Author: Paul Segreto

Passionate About Fueling Entrepreneurial Spirit; Entrepreneurship Coaching; Management & Development Advisory & Consulting; Franchises, Restaurants, Service Businesses; Thought Leader, Influencer, Content Creator & Author.

Top Five Social Media Tips For Small Business

The following article was written by Guest Author, Linda Daichendt. Linda is Founder, CEO and Managing Consultant at Strategic Growth Concepts, a consulting firm specializing in start-up, small and mid-sized businesses, and a Strategic Partner of franchisEssentials. She is a recognized expert with 20+ years experience in providing Marketing, Operations, HR, and Strategic planning services to start-up, small and mid-sized businesses. Linda can be contacted at linda@strategicgrowthconcepts.com and the company website at www.strategicgrowthconcepts.com.

Top 5 Social Media Tips for Small Business
by Linda Daichendt
as posted on Marketing With New Technology July 16, 2009
(Please Note: some content in this posting is from an article by Mya Frazier for Bankrate.com)

A few years ago, using the Internet to market a small business simply meant to create a presence online with a simple, informational Web site. Then came the demands of search engine optimization to ensure Google and Yahoo searches yielded top-ranked results for your company. Was your business’s Web site chock full of the key search terms that would bring it to the attention of customers?

social-media-trendsToday, social media is transforming the small-business marketing landscape. Social media are Web- or mobile-based tools for sharing and discussing information. It’s not just for seeing who your high school sweetheart married. Businesses can tap into powerful networking sites and other social media to drive customers to their shops or companies.

If done right, small-business owners might even be able to slash their traditional marketing spending to zero. Writing blogs (short for “Web logs”) or on-going online commentary using social-networking sites, such as Facebook, MySpace, LinkedIn, Twitter and YouTube, can provide inexpensive but powerful online marketing.

Because it’s free, people think it’s easy to create a social media presence. But this attitude can lead to missteps. So before you dive headlong into social media, take some time to observe the customs and social norms of these new forms of communications, says David Spark, founder of Spark Media Solutions, a San Francisco-based firm that helps companies tell their story through social media. “Also think about your strategy for effectively utilizing social media before you jump in,” says Linda Daichendt, CEO/Managing Consultant of Strategic Growth Concepts. “It’s easier to avoid costly mistakes before you begin than to correct them after they’ve done damage to your company’s reputation.”

New_rules_of_marketing_and_PR“Think of social media as a cocktail party,” says, David Meerman Scott, author of “The New Rules of Marketing and PR” and “World Wide Rave,” books about how to create buzz online. “You don’t go into the cocktail party and go into the middle room and scream at the top of your lungs and say, ‘Buy my products.’ … What works is you have some meaningful conversation first. And that’s just how social media works.”

If you decide to take the social-networking plunge, here are five ways to harness social media to help your business.

1. Use free sites. Use free online services, such as the mobile short-message site Twitter, and popular networking sites Facebook and MySpace, to post significant news, specials or events. For example, you run a small Italian restaurant with a loyal following. You could create a Twitter account and upload the lunch or dinner specials via “tweets,” or short messages of up to 140 characters, daily to customers’ smart phones or to other Web sites.

“All you have to do is give a (Twitter) handle and start a conversation. You could put the Twitter handle on the menu or in the restaurant,” says Chris Abraham, Abraham Harrison LLC, a Washington, D.C.-based digital public relations agency. Granted, social networking sites are still for early adopters. “You aren’t going to get Aunt Matilda to tweet about the experience she had at dinner,” Abraham says.

Abraham considers Twitter one of the easiest ways for a newbie to social media to get started. “It’s more challenging to do Facebook,” Abraham says. “You have to create a personal profile, create a page and so on. With Twitter, if you’re Joe Smith with Motorcycle Emporium, you don’t have to create a page. And you can create Twitter updates via a phone or mobile device easily.”

“Don’t try to reinvent the wheel,” he says. “There are lots of people sold on really expensive solutions, but two of the best investments for reaching out to people and engaging with them are free on Twitter and Facebook.”

2. Shift marketing costs to social media. After learning how social networking operates, use social media to free up traditional marketing dollars for your small business by putting it online. You can quickly learn which of your Facebook or MySpace “friends” or online “group” members received and responded to your message.

