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Looking for advice: Start a business or buy a franchise...?
Posted by: Chakravartin
Date: November 16, 2011 08:19PM
I was complaining about work to my dad when he came up with an interesting proposition.

He said that he's willing to take my inheritance and put it towards a business now, while he's still alive.

Knowing my dad, he's not serious, but I'm motivated to make a change and I'd like to look into buying a small business. I might be able to find financing elsewhere if it's a decent proposition.

The problem is that I don't have any particular business in mind. One reason that work sucks lately is that there's less demand for people in my field of work and I suspect that it's going to trend worse.

I recently attended a franchise expo, but didn't find any businesses there that I had any confidence in. It's notable that none of the national chains had a presence there and some exhibitors refused to talk to anyone who didn't have at least a million in cash or secured loans ready to invest on the spot.

Sticking close to reality, if you had a little extra money to set yourself up, what business would you purchase or start?
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: cbelt3
Date: November 16, 2011 08:24PM
Oog. Did that once, started and ran a cleaning business because it was minimal startup capital (Broom ! Vacuum ! Done !)

I'd start with what you love to do, and can SELL.

If, for example, you love hiring and sexually harassing teenaged girls, go with an ice cream stand (like an ex co-worker of mine did, until his wife learned about it. He lost the stand in the divorce.)
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Spock
Date: November 16, 2011 08:37PM
Listen to Steve Jobs commencement speech and then think about it.

[www.youtube.com]



Comedy Central: Best news channel that isn't a news channel.

Fox News: Best comedy channel that isn't a comedy channel.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: mattkime
Date: November 16, 2011 09:00PM
bogleheads.org



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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: testcase
Date: November 16, 2011 09:05PM
I hear pRon is pretty recession proof. How do you look naked????? eye popping smiley
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: rgG
Date: November 16, 2011 09:10PM
Can you start something part time, on the side, and see if could be grown into a full time thing, while you keep your day job?

Being an independent contractor for some type of service would seem like a good place to start. Get a client or two, do a great job for them, and grow, hopefully, by word of mouth.

As for what you do, make it something you like and are good at, whatever that is.

I started my own business as a decorative painter. I could set my own hours and take on as much work as I wanted. Obviously I had to have the ability to do the work, but other than that, the investment was minimal. It was pretty much all labor and a few supplies. I had a van that accomodated my ladders and supplies. I enjoyed it, but don"t do it anymore, for several reasons, one of which was working on ladders and lifts a lot of the time, but it was a good experience while it lasted.





Roswell, GA (Atlanta suburb)
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: MacArtist
Date: November 16, 2011 09:17PM
Sorry...you lost me at inheritance.



I sit on a man’s back, choking him and making
him carry me, and yet assure myself and others
that I am very sorry for him and wish to ease his
lot by all possible means — except by getting off
his back. - Leo Tolstoy, novelist and Philosopher
(1828-1910)

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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Chakravartin
Date: November 16, 2011 09:40PM
Quote
rgG
Can you start something part time, on the side, and see if could be grown into a full time thing, while you keep your day job?

I've been freelancing on the side for quite awhile. I haven't been able to grow it enough to make a go of it as a full-time business.

I'm rather soured on this whole field. I suspect that even if the economy recovers this kind of business is on its last legs.

I need to do something else for a living. Maybe run a bagel joint or a turnkey car wash company or... I dunno. Something other than what I'm doing now.

Quote
rgG
As for what you do, make it something you like and are good at, whatever that is.

I don't know what I like anymore. That's why I'm looking for ideas.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: rgG
Date: November 16, 2011 09:44PM
Quote
Chakravartin
I need to do something else for a living. Maybe run a bagel joint or a turnkey car wash company or... I dunno. Something other than what I'm doing now.


I don't know what I like anymore. That's why I'm looking for ideas.

Ah, I understand completely. I have been struggling with these same demons myself. sad smiley





Roswell, GA (Atlanta suburb)
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: M>B>
Date: November 16, 2011 09:48PM
Half of new businesses fail in a years time. If you do it you should have enough cash to exist a year without any profit.

My folks started a business that was successful and they never took out any money for themselves for five years.

I would suggest purchasing commercial property and let the tenants pay you, if you are lucky.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Bosco
Date: November 16, 2011 09:51PM
I know what you mean, Chakravartin. I'm in a similar situation.

Anyway, try not to get too discouraged. Keep looking with an open mind. Watch some movies, get out and do something that will inspire new ideas.

