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STARTING A SPECIALITY COFFEE BUSINESS - DIY OR FRANCHISE

So, You've been bitten by the coffee bug. It all began when you walked into a Starbucks and said to yourself "I can do that!". You looked at a shiny machine that pushed steam through something you learned was called a 'portafilter'. You saw syrupy looking coffee called 'espresso' slowly stream into a cup that was then filled with steamed milk. The barista added a flavor or two or maybe nothing, put a lid on it and asked for more than three dollars for a drink you knew cost a mere fraction of that. You did the math and thought, "No wonder they've made billions of dollars!" On top of that, the relaxing ambiance, the happy customer who just treated herself to a hot and tasty beverage (or maybe a cold one) all added up to something that made sense and got you excited to start your own coffee business.

Yes, Starbucks is an amazing success story and following their model or something like it appears fairly simple and very profitable. In fact, the gourmet coffee business is one of the fastest growing in the food and drink industry. In more than a few magazines, starting a coffee business has been suggested as one of the best choices as a successful business to start. Compared to other food and drink businesses, the startup costs are one of the lowest. Training is relatively simple and while espresso machines aren't inexpensive (a typical three group espresso machine can cost around $15,000 and up and a grinder runs a few thousand) machines with good reputations (the best are made in Italy) will last for many years without needing to be replaced if they are properly cleaned and maintained.

The biggest issue to consider isn't what brand of espresso machine to buy or whether you will buy coffee beans from a roaster or roast your own. The number one consideration is whether you will create your own business or buy a franchise. After you've logged dozens of hours on the internet, bought a few books, read dozens of magazines and worn out your walking shoes at a couple of tradeshows like Coffeefest or SCAA, it might seem that you're ready to do this without help. But don't be fooled. There is more to do than you can imagine in getting a coffee business off the ground and franchises are a fast track to getting there. In fact, franchises offer much more than a nice logo and a training manual. If you are on your own, making your business profitable in a short time frame is time consuming and costly. Lenders are much more willing to lend money to a proven model and a good franchisor will help you to get the financing you need. While they won't offer the funds and can't promise anything, their business model as well as connections and proven track record are great ammunition when asking for big bucks to start a business. Franchises also have worked the bugs out that you would have to work out yourself if you go it alone. If they are worth their salt, franchisors have tested the equipment, provide operations manuals as well as barista training and offer a big headstart to your marketing needs by having built brand equity - something that small business people overlook. It is true, with patience, perserverance and a little luck, you can develop a business on your own that is successful, but in today's highly competetive specialty coffee industry, having a visible market presence off the ground gives you an edge and with that edge, the time it takes to become profitable can be much shorter.

If you've read this and still decide to go it alone, the best of luck to you. If however you've decided that buying a franchise is a wise business decision, you now have the daunting task of choosing one among a number of strong coffee franchises. My suggestion is to choose a franchisor with a great support system as well as a flexible franchise agreement. Many franchisors in a wide range of industries are strict and don't allow the franchisee to put their personal touch on the business. One franchise that offers great support with maximum flexibility is Sonoma Coffee Cafe. There are many to choose from and doing your homework can't be stressed enough, but choosing a solid coffee franchise like Sonoma Coffee Café can get you where you need to be in less time than if you do it yourself.

TIP 4 THINGS TO CONSIDER WHEN YOUR PERFECT FRANCHISE BUSINESS

If you want to start your own business, buying a franchise from a successful operator means that you are buying into a business system that is already tried and tested. As a franchisee, you will also be provided with substantial sales and administration support and your company will be well branded in the market. All these factors reduce business risk and contribute to the popularity of franchising.

Franchising as a business concept has been particularly popular in Australia. Since its humble beginnings over 30 years ago with the big American fast food chains, franchising has grown and grown in popularity. Australia now has more franchises per head of population than anywhere else in the world. The franchise sector is currently an $80 billion industry and is providing jobs for more than 600,000 people. Nearly 1000 different franchise operations are in Australia at 64,000 workplaces.

The franchise industry is getting increasingly competitive however and there is evidence that some franchisees are even losing money. Consumer confidence has dropped recently and some retail franchises, in particular those in large shopping centres, have felt the pain of rising rents.

However, it is not all doom and gloom for potential franchisees. Franchising will always remain a popular choice for many wanting to own their own business. Figures recently released also reveal that only 5 per cent of Australian small businesses are currently franchised - meaning the room to grow in Australia remains substantial.

So what are the hot growth areas and which franchise businesses will likely prosper in the future?
Below are four ideas to consider when selecting your top franchise opportunity.

1. People are cash rich and time poor. People will rather pay for someone to clean, repair, deliver, maintain - rather than spend their free time to do it themselves.

2. Find a niche. Sometimes, the key to success could be targeting a specific group within a group. An example could be a healthy fast food franchise like SumoSalad.

3. Look past shopping centres. As rents continue to rise, more franchisees are looking at innovative and less expensive locations, such as home based franchises or retail vending machines.

4. Identify your target market and OVER deliver. "What makes any franchise successful is tapping into what consumers are looking for," says John Brown, Western Australian Principal of Franchise Alliance.