Stanya Doty has cut her print marketing budget to zero. As owner of Simple Indulgences, a wine and high-end gift shop in Delaware, Ohio, she began using Facebook in December 2008 to communicate with her brother but quickly realized the online marketing possibilities.

“I thought, ‘Oh, my gosh, there are so many people here,’ ” she says. Indeed, Facebook boasts 200 million users worldwide. In April 2009, she began promoting monthly wine tastings via a Facebook page for the shop that quickly attracted 100 members. Combined with an e-newsletter created using the do-it-yourself, e-mail marketing Web site Constant Contact, she keeps enough buzz going about her shop that her advertising budget for local print ads no longer seemed necessary. She usually sends out about 700 e-mails, with the response rate sometimes reaching nearly 50 percent. It sure beats a postal mailing. “If I sent out a postcard with postage and paid for all that, I’d still have no idea who read it and who threw it away,” she says.

Indeed, unlike a print ad, Doty gets instant, measurable results. “On Facebook, you can see who has responded to invites,” she says. “It’s easy, it’s cheap and I’m actually appealing to people that at first know me from the store and then hopefully … pass the word along throughout their networks.”

google-yahoo-thumb23. Do your own social-media optimization project. Learn about the competition in your industry and geographic region that are tapping social networking. Spark recommends starting by researching the competition in the major search engines — Google and Yahoo.

“Type in keywords and phrases that people would use to find you, like ‘plumber’ and ‘San Francisco.’ If you don’t appear in the top percentage of pages, take a look at the Website of those plumbers that do show up,” says Spark. “Look at their pages, and usually they will have a lot of content on their sites.”

To increase a business’s presence on the Internet, Spark advocates companies create blogs, newsletters and other articles on their sites to bolster the number of keywords — terms that search engines recognize — to boost their ranking in all-important Web searches.

“That’s the way people discover you,” he says. “Take that plumber in San Francisco. The right search terms might just be ‘clogged toilet and San Francisco.’” “That tells me I should write … in my blog about how to fix a clogged toilet and mention that I am a plumber in San Francisco,” he says.

4. Take social-network marketing to the next level. Create and post richer content about what your customers would expect from someone in your business. Don’t view social media sites as a place to simply hype your wares. It’s a place for conversation.

“Social media is about earning attention,” says David Meerman Scott, author of “The New Rules of Marketing and PR” and “World Wide Rave,” books about how to create buzz online. “What’s most important is to forget about what your company does. Instead, think about the people who are buying your products. Simply hyping products and services online and in social media sites completely backfires. People are not looking for products but for something fun. They are looking to make connections,” Scott says.

So it’s all about having something interesting to say or show. It could be a blog, or a video on the video-sharing Website YouTube.

For example, if you’re a caterer, instead of talking about your service, create engaging culinary content. Imagine positioning yourself as a gourmet magazine on the Web, complete with links to a video you uploaded to YouTube.

“A caterer could create a blog with information about how to create a fantastic party, and each blog post or YouTube video could be another installment,” Scott says. “On the Web, you are what you publish and being on the Web is about publishing information.”

So back to that plumber faced with the prospect of dropping an expensive Yellow Pages listing but worried about customers not finding him if they have a burst pipe or a misfiring shower head. Scott recommends the plumber post a list of “the 100 home fixes for common plumbing problems.”

“All of a sudden you are going to get indexed very highly in the search engines, and people are going to share that content with their friends,” he says. “When someone puts an update on Facebook asking if anyone knows a good plumber in Boston, a friend might point to your content.”

blogging5. Use blogging to drive search results and help new customers find you. Lately, blogging has gained greater attention, with the advent of “micro-blogging” on Twitter. But consider the time commitment and strategy before launching an account.

Even with the spread of micro-blogging, Abraham remains a big fan of traditional blogs, which are lengthier and show up on Web sites. In general, no matter what form the blog takes, it should be consistent over time.

“If you can’t keep up one (blog) post a day or 12 tweets a day, do one tweet every Thursday. Consistency in blogging or tweeting will create a relationship of trust with your followers or readers. Do it once a week, but for the next two years,” Abraham says.