You'll figure it out.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Buzz
Date: November 16, 2011 09:59PM
You'll probably find that many franchise companies will tout they they've never had a franchise fail...
what they fail to you, is that they've had many franchisees fail, and that franchise #345 that they're trying to sell you for the territory you're interested in has been owned by perhaps several others before you, and was taken back by the company to now be offered as a never-failed opportunity to you.
There's a reason the well-known, nationally successful chains didn't have a presence at the expo; they don't have to. The wannabes want your money, perhaps in the hopes of growing into a well-known national brand, or perhaps just to glom onto your money. Caveat emptor.
Do your homework-- and the more capital you're prepared to risk, the more homework you should do. Merely risking your time, should at least be a learning experience.
Risking capital should be a well thought out investment decision.
Good luck.

///



Sometimes it is what it is...
and then there's times when it's really better.



==
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: clay
Date: November 16, 2011 10:00PM
I am in a somewhat tangentially related similar situation, it's tough, I know. As I've thought about doing something else, the thing that gets me is the "50% of new businesses fail in a years time" stat. When I consider what many new businesses cost in terms of sheer startup costs, it makes me sick. Were I to drop 50k on something with a 50% chance of failure, why not just sit at home for a year and piss away 50k while not working myself into the ground?

So..I've been trying to think about lower-risk options for small businesses without the overhead or startup costs. Been hitting my head against a wall for something that I really care about. Hopefully some things I'm doing to work through that will yield some results.

Good luck, and keep us posted.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Black
Date: November 16, 2011 10:59PM
Maybe something like this?
[www.youtube.com]




New forum user map 8/2015: [www.zeemaps.com]
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: blooz
Date: November 16, 2011 11:31PM
I would avoid the franchise thing. I worked for a printing/publishing company for a while and we would print these things called "TV Facts" which were a kind of cheapo TV Guide. TV Facts was a package put together by a couple guys who would sell the access to listings and give pointers for selling ads (where the money came from—the magazines were free) in a seminar. I don't know how many thousands the franchisees (read suckers) had to put up, but in the ten years i worked at that company we printed for over a dozen franchisees and they all went out of business after a couple of years. One, started by one of the guys who created this thing (and who had other irons in the fire—and who, even so, was often late with his payments), was still going when i left the company, all the others were kaput.

Maybe if you can get a McDonalds or Burger King…



And we should consider every day lost on which we have not danced at least once.
—Friedrich Nietzsche
Western Massachusetts
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: freeradical
Date: November 16, 2011 11:35PM
I think that having a business that sells franchises could be pretty lucrative.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Chakravartin
Date: November 17, 2011 12:03AM
Quote
blooz
I would avoid the franchise thing.

I'm very cautious about franchises.

I've been pushed to invest in a few of them over the years and when I started digging -- talking to real owners instead of to the shills that the franchiser refers people to -- I found out just how big a scam each one was. With 5-10% of the income dedicated to a non-existent national ad fund, $20k in mandatory "improvements" every year or two, tied licenses forcing people to buy the rights to set up 3 shops when they were only setting up one shop. Absentee district managers hiring people for the store without consulting the franchiser. Penalties for selling the place or for going out of business. Every one of them was losing money.

It's made me a bit paranoid. I smelled "scam" all over the floor at the franchise expo.

But surely not every franchise is a scam.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: ztirffritz
Date: November 17, 2011 12:24AM
I'm just starting down this road too. I just started a business with my best friend from High School. I think that I've worked out a workable plan that will allow me to continue my day job but I won't know until I try. Fortunately my buddy is unemployed so...free labor. We worked out what he needs to make to survive. Anything left over goes to me to pay off the investment. I'm bankrolling the operation for now. If we do well enough to pay off the initial investment then we split it 50/50. After that I should have a nice paycheck every month...if it works.



**************************************
MacResource User Map: [www.zeemaps.com]#
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: SteveO
Date: November 17, 2011 12:59AM
What?! Nobody has mentioned investing in AAPL?! Sacrilege!

But seriously. Think about it. Look at the price history the past 10 years. Steve is gone, yes, but he left plenty in the pipeline and he was not the only reason the company is so successful. AMZN is also a long-term pick imho.

Like dogs? Doggie day care. Only drawback is you never get holidays off and you gotta staff pretty much 24/7 unless you are daycare only. Or dog walking business. No overhead. Cool. Lots o' word of mouth in the pet community. Pet photography. Target the local singles and gay community. Big di$posable incomes for all this pet stuff.

