How To Avoid Common Franchise Mistakes

Is a Franchise a Safe Way to Start a New Business?

Which is more risky? Buying a franchise or starting your own business from scratch? If you said starting your own business is riskier, think again. For hundreds of thousands of people who have invested their life savings into a franchise, making that investment is often more difficult than they ever thought it would be.

If you’ve been reading this newsletter for very long, you know that I’m a big fan of home-based businesses. A bookkeeping and tax practice is the perfect business to operate from out of your home. In fact, working out of a home office is the preferred method for a bookkeeping practice.

That said, a franchise might not be the best way to start your home based business. I don’t want you to think that I am anti-franchise, because I’m not. But there are a couple of things you need to consider before you drop your family’s nest-egg into purchasing a franchise, thinking it will ensure your success. (You should also know that many franchises have start-up fees that are as high as $80,000.)

At the end of this article I’d like to share with you a non-franchise option that will cost a fraction of what a franchise costs and provides almost every single benefit of a buying a franchise.

Be Your Own Boss – Purchase a Franchise

This may or may not be completely true. When you purchase a franchise, you are really just leasing a trademark. Your real boss is the company who has sold you the privilege of using their trademark.

“If you really want to be your own boss, choose a business you’d like to go into, and then go to work in that industry until you learn something about it,” says Gerald Marks, a franchise attorney in Red Bank, N.J. “Then go and start your own company.”

According to Anne Fisher of FORTUNE Small Business, ” . . . buying a franchise ensnares would-be entrepreneurs into the worst of both worlds: You get all the financial exposure, headaches and stress of business ownership — but the company that sold you the franchise collects royalties on every nickel that comes through the door, not to mention charging fees for marketing, fees for this, fees for that, more fees for anything you can imagine (and some stuff you can’t).”

Not to mention that the franchisor usually controls how you price your services, what kind of displays you can use, how much you pay your employees and who will be your suppliers. Violate the franchise agreement, often even a nit-picky detail, and the franchisor can, and often does, pull your franchise back without reimbursing you a penny.

Research Suggests You’re Better Off to Start Your Own Business

According to Fisher, “In the early 90’s, Timothy Bates, a professor at Wayne State University, studied census data on 20,000 new enterprises and found that 38% of franchises failed within four years of opening their doors.”

In some industries it’s worse than that for franchises. She goes on to say, “In retailing, 45% of new franchise units last less than four years, while just 23% of independent stores flopped.”

Not All Franchises Fail-Here’s Four Ways to Improve the Odds for Success

Of course, not all franchises fail. Here are some ways to make the most of starting a franchise. Remember, a franchise isn’t the only way to start a bookkeeping and accounting practice, and I’d still like to share with you an alternative at the end of this article.

1. Read the Contract — The contract, called the Uniform Franchise Offering Circular (UFOC) is filled with so much fine print that some agreements are the size of a small phone book. Make sure you read the entire document, or better yet, have an experienced franchise attorney read it for you. You need to know what’s in it before you sign anything.
2. Do Your Homework — Find out everything you can about the franchise and the market you are going to be working in. Talk to others who already own a franchise. Don’t stop at the list of “approved” franchisees they give you. Try to find others that aren’t on the list and you might get a different story. Hearing from the successes and the failures will give you a lot more information that just the successes.
3. Be Ready to Sell, Sell, Sell — If you are going to start a franchise, don’t expect that their national marketing campaign will bring in all the customers you’ll ever need. You’ll still need to sell. If you don’t already have the skills, you’ll need to acquire them. Make certain that your franchise opportunity will teach you what you’ll need to know to succeed at selling for your franchise.
4. Choose a Franchisor with a Proven Formula for Generating Profits — And be sure to follow their system to the letter. Bruce Sharpe, CEO of a diet-and-exercise franchise chain called Slender Lady, says, “One of the biggest causes of franchise failure is, people go off on tangents.” He goes on to say, “If you don’t want to follow the system the franchisor has set up, then buying a franchise is insanity. It’s a waste of both the franchisor’s time and money and your own.”

You’ve Been Talking About Starting a Bookkeeping Business . . . If a Franchise Isn’t For Me, How Should I Start?

The method I’m about to describe may not appear as easy as starting a franchise, but it is. Universal Accounting Center has been teaching people the ins-and-outs of small business accounting and tax since 1979. Universal may not have been around as long as H&R Block or some of the other franchises, but we offer the most complete and comprehensive bookkeeping and tax preparation education in the business. And that includes H&R Block.