And don’t spend extra money on blogging software, technical help, or a ghost writer for your blog. To get started, sign up with WordPress.com or Blogger – both are free blogging platforms which are easy to use for beginners.

Additional opportunities within the social media environment include: online radio shows on platforms such as BlogTalkRadio, social networking sites such as LinkedIN, Plaxo, and FriendFeed, and a wide variety of additional tools as well depending on your type of business.

Following these social media basics for small business will get your company started on the right road to gaining new customers and increased revenue via social media.

Franchising & Entrepreneurship: The Debate Continues…

franchisingRecently, I posted the article “Are Franchisees Entrepreneurs?” and received plenty of comments defending both sides of the equation. Some seemed to justify their current status as a franchisee as being entrepreneurial while others were emphatic that entrepreneurs are too independent to be franchisees. Franchisors, yes! But definitely not franchisees.

Last week on Franchise Direct the following article, “Entrepreneurship vs Franchising” was posted, and the debate continues…

Entrepreneurship vs Franchising
By Donald Cranford
as posted on Franchise Direct (July 7, 2009)

Given the state of the economy, it’s perhaps a good time to reconsider some of the myths of entrepreneurship to see whether the small business dream holds the same allure it once did. Certainly the days where all you needed to get investment in an internet business was a quirky idea are gone the way of the buffalo. If anything, the death of this kind of entrepreneurship makes the best possible case for franchising.

Some of these thoughts came to us after reading a highly interesting piece in the Harvard Business Review by Walter Kuemmerle, an associate professor at the Harvard Business School in Boston. Although he was writing in 2002, most of the points Kuemmerle makes are still relevant in 2009, if not more so.

entrepreneurshipIn his piece, Kuemmerle seeks to outline the various risks and challenges that a prospective entrepreneur will have to take on to truly succeed. Kuemmerle wants to force business-people to look in the mirror and ask themselves: is this really the model I want to follow to achieve my personal business dreams? The converse to his questions are: is franchising a better business model?

Kuemmerle outlines two entrepreneurship risks/questions that we hadn’t even considered:

Are you comfortable stretching the rules?
Are you prepared to make powerful enemies?

The former is particularly compelling argument against entrepreneurship. Those first two or three years of getting a business going involve taking huge financial risks, and in many cases, hounding off creditors, juggling debt on personal credit cards and even leveraging your family home in order to keep the business afloat. This is a reality that most entrepreneurs simply accept, but it brings great risk and peril to your home life, especially in this recession. But as Kuemmerle says, most success stories for start-up’s he knows include the use of outrageous tactics. Or Kuemmerle later asks: “Do you have the stomach for subterfuge?”

He also points out the fact that having a truly successful start-up often means brushing up against powerful enemies. Kuemmerle adds three other points about the need to be flexible, decisive and incredibly patient to make it as entrepreneur.

Now while all of these skills are generally needed to run a strong small business, the fact is the franchising model eliminates many of the risks and indeed dangers that are part and parcel of launching a start-up. With a franchise, you have a proven business plan and a source of support and knowledge from the franchisor. Some entrepreneurs may disagree with the concept of a franchise fee, but really it is nominal compared to some of the outrageous leaps involved in entrepreneurship. It’s a time for hedging your bets and as Kummerle concludes:

“Being an entrepreneur isn’t for everyone, and even those who have the right stuff find the path to success much rougher, and usually, much longer than they had anticipated.”

Note: Another interesting article surrounding franchising and entrepreneurship was also recently posted on franchisEssentials, “Startups: Do We Really Need Them?”

We’re looking for your comments and insight:

Are Franchisees Entrepreneurs?
Startups: Do We Really Need Them?

Accountability Begins With Respect

The following article was submitted by franchisEssentials Guest Author, Diane Helbig. As a certified, professional coach and president of Seize This Day Coaching, Diane works with people starting their own business, salespeople who need and want to improve their skills, and business owners who want to master challenges and realize greater success. She is also co-founder of Seize True Success, a coaching practice dedicated to helping franchisees grow and prosper.