Elder care is big these days and getting bigger daily. You gotta like seniors, though. Maybe a business that services/supports senior care or retirement communities?

I like the car wash idea. I've been thinking about this the past five years or so. Coin-op, simple, make it cheap so people come back often. People will always have cars.

Yeah. The freelance gig is real tough these days. I hear you. I also question whether the biz will return. SM has changed everything, now everyone is a marketing expert, doing their own copy and design (and it shows). Ack.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: bazookaman
Date: November 17, 2011 04:43AM
Quote
Chakravartin
I've been pushed to invest in a few of them over the years and when I started digging -- talking to real owners instead of to the shills that the franchiser refers people to -- I found out just how big a scam each one was. With 5-10% of the income dedicated to a non-existent national ad fund, $20k in mandatory "improvements" every year or two, tied licenses forcing people to buy the rights to set up 3 shops when they were only setting up one shop. Absentee district managers hiring people for the store without consulting the franchiser. Penalties for selling the place or for going out of business. Every one of them was losing money.

I had no idea. Sounds like it's run by the mob.




__________________________________
There’s a guy wearing overalls with no shirt.
Which I think we all know is the International uniform for the last guy you’ll ever see.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: WHiiP
Date: November 17, 2011 05:19AM
What business are you in now?

Chick-fil-A has a very attractive business model. But you do need a strong financial position for them to consider you. You also need to be on the young side. They discriminate against more mature people, but not to where they are legally liable. They have that orchestrated perfectly.

I think they are a great company, except for the above reason. I have personal experience with the reason.



Bill
Flagler Beach, FL 32136

Carpe Vino!

Fermentation may have been a greater discovery than fire.
— David Rains Wallace
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: deckeda
Date: November 17, 2011 06:45AM
re: doing something you like to do ... but it's got to be realistic, too

I have an idea for something I think I'd like to do, because it meshes TWO of my hobbies together, but don't see a big market for the "product" (i.e. the service I'd provide). Still, with only 1 employee involved, the workload might be a good match. Haven't worked out the money part, mostly because it probably doesn't exist. It's not a new idea at all, just a service that would do it better and targeting a different customer who wants that.

Overall, I'm tired of being a naysayer and because I don't truly know where it may lead (I'd have the "market" pretty much to myself, which is both good and bad) I'm gonna DO IT (next year, I think) and see if anything happens.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Buckeye_Sean
Date: November 17, 2011 06:53AM
FWIW - I'm into the 3rd year of owning my own business after losing my job as a designer/prepress tech in the offset printing industry. A franchise was never an option for me, but I wouldn't do it anyway after hearing from many differnt franchise owners. So, I started my company from scratch, not really knowing/realizing what I was getting into. (I assume most don't when they start a new business.)

I've been able to grow my business 20-30% every year and while that sounds good, especially in this economy, I still don't make as much as I did as an employee working for someone else. I also work harder/longer hours than I ever did as an employee and have the added stress of paying ALL the taxes, insurance, rent, utilities, professional fees, equipment, materials, etc. Oh, and paid vacations and sick days are pretty much non-existant.

I know the grass looks greener on the other side, but the reality is there is WAY more to it than most people ever consider. I don't regret my decision, as I really didn't have much of a choice at the time. I am proud to have accomplished what I have so far. I have a positive outlook that things will continue to improve and my business will continue to grow, but it has been slow going and will continue to be a lot of work. If someone offered me a decent job for $40-$50k plus benefits right now I would have to give it serious consideration.

Good luck to you.




––––––––––––––––––––––––––––––––––––––––––––––––
MacBook Pro 2.0GHz quad-core Intel i7
IMac 27" 3.4GHz quad-core Intel i7
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: 3d
Date: November 17, 2011 06:55AM
KFC. Everyone loves fried chicken.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: mrbigstuff
Date: November 17, 2011 08:04AM
Franchises are not all bad. If you had got in at the outset of something like a Dunkin' Donuts, you'd be doing well. Hell, at a four corner intersection, it's not unusual to see at least two DD franchises - in one place, there are three.

But, I've been thinking about just such a jump recently, but I'm more inclined to try out some ideas rather than buy a business.


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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: neophyte
Date: November 17, 2011 10:11AM
I recommend The E Myth series of books by Michael Gerber. He tells you all about the pitfalls of starting your own business. Franchises can be quite successful, you just need to be diligent about choosing the one that is right for you. Find a SCORE mentor in your area, and get free advice on how to set up and run a business, and how to get financing backed by the SBA. I am in the midst of this process, so I can't tell you the final outcome, but so far it looks good.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Chakravartin
Date: November 17, 2011 10:49AM
Tell me more about this mentoring thing, please.