Let’s Start at the Beginning — You Need an Education

You don’t need a college or university education to learn bookkeeping, but you do need to have a complete and specialized education.

We’ve been the small business accounting and tax experts for over 25 years, and feel that if your education doesn’t have the power to create the type of income and lifestyle that you are looking for, it’s not the right education.

With Universal, you’ll learn everything you’ll need to know to do the books for small businesses. (And I won’t charge you a Royalty fee for the privilege, either.)

Next, You’ll Need Help Getting Your Business Started

For the first 6 months, the most critical time for any buisness, after you’ve finished your course, you’ll have access to a live voice on the other end of the phone who can help you with everything from making suggestions on computer programs, to office equipment and marketing. Your coach will be there to answer your bookkeeping and accounting questions too. By the way, did I mention that this is a FREE service for the first 6 months?

You May Want Help Marketing Your Business Too

Universal has some of the finest marketing experts anywhere who are willing and able to offer their expertise to help you market your new bookkeeping and accounting practice. We can’t do it for you, but you’ll be surprised at how simple and inexpensive really effective marketing can be. It’s not rocket science — you can do it.

You May Want to Know What Others are Doing — What Works and What Doesn’t

Through the Forum offered by Universal Accounting, you can find out what others are doing to make their businesses successful and ask questions of people who are out in the field doing just what you are doing.

No Bookkeeping and Accounting Business is Complete Until it’s—Complete

Small Business Bookkeeping is only a part of the puzzle. Bookkeeping and Accounting services not only compliment Tax Preparation services, but are an important part of offering your clients a complete financial services package. Universal Accounting also offers the most complete tax preparation program anywhere.

By adding professional tax preparation to your bookkeeping and accounting practice, you’ll be able to offer your clients a full service financial offering. Tax Planning takes place long before the books are closed out on January 31st. As your client’s bookkeeper/accountant and professional tax preparer, you’ll be in a unique position to offer your clients advice on a monthly basis that will impact their tax return as well as their monthly profits. (Information that they will gladly pay for enabling you to create a very rewarding lifestyle for you and your family.)

Why Should I Consider Adding Professional Tax Preparation to My Bookkeeping and Accounting Practice?

As you can see on the graph at the left, income from a tax preparation business will peak during the first four months of the year. Many professional tax preparers are able to bill at rates that are $100 per hour or more, enabling them to work for 4 to 6 months per year and semi-retire the rest of the year.

As you are building your bookkeeping practice, many of our graduates have found that adding a tax accounting service provides a means for them to increase their income throughout the year.

At Universal Accounting, we’ve discovered over several years that the average small business bookkeeping account will generate an income of $300 per month. By billing your tax clients on a monthly basis and offering tax planning services along with year-end tax preparation services, you can feel confident billing and additional $100 per month for tax preparation services creating a gross billing of $400 per month to clients who receive complete financial services.

The graph below shows the impact that adding bookkeeping services and tax preparation services can produce for your business. Click on the link below for a more complete description of what combining a tax preparation business with a bookkeeping and accounting practice can do for you.

Click Here and Find Out More About Offering Full-Service Financial Services

Starting a Bookkeeping and Tax Preparation Business Makes Sense

I may not be a big fan of the Franchise opportunities that are available today, but there’s never been a better time to start a professional bookkeeping and tax practice. Most of the college and university programs out there don’t prepare their graduates for a career in small business accounting and tax preparation. Unfortunately, neither do the franchise programs that we’ve talked about today.

Unlike the franchises we’ve talked about, with an education from Universal Accounting you can begin your bookkeeping practice by operating out of your home. In fact, that’s what we’d recommend. There’s no need to run an bookkeeping or tax service out of an expensive office space. The only people who will find you in an office will be the people trying to sell you something.

When you look at starting any business, the right training and support is critical. At Universal, we offer the following:

• The Most Complete Training Anywhere
• Support for 6 Months After You Complete the Course
• Marketing Support for 6 Months After You Complete the Course
• Continuing Bookkeeping and Marketing Support After Your First Year Available

I haven’t found a more comprehensive program to help you succeed anywhere, including the franchise opportunities. But that’s not all, at Universal Accounting we back it up 100%.

Universal Accounting’s Ironclad
100% Money Back Guarantee

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The Financial Services training includes the Professional Tax Preparer certification program and the 60 hour Professional Bookkeeper program.

Start your business with Tax Preparation. Click on the link below to find out more about starting your complete financial services business by starting with just the tax package.

Click Here for More Information About the Professional Bookkeeper Program

Click Here for More Information About Financing the Professional Bookkeeper Program

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