Accountablilty Begins With Respect
By: Diane Helbig

Many small business owners struggle with making their staff accountable. They know what they expect their people to do. And, as long as everyone’s performing effectively, all is well. The trouble occurs when someone falls short of the owner’s expectations.

respectThe struggle is rooted in fear – fear of confrontation, consequence, repercussions. The solution is rooted in respect. When you respect yourself, your staff, and your customers, you’ll find accountability easier to achieve.

1. Respect yourself – This sounds simple, and it is. You should have a healthy respect for yourself. You took a chance and launched a business, putting your ego, income, and reputation on the line. At the same time, you’re not superman (or woman). When you respect yourself, you appreciate your accomplishments and own your limitations. When you respect yourself, you understand that you have a right to expect reasonable levels of performance and attitude from others.

2. Respect your staff – They are working with you to help you realize your vision. They bring valuable skills and sensibilities to your organization. You respect them when you have clear, written expectations and consequences – not only for their job function, but for their behavior and attitude. Have enough respect for them to let them know what you want. At the same time, have enough respect for them to remove obstacles, especially when those obstacles are co-workers who aren’t up to par. Put yourself in their shoes. How do you think it feels to consistently do a good job while Susie over there skates? In addition, respect them enough to believe in them. After all, they believe in you.

3. Respect your customers – They are the reason you and your staff are able to do what you do. When you respect your customer, you are aware of anything that can have an impact on them. And, rest assured, they’ll know if you are or are not making your staff accountable. It’ll show in their work, their attitude, and most of all – in yours.

A healthy respect goes a long way. If you’ve made your expectations and the consequences clear, and someone isn’t up to snuff, when you keep them anyway, you are doing a disservice to you, them, their co-workers and your clients. Making people accountable is the respectful thing to do!

About the Guest Author: Diane is a COSE Mindspring editor and writer for www.examiner.com. She is also a member of the Top Sales Experts panel at www.topsalesexperts.com. Diane is also a contributing author to Chicken Soup for the Soul: Power Moms. Diane earned a BS in Social Science from Michigan State University and received her coaching certification from The Coach Training Alliance. To learn more about her coaching practices please visit www.seizethisdaycoaching.com or www.seizetruesuccess.com

Talking PR, Franchising & Social Media with Arment Dietrich CEO, Gini Dietrich

PR Adapt or DieAs we do quite often, Gini Dietrich, CEO at Arment Dietrich PR, and I, communicate on Twitter, on Facebook, by email and by phone, about a multitude of things, both business and personal. Sure, we banter and kid a great deal along the way. But when the discussion turns to franchising, communications and social media, the kidding quickly subsides, and the conversation turns serious. Okay, not completely serious, because we’re both smart-asses. But serious to the point that we’re anxious to share our ideas with each other, and determine ways to share them with our franchise clients and the franchise community.

Recently, I turned one of our discussions into an informal interview, and asked Gini to share some of her thoughts, so I could share the same with the franchisEssentials readers. Always being shy and not wanting to be in the limelight (yeah, right!), Gini fired off her responses without hesitation, further demonstrating her passion, and conviction in her thoughts. I just loved her response when asked about the future of public relations, as we know it today. Well, decide for yourself as you read some of the Q & A below.

Paul: “How important is a communications strategy to franchise organizations today?”

Gini: “It’s not at all important. Ha! Just kidding. To use one of my favorite quotes by NPS senior news analyst Daniel Schorr, “If you don’t exist in the media, for all practical purposes, you don’t exist.” But in today’s age of digital technology, it’s not just the traditional media strategy that a franchise needs to have. I love the case study of the companies that made it through the Great Depression. Know what they all had in common? They didn’t cut their communication. In fact, they increased it. And the companies that did that then are still around today while their competitors, who cut their communication budgets, went out of business. Like Daniel Schorr says, if you’re not communicating, how will your customers know you exist now and into the future?”

Paul: “Is it important for local franchisees to have a communications strategy in place or is it sufficient to only have it at the franchisor level?”