10 TIPS ON CHOOSING THE RIGHT FRANCHISE

Starting a franchise is a serious decision. The choice must be well thought of and not random. It is important to take the right step and not have regrets later. So as a business entrepreneur take the right decision by:

1. Finding out all about franchising. Surf the World Wide Web and read as much as you can about franchising its benefits as well as pros and cons. Read magazines and books on franchising too.

2. Researching on the different kinds out franchises in order to choose a franchise that you will enjoy. Any enterprise must give fulfillment and joy just as a writer cannot work on accounts similarly a business entrepreneur must choose to run a business that he will thrive in.

3. Find out what skills are needed for the business you are interested in. never choose a business or model because it is in vogue. Ask yourself:

a. Am I qualified?

b. What is the reach of the product and will it be needed 10 years from now? Think sustainability.

c. How big is the market and what the projected growth potential is?

d. Is the chain local or global in reach?

e. Do the products have universal appeal?

f. In the field how many different franchises are there?

4. Once you have located an industry of choice. Weight your options carefully by studying the pros and cons of every franchise group in the industry. Most industries like say coffee have at least 4-5 successful franchises operating.

5. Contact each franchise and request for information packs. Learn the history, about the successes and failures, the products and services, expansion plans, turnover etc.

6. Meet more than one franchisor in your field of choice. Think did I like them and their attitude. Would I like to be a part of their operations? Did they treat me with respect? Will I fit in their organization?

7. Once you have narrowed down your choice to a single franchise make the effort of doing a thorough back ground check. Find out about the shareholders, directors, financial health, whether they follow the Franchise Association's Code of ethics. And whether fair business practices are in place.

8. Take the professional expertise of experienced franchise accountant, lawyer and bank. Prepare a solid business plan. Weigh the pros and cons of finance options. Get the lawyer to read through the companies franchise agreement and ensure that your rights are protected.

9. Before you sign an agreement survey your locality to find the ideal spot to set up your business.

10. Think about whether you want to start a fresh franchise or purchase one that is already running and up for sale.

Take decisions professionally. Consult your family too! Begin your life as a business franchisor on the right foot and work towards running a healthy and profitable business.

WHAT TYPE OF CORPORATION YOUR COMPANY BE ?

When you are setting up a Company one of the most important things you can do is determine if you need to incorporate. If you are new in the business world then you should talk to two professional before you make a decision. First talk to your bookkeeper or CPA (Certified Public Accountant) they will be able to take your business plan and determine which type of corporation will give you the best tax advantages, select the wrong one and you could end up paying unnecessary taxes.

Then you need to find legal counsel to help do the paper work for the type of corporation that you have decided on. This paper work includes the all state required forms to register legally and properly. Most legal counsel will also fill out your Employers Identification Number (EIN) with the federal government. It is very important that you use legal counsel because any error in the paper work could delay your being open for business because you cannot ever open a bank account without this paper work.

Here is the important information that you should know about each type corporations and pros and cons for each:C Corps: This is for a large company that is going to have a lot of shareholders involved in the corporation. C corps are more expensive to start up and require lots of additional legal advice because of the increased regulation generated by both federal and state government.

The main difference with a C Corp versus other corporation is that the profits of the company are taxed at a corporate level, which is substantially lower than the personal tax codes. The biggest disadvantage to a C Corp is that if you distribute the profits to shareholders through dividends, those are also taxed and you are in essence paying taxes twice on the same money.

Sub S Corp: This is a classification for a company that either wants no shareholders or wants no more than 100 shareholders. Taxes are also done differently, they are done on what is called a "pass-though" tax. This means that profits the company makes are not taxed on a corporate level, it is "passed-thorough to the owners of the S Corp. So the profit is equal divided between the officers or shareholders and added to their personal tax return. This is great unless you get to the point where your tax returns are pushing you towards the Alternative Minimum Tax (AMT) bracket; make sure you that you are advised on how this can affect your taxes.

LLC: An LLC (Limited Liability Corporations) are a combination of both a C Corp and an S Corp. It has the structure protection of incorporating without the restrictions placed on an S Corp. Many overseas investors find that this type of corporation is the best way to go. The taxes are done on a "pass-through" basis also.

The one thing that all these corporations have in common is you are setting up a separate legal identity for your company, which will protect you and your personal assets from business debts so if your company has financial problems they will not affect your personal finances. No matter which one you choose you should always consult expert help in determining which type of corporation will work best for your needs.

8 KEYS QUESTIONS POSED IN APPROACHING A FRANCHISOR AND A FRANCHISE OPPORTUNITY

These day's many individuals are increasingly interested in starting their own business and some are choosing franchising as it offers the opportunity of using a proven reliable business method. However, despite the low failure rate of franchises, like any other business venture, it is not completely risk free so it is important that individuals opt for the right franchise partner to support them from the very beginning and for the long haul.

The following question arises: if you have no prior experience in relation to the franchising industry, how can you be sure a particular franchise is the right option for you? The following answers to posed questions should provide basic information relating to choosing the right franchise partner and the possible questions you need to be asking any potential franchisor about a franchise opportunity.