This is the site that I found for it:
[www.score.org]

What have they done to help you?
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Trouble
Date: November 17, 2011 11:35AM
Get a McDonalds. Always packed.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: JoeH
Date: November 17, 2011 01:01PM
Quote
Trouble
Get a McDonalds. Always packed.

Only if well run and in a good location. I can point to a few in my area that "always packed" is a gross overstatement. Some from being poorly managed and kept up, a couple others because demographics and traffic patterns changed over the years. Those are issues with buying an established franchise, the owner may be getting out while the getting's good.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Monster
Date: November 17, 2011 01:07PM
a well located UPS store, like the one a friend of mine has in South Orange, NJ. [www.theupsstorelocal.com]





The Taoist Zhuangzi said, "Good order results spontaneously when things are let alone".
The sociologist, and historian, Adam Ferguson described the phenomenon of spontaneous order in society as the "result of human action, but not the execution of any human design".
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Trouble
Date: November 17, 2011 01:23PM
Quote
JoeH
Quote
Trouble
Get a McDonalds. Always packed.

Only if well run and in a good location. I can point to a few in my area that "always packed" is a gross overstatement. Some from being poorly managed and kept up, a couple others because demographics and traffic patterns changed over the years. Those are issues with buying an established franchise, the owner may be getting out while the getting's good.

Doesn't that go without saying? If any restaurant has overflowing trash and roaches in line, I wouldn't expect customers there. I don't know if I have met a McDonalds or Burger King franchisee with a single restaurant. They always have multiples that are doing well.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: JoeH
Date: November 17, 2011 08:38PM
Quote
Trouble
Quote
JoeH
Quote
Trouble
Get a McDonalds. Always packed.

Only if well run and in a good location. I can point to a few in my area that "always packed" is a gross overstatement. Some from being poorly managed and kept up, a couple others because demographics and traffic patterns changed over the years. Those are issues with buying an established franchise, the owner may be getting out while the getting's good.

Doesn't that go without saying? If any restaurant has overflowing trash and roaches in line, I wouldn't expect customers there. I don't know if I have met a McDonalds or Burger King franchisee with a single restaurant. They always have multiples that are doing well.

Doesn't need to be to the "overflowing trash and roaches" stage to be mismanaged and not attracting customers. As for the multiple locations per franchisee, those companies have developed towards that direction. Still a few single franchise locations around, but with the franchisors tending to go with proven franchisees the last couple decades when opening new stores it is much less common. Another trend has been one franchisee buying up another's operation when they decide to retire or get out of the business for whatever reason.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Winston
Date: November 19, 2011 08:36PM
Quote
mrbigstuff
If you had got in at the outset of something like a Dunkin' Donuts, you'd be doing well. Hell, at a four corner intersection, it's not unusual to see at least two DD franchises - in one place, there are three.

Yes, but look at what's been happening to Krispy Kreme.

If you are interested in a franchise, I'd try to get work in that industry for a time, preferably at another store of the same franchise, before taking the plunge.


Good luck.

- Winston



------------------------
Be seeing you.
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: mrbigstuff
Date: November 21, 2011 02:16PM
Quote
Winston
Quote
mrbigstuff
If you had got in at the outset of something like a Dunkin' Donuts, you'd be doing well. Hell, at a four corner intersection, it's not unusual to see at least two DD franchises - in one place, there are three.

Yes, but look at what's been happening to Krispy Kreme.

If you are interested in a franchise, I'd try to get work in that industry for a time, preferably at another store of the same franchise, before taking the plunge.


Good luck.

- Winston

late response...

yes, it's sort of technically correct, what you say, but in practice it's entirely different. people around here (and nationally as well) don't go to Dunkin' Donuts to get doughnuts, despite the name; they go to buy coffee. not good coffee, IMO, but they line up in the dozens for the stuff. I'm pretty sure there's something illicit in the DD brew, I just can't put my finger on it (nor stomach the taste of it for that matter...)
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Re: Looking for advice: Start a business or buy a franchise...?
Posted by: Winston
Date: November 21, 2011 02:48PM
Quote
mrbigstuff
I'm pretty sure there's something illicit in the DD brew, I just can't put my finger on it (nor stomach the taste of it for that matter...)

grinning smiley



------------------------
Be seeing you.
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