Gini: “I’m a HUGE proponent of local franchisees having a strategy in place that is complementary to what the franchisor is doing. Consider most reporters won’t cover your business unless there is a local angle. Most local baseball teams are sponsored by local businesses. The Mayor won’t show up to your ribbon cutting if you’re not giving back to the community. Add into the mix social media and you know that people buy from people and want to have a relationship with the people they do business with…not the company or the brand. The person who buys your product or service in his/her community, wants to have a relationship with the person running that entity, not the corporate monster.”

Paul: “Is public relations, as we have known it over the years, changing to adapt to a more “connected” society?”

Gini: “There has been a lot of discussion about whether or not public relations, as an industry, is dying. Most PR people (as evidenced by a recent IABC poll) deny it’s happening and are content with doing their jobs as they’ve always known them. I contend social media is changing the way we communicate and PR, as we know it, is dying. Regardless of PR professionals thinking social media affects the way they do their jobs, someone has to own it – be it marketing, PR, or advertising. I’d rather jump on it now and own it. After all, social media is about developing and fostering relationships with customers, stakeholders, employees, influencers, and individuals. Traditional PR is about developing and fostering relationships with media and influencers. Makes sense to me that it fit in with PR.”

Paul: “What role do you see social media playing within the franchise community?”

Gini: “I love, love, love what Tasti D-Lite is doing with social media. I use this example all the time. They have a store in the Empire State Building. Whenever someone tweets that they are in or near the Empire State Building, @tastidlite sends them an offer to come into the store. In some cases, they offer a free frozen dessert. In others, a discount. This has helped them build in-store profitability, loyal customers, and their intensely passionate following. This is SO EASY to do at the franchisee level. This is just one example of how social media helps build a franchisee following. Get out there and try it. It works!”

CEOs and Social Media

Today, Gini Dietrich, CEO at Arment Dietrich PR presented an interesting question on the company blog, F.A.D.S. (the Fight Against Destructive Spin), “Should CEOs Spend Time On Social Networking?” Of course, always having to add my two cents, I responded accordingly.

CEO“I would be surprised if any CEO of a publicly-traded company had a social media presence. The reason I say this is because of the SEC and FTC.

The SEC has certain rules about information being presented and disclosed to the public and the CEO would need to be extremely careful as to what he or she communicates, even through his or her own personal social networking efforts. From a liability standpoint, I’m not sure the benefits outweigh the potential downside.

With respect to the FTC, the issue here is the marketing message and how it can and may be perceived. Currently, the FTC is considering guidelines and rules about marketing messages being conveyed through social media. Again, as the leader of a public company, the CEO must tread carefully and, even in conveying a marketing message, must be very careful not to break any SEC rules. Again, the benefits need to be weighed against potential consequences.

All that being said, I stongly believe public companies should have a major presence in social media, including social networking, letting the marketing experts spearhead the activity and content. While doing so, I do believe the CEO could, and should, participate strategically with key, well-defined content, more to enhance the overall effort as opposed to being front and center.

Now the flipside, private companies. I do believe CEOs of private companies need to be as transparent as possible. They’re usually the vision and drive behind the company. His or her thoughts and statements lend a great deal of credibility to the company, which ultimately may be defining factors in a customer, client, vendor or partner doing business with the company.

Often, the CEO, “is” the company which why we see companies named after the Founder and CEO. Many times, the CEO is actually the “commodity” being sold by the company. This is especially true with professional organizations, consulting companies, etc.

Service and product driven companies are different as there are usually consumers or clients as end-users. As such, they rely on the “personal guarantees” of the CEO and that message usually needs to be promoted to drive business. I’m thinking along the lines of George Zimmer, CEO of Men’s Wearhouse.

When it’s all said and done, there are few, more efficient ways of promoting a business, large or small, than through social media, and social networking. The messages are concise and clear, and often present the human side of the business. And, clients and customers alike, feel more confident “knowing” the CEO and his or her thoughts, feeling more comfortable with their decision to do business with the company or organization.

Here’s a simple, yet totally unscientific rule of thumb: If a business needs to have the CEO’s personal guarantee on loans and lines of credit, then the CEO should be very active in social media and social networking activities. If the company can enter into loan and credit agreements without any personal guarantees, it’s best to leave the social media and social networking efforts to the marketing experts.”

Please note: CEOs of franchise organizations also need to be careful not to present inadvertent earnings claims in any social media activities.