1. Should I research the franchise industry?

Yes, yes and yes again! It is paramount to research the franchise industry if you are interested in a particular area of franchising, for example fast food pizzas or health and fitness business ventures, to research this area methodically.

You can research a particular franchise industry via on-line franchising directories, franchise magazines and on-line franchising resources. Find out as much information as you can, by visiting reputable franchising sources such as International Franchising Association (IFA) for advice and guidance on your area of interest. Sign up for weekly newsletters, subscribe to regular news articles, and be informed as you can about your area of franchising interest.

2. Have you prior business experience?

Perhaps one of the most important elements in deciding if you are right for franchising is to assess your own personal and professional skills in a self critical manner. Do you have prior business experience? Are you self-motivated and ambitious? Are you a leader?

Write down all your relevant skills and assess these skills critically. Then assess these skills according to guide lines set out by the International Franchise Association, and by the potential franchisor you are interested in approaching. Remember every franchisor will have a set of predefined franchisee requirements and you must meet every one of them in order to be successful in your attempts to buy into a franchise opportunity.

3. Can I talk to other franchisees?

Yes you can! You can approach existing franchisees in a professional way, by phone, email or in person. Be confident and certain of what you want to ask them. Have a set of questions written out so you are prepared to find out as much as you can about a potential franchise opportunity.

This is particularly beneficial and will give you good insights into how a particular franchise operates and how successful the franchise is. Ask them to be honest and find out the pros and the cons of the job. This will help you evaluate whether it is the right franchise for you.

4. Is there training offered?

All franchisors will provide potential franchisees with expert training seminars, on-going support and advice in the initial stages of your franchise operation. However, every franchisor has a different training scheme, and you must be aware of what individual franchisor's training covers, how long for and if there is any on-going support involved in the long term operation of your franchise.

The best training programs will cover all parts of running the day-to-day business activity, from market knowledge and stock management to merchandising expertise. Be aware of franchisors offering limited training, which suggests that a franchisor may not be interested or committed to your franchise and its success.

5. What support will be offered?

A good franchisor will offer effective support networks to optimize the success of your franchise. This should extend beyond the introductory training and the better franchisors will provide dedicated staff to ensure on-going support is at hand whenever needed.

Also good franchisors should help with attracting your initial customer or clientele base, by offering excellent media and PR campaigns, contacts and databases of customers you can attract. Furthermore, generating income on a daily basis should also be a requirement of your initial franchise, and support and assistance on generating this initial income, should be made available through your franchisor's support network.

6. What are my likely earnings?

It is important to remember like any business venture, you must be realistic when you decide to enter into a financial agreement with a franchisor, and to be specific as to what you can earn realistically in your first year. Ask to see business annual forecasts and sales histories of the franchise opportunity you are interested in becoming part of. This will be an excellent guide to do your own calculations for your franchise opportunity.

7. Can I see sales histories?

Yes you can! This is an excellent way to indicate future earnings and the best way to analyse other franchisee's sales histories. This will allow you to gain a realistic picture of the likely health of your business before you take over ownership. Despite all of this, you must put in a whole hearted effort to be committed and motivated to your business venture in order to make a positive ROI.

8. What involvement will I have with other franchisees?

Alongside the support given from your franchisor, support and advice will also come from other franchisees. This type of networking provides important opportunities to discuss problems, ideas and successes. In addition conversing with other franchisees will provide inspiration and motivation and create a sense of working with a team.

It is important to remember when deciding to enter into a franchise agreement that you have methodically researched the particular franchise industry you are interested in, and you are aware of the pros and cons associated with this franchise opportunity. Make sure that this franchise will work for your benefit, since this is your livelihood and that of your family's. Anything you can do to increase your knowledge of an industry sector will be advantageous in the long run. The best of luck!

SIGN FRANCHISE PUTTING UP BIG SALES NUMBERS

The sign industry over the past 10 years has had tremendous growth. The growth of the sign industry has been made possible by solvent and inkjet printing. In the full sign business, inkjet printing has become a vital part of the process.

It is estimated that the sign business is now taking in over 8 billion dollars a year. The industry has made its place in franchise fields that reward their owners. Are you looking for a place in the franchise industry? Have you ever thought of creating signs for businesses to be a rewarding and profitable field? Well, it's time to start realizing the potential of these businesses.

Places such as Sign Biz, Signs by Tomorrow, Fast Signs, and Have Signs are all showing big profits year after year. You don't have to be technical savvy or have large overhead budgets, all you need is a little creativity and a strong work ethic.

Making good use of computer-based methods, Fast Signs offers innovative graphic and sign solutions. The franchise has over 20 years of experience in the industry, and has close to 500 franchised units to show its experience and vision. Few employees, short business hours, low seasonality, and large availability of territories is just a few of the reasons why Fast Signs has an advantage over others in the industry.

Since 1989, Sign Biz is another big player in the industry. It has been its own mark by offering extensive start-up assistance to its franchisees and using different software methods then other franchisors.