that the franchisee is the entrepreneur of the location, he/she can run it as he/she pleases always keeping in mind that there are still certain rules and policies to abide by according to the franchisors liking. The company owned store within a franchise chain is simply what it states, a store location that is owned by the franchisee. There isn’t a right or wrong answer to which one should you choose. It all depends on what type of personality trait you have and what responsibilities and freedom do you prefer. If you want to be a free bird, make your own decisions, be your own boss and make some changes according to your liking that you want to be a franchisee. Becoming a franchisee does come with cost. You have to take into consideration that you will require start up capital in order to own your own store with the rights of renting the name and products from an existing franchise. You have a lot more of a responsibility that would a manager at one of your locations. If you are an entrepreneur at heart, want to take on the challenge of becoming a franchisee than you want to go that route. It wont be an easy peasy road, be prepared to run into a lot of headaches, problems, challenges, and expenses, however the pay out and return are much greater to those obstacles mentioned, if you are prepared with the right tools and experience.

The manager at the company owned franchise is what it states, a manager. You will be running the store location on behalf of the franchisee and your responsibilities are less than what the franchisee has to deal with. You don’t have to invest any money in order to become the manager, however you still have to manage the company employees and most of the time has to account for the finances of the location. You have many times the responsibilities of having a profitable location, because if your store isn’t profitable, you won’t have a job. Managers have to be ready to face the day-to-day problems and challenges, such as upset customers, employee training, customer service, time management and a lot more duties. Think about which category you fall right into and that would be the option for you. Of course always keep in mind that both come with very different challenges and rewards, however at the end of the day you have to be ready and happy in whichever role you choose. Your health and happiness is the most important part to carry either role successfully.

What is typically provided by a franchisor to its franchisees? Why would these be valuable to a nascent entrepreneur? Why is the failure rate lower for franchisees than it is for independent businesses?

Typically, Franchisees receive the material (food, ingredients, supplies, etc..) at a reduced cost. It is the franchisees responsibility to budget what they will need in order to run a successful branch/store/location. The franchisee needs to be prepared to follow policies and procedures, and has to have had some experience in the industry they are looking into franchising the name in order to be the most successful possible. What the franchisee gets in return of their investment in the company is the established name and brand that the original founders have already established and took the hardest part of starting a successful business out of the equation for the franchisee. You need to not worry about the brand recognition because it has already been established. The failure rate for a franchisee is lower than any independent business, because it has already established the name and recognition and whenever someone is in need of that particular product or service than they come to your store because of the already established name and brand. Where as for a start up, it has to work harder to build customer loyalty and brand recognition, thus proving that if you want to run the show and start a movement/brand you need to put in the work and proactively come up with innovative ways to promote your company image. Becoming a start up isn’t a easy position to be in, neither is running a franchise, however start up comes with more labor and hours of brainstorming how to penetrate the market with your product/service.

Establish and running a successful muse

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For the past few weeks I have been working day and night preparing for our first kiosk launch at the Westfield MainPlace Shopping Mall, really thrilled and excited to share our innovative products with local shoppers. Our website will be updated soon with our Funky Charger and Character USB figures for internet purchases.

While building a concept of the idea I had to launch this project and business, I took into consideration allot of factors that helped affirm that this was the business idea (of many I have had) to launch and take on the challenges of launching a startup company. I believe that my persistence and risk taking personality traits have helped shape the business model that I have built, staying up to date with the latest technology, and doing tremendous research on what manufacturer to pick to help make a dream come true. The independence of choosing which manufacturers to hire and which to fire have been a great opportunity to help nurture and build my business (my baby). The leadership skills that I have picked up along the years, with leading other businesses, music and dance groups have helped me build confidence in my work and abilities. 

Recently I pick up a book to study and read for one of my Masters of Entrepreneurship Program course called:

It’s a jungle in there by the founder of the Rain Forest Cafe, Steven Schussler who is also founder and CEO of Schussler Creative, Inc., a company that creates theatrical environments for attractions, restaurants and retail stores worldwide. In reading the first coupe chapters I have found various personality traits that I feel I share with Steven, which fuel my drive as an entrepreneur and also help confirm that this is what I want to do for the rest of my life.

I also continuously thank my parents for having supported all my business venture attempts, they have seen the many mistakes I have made with certain business decisions, however they have supported me regardless of the risks I took, and that is why I recommend having certain people like your parents, and mentors part of your life to help support you in your decisions and allow you to make mistakes to learn from. I have held many job positions in the finance and banking industry which I currently still hold a Banker role in a large bank, but with time plan to eventually take on my businesses full-time. I graduated high school in 2004, and just this year did I earn my bachelors in International Business from Cal State Fullerton,  which although I wasn’t your typical 21-22 year old college grad, I was able to share life, business, and work experiences with others part of the same business program. I found myself many times not being the only 23+ year old in college finishing a first degree. A lot of the great friendships and connections I made in my undergrad years shared different experiences in various fields and this is why I believe that the perks of getting your degree, regardless of part time or full time are beneficial for you in the long run, because you build a network that you will be part of for the rest of your life. I also thank LBSA (Latino Business Student Association) for opening their doors with open arms; it’s this network of friends and colleagues that drive student success, achievement and support.   

I am a firm believer in sharing my experiences with everyone that I can reach out to, experiences with accomplishments, rewards, and mistakes all which are lessons learned. Thank you all for your continuing support!