Understanding Social Media Metrics

bubblus-social-mediaSocial media is exciting, and is finally being embraced by franchise organizations. Many are beginning to test the waters, albeit very cautiously. Some have been pleasantly surprised and wonder why they didn’t venture in this direction sooner. Others, have been quite confused but are reluctant to give up. Perhaps if they could quantify and analyze their efforts, they would be more confident in their efforts. But where do they start?

First, they must understand some key factors regarding the metrics of social media in order to be able to plug in numbers that make sense. Certain elements of social media metrics need to be defined, that may ultimately convince them and the rest of their management team, there is value in creating “noise” online.

So, let’s take a look at key social media metrics as the first step towards quantifying and analyzing social media efforts. Once understood, it will be easier to track trends and results.

Volume – The number of comments, blogs, posts, tweets, links, etc., about the brand, the competition, and the industry segment.

Sentiment – The positive, negative, or indifferent consumer reaction to the brand or a topic, which can be measured by text analytics and natural-language processing.

Emotion – The reasons that a consumer felt, good, bad, or indifferent that point how the company can resolve his / her problem or how the business can change and improve.

Topic / Issue – The context (e.g., product, customer service, advertising, competitor, etc.) in which the brand is being discussed. Nielsen’s Brand Association Map helps visually associate the relationship between terms; a Google AdWords keyword-expansion tool helps improve the relevancy of the company’s selections.

Source – Where the conversation is occurring (e.g., Twitter, blog, discussion board).

Author (Influencer) – The people talking about the brand and their social media impact (e.g. number of followers, readers, commenters).

Virality – The reach of the brand and relevant topics around the brand (e.g., how many people are reading, posting, linking, and sharing).

Source: Alex Burmaster, Nielsen Online

Local Marketing Challenges: What is a Franchisee to do?

No TomorrowI believe the most common local marketing challenges in a franchise organization are the typical franchisee’s lack of marketing 101 skills, their inability to develop a defined marketing strategy, and certainly their inability to execute any marketing plan. However, let’s be fair. They may not have learned about marketing and marketing strategies.

Now, here’s something that franchisees do know something about, and that’s making things happen. Unfortunately, many franchisees don’t have the drive to do whatever it takes to make it happen as it sometimes means integrating their local marketing efforts with grassroots, guerilla, word-of-mouth, or as I like to refer to it as “get off your ass” marketing.

Many franchisees find it necessary to stand behind the counter and serve the customer when they would better serve the business by getting out from behind the counter and mingling with the customers, visiting other businesses, participating in community events, etc.

The major challenge is that most franchisees refuse to take this approach, feeling they’ve made a large investment and the business should come to them, or put the responsibility on the franchisor, or are just lazy and would rather wait for tomorrow. Well, as Garth Brooks sings, “if tomorrow never comes…” Instead, they need to make it happen today and forget tomorrow, as if there is no tomorrow!

Controlling Brand & Trademark within Social Media: What to do if franchisees got there first

trademark protectionI was recently asked to share my point of view on how a franchise brand can — or even should — wrest control of their brand on social media destinations when franchise holders have been early entrants.

Here are my initial thoughts:

As is typical in most franchise agreements, there’s most likely a clause regarding use of the brand name and trademark. It may need some interpretation to Web 2.0 usage, but there should be no problem applying the language in this regard. Also, online branding falls into marketing, and ultimately, advertising. I’m certain franchise agreements provide typical clauses that prohibit franchisees from utilizing non-authorized ads, etc.

All that being said, it’s always best to convince rather than demand. If the organization is large, it may be more effective to work through advertising cooperatives and franchisee advisory councils in pushing anything regarding social media. One strategy could see the franchisor contributing financially to a social media strategy. (Much cheaper than legal expense to enforce clauses in franchise agreement; not to mention “expense” of diminished morale) As incentive to initiate the same, franchisees would need to voluntarily relinquish their online identities so the parent company may establish one facebook page, one twitter id and one website.

I would recommend developing a template for franchisees to use that would piggyback off the national identity. For example, if corporate identity is Zippy Lube, the franchisee could use Zippy Lube NY or Zippy Lube NY 101 or Zippy Lube Jamaica NY and so on. Each franchisee could have their own web page linked to company website. It’s important to maintain uniformity and a sense of organization when attached to company brand or when linked together.

Please share your thoughts below. Thank you.

Franchise Sales During the Recession

WSJRecently, in one of the franchise groups on LinkedIn, there was some discussion about the Wall Street Journal article, “Franchise Sales Pull Back During the Recession.” Several franchise professionals posted their comments and, of course, I added my “two cents” as well. Okay, I was definitely long-winded compared to the others, but as most of you who read my articles are well aware, I have a passion for franchising and franchise success and tend to go on and on to share the same with all who will “listen.”

“I too, believe there are many well-qualified candidates exploring franchising. Some as a career alternative, and also, in the case of already being a small busines owner, as a business expansion strategy and/or an income diversification plan.

No doubt, the number of overall franchise leads has diminished quite a bit. But I believe many of the “tire kickers” have gone by the wayside while the more qualified candidates continue to search, inquire and ultimately decide franchising is right for them to achieve their goals and objectives. However, in order to fully realize this trend, one must realize that the candidates’ approach has evolved.

Today’s qualified franchise candidate is more sophisticated, educated and technologically advanced than we have ever seen before. Add to the mix, a sense of extreme caution, and their process in exploring franchising and specifc franchise opportunities has become more of a detailed, well-thought out strategy.

Always understanding that there is risk in any entrepreneurial endeavor, today’s candidates explore franchising because it may provide even the slightest edge against failure. Their mantra has become, “failure is not an option” and they now live it by doing everything humanly possible to dot every “i” and cross every “t” and then rechecking only to do it over and over again until they have full, complete confidence in their decision.

To that end, the overall process from initial inquiry to franchise award is much longer than in years’ past and that is something franchisors must be prepared to effectively handle. It’s a primary reason I believe social media works so well in the new era of franchise sales as it creates an environment for today’s candidates to research organizations, share information, communicate with individuals at all levels of the franchise organization from franchisees to corporate executives, view photos, audio and video, etc. And, they can do so at their own pace and to their full understanding. That is the key.

Understanding and adapting to today’s qualified franchise candidate will help franchisors ride out this current economic downturn. Putting their heads in the sand and just complaining about the poor economy and the franchise candidate pool drying up will only incorrectly prove true that their negative thoughts are correct.

All that being said, certainly there are challenges in securing financing and other variables that must be contended with and addressed accordingly. But as the franchise candidate pool diminishes and many of the tire kickers aren’t around to waste our time, we should now have more time to explore all options, use our creativity and innovation, network beyond our comfort zones and seek out alternative solutions. I believe those solutions are out there and many are capitalizing on them as we speak. They will not only survive, they will thrive as others have done in other recessionary periods.”

Opinions, Insight and Perspectives on Franchising

I recently posted a question on Linkedin that addressed the primary reasons to explore franchising. Below please find several of the responses from a cross-section of industry and non-industry professionals . As I have done in the past, the names of the responding individuals will be kept confidential. Instead, they will only identified by their Linkedin statement or profile.

doors-optionsWhat is your opinion of franchising as a business model, business expansion strategy and as a career alternative?
as posted in the Q & A section on LinkedIn under Franchising

An SAP Consultant with some franchising experience obviously has done his homework and offered valuable advice as well as sharing some real life experiences.

“I have studied business and many individual businesses personally. I read many business cases and books and have a deep interest in business models and how they work in the current market.

First of all, check out the book ‘The E-myth Revisited?’ It is a very interesting way of viewing a business model. It describes the benefits of the franchise way of doing business.

I also have been involved in a few franchise opportunities, most recently, I was looking to purchase a tanning franchise. The business model was highly tuned, the computer system was revolutionary and perfectly adapted to the business through many years of iterations. The computer system alone would allow you to manage multiple stores with very little hands on control. The power of the franchise itself brought purchasing power and brand recognition which would have been difficult to built independently. The small percentage of revenues to fund regional advertising brought in enough business that I could have been almost completely hands off while still turning a sizable profit.

In short, most entrepreneurs work IN their business, but at a point you need to delegate so you can work ON your business. And franchising is a marvelous way (for most businesses) to grow exponentially.”

This next response if from a business coach that specializes in guerilla marketing strategies. Before I even read her response i knew I would agree with her perspective of franchisees needing to be prepared to work hard despite buying into a system. How true, indeed.

“I think that Franchises represent an great opportunity for some people. They can provide an excellent template for success, as well as resources and support as you are growing your business. That said, opening a franchise is just like starting any other business from the standpoint that you must have a clear idea as to how you will drive customers to your product/service. A franchisor will provide you with the tools and a blueprint, but you are going to have to do a lot of the heavy-lifting yourself. Make sure you are prepared!

Before committing to any franchise, talk to some of their current (and former!) franchisees. Don’t just call the people the franchisor tells you to call; reach deeper into their list of franchisees. Develop a list of questions that you can ask that help you to understand whether this particular franchise is going to be a good fit for you.

Lastly, if you are someone who doesn’t really like “rules”, you may want to think twice about franchising. What makes franchises work is that things are delivered consistently. That can be a good thing, or a bad thing, depending on how well you follow rules!”

An entrepreneur who previously founded a small franchise company offered his view which it appears may have been formed by some entrepreneurial types that entered into a franchise agreement with his franchise company. Personally, I do not believe true entrepreneurs make very good franchisees. On the flip-side, is he referring to true entrepreneurs or franchisees that just had buyer’s remorse and had to blame someone for their poor performance and/or failure?

“I could wax on for hours on the subject and don’t have the finger skills to type it all, but…

First, my qualifications: I founded/own a successful retail business for over 15 years. I have created multiple businesses, some successful, some not, but all independent. I also created a retail concept that I franchised. So I have the unique view of being an independent and a franchisor.

Here are some quotes:
-A franchise is like a bicycle with training wheels. Once you learn how to ride, you won’t want training wheels anymore.
-Franchising is for those who want you to help them…but, then to leave them alone. In other words they want to be indies, but in a community.
-A franchise is only as good as it’s support.
-If a franchise operation doesn’t give back in value more than royalties paid in, the franchisee will eventually resent writing a check to “the mother ship”.
-A franchise is a business model that people expect to have it all figured out – no one has it all figured out.”

A very well-respected and experienced franchise consultant offered his perspective from having worked with individuals explore franchising as a career alternative. I agree that many explore business ownership options because they cannot find a career position that will compensate them as they have grown accustomed to in the past. the choice between franchise and startup often comes down to risk.

“As a business model I think that franchising is or has taken the place of corporate expansion in a lot of cases. Especially in the startup sector. I don’t know how many times recently I have been contacted from a startup that wants to expand via franchising.

I am talking to a lot of people that are looking at franchising as an alternative career path. Most of them are coming to me because they can’t find a job, it isn’t that they don’t want one, but they can’t find one making the money they were making before.

So they turn to owning a business and a logical choice for some of them is a franchise. For others it is starting their own business.

I think it comes down to personal preference and ability to cope with risk factors. I think most of the people that buy a franchise do so to help reduce their risk, so if they were really looking for a job and then had to buy a business, a franchise is probably a one choice.

About 1/3 of my clients are people in this situation that were looking for a new career, due to recent economic conditions, and they couldn’t find what they were looking for.”

An upstart franchise founder offers her views from the perspective of being new to franchising but quite experienced in running her own business. She appears to be spot on about ideal franchise relationships but I look forward to discussing her thoughts after she awards her first four or five franchises.

“As a career alternative, franchises are not for entrepreneurs, whose M.O. is ‘anything you can do, I can do better’. As an expansion strategy, it depends on the industry, product, service and system. For those that rely heavily on outside sales, for instance, hiring salespeople is more risky and time consuming than offering the opportunity for ownership.

I agree that franchising is a great way to grow by working on your business instead of in it.

Franchises offer franchisees:
– Self direction (while some do, many don’t have too-stringent rules)
– Higher income potential than a fixed salary or most sales positions, and often even more than business ownership because growth may be better supported
– Proven solutions to problems that exist in the market, the basis for any startup
– Elimination or reduction of what can often be years or decades of research, development, relationship building and trial and error and financial investment
– SUPPORT”