Simple rule #1 

All that a blog really is is CONTENT…and content has value because there are hundreds of millions of people a day searching for ANSWERS to their questions or solutions to their problems.  I produce content about once a month, and I try to deliver that content as answers to questions.  I consider myself the average joe, and when I google, I ask a questions.  For Example: “What is a good pizza recipe?”

Simple rule #2

It is OK to include advertisements and sponsors near your content!  Google is so good at delivery of relevant advertisments, including adsense ads on your site actually ENHANCES your readers experiences by making it even easier for them to find what they need. 

Simple Ruly #3

Blogging must be fun before it will be profitable.  From day one I was excited about the challenge of making money online!  With the skills that you can acquire online, come economic meltdowns or high water, it is truly possible to make a darn good living by providing content and selling “value” on the Internet…not that is fun to me.

Simple Rule #4

Keep evolving your online strategy.  I believe that the best blog is the one that gets your “feet wet” to the world of online revenue.  For me, this blog has led to full blown e-commerce, iPhone applications, distribution businesses, and my newest venture into the service world of Local Logic.  The world wide web is changing daily, and it is critical to stay on top of the wave!

Wow, the last few weeks have been awesome and crazy.  The launch of the new company is going WELL above my initial expectations.  We are extremely busy with good work.  For this I am thankful, but it has made it extremely difficult for me to find time to post here at TAM.  You all know my girls are my number one priority, so they have been getting any free time that I can muster.

This quick post is important as Michigan released unemployment data and we hit a staggering 14.1% unemployment rate here in this once great state of opportunity.  This is sad and sobering.  Basically 15 out of every 100 people that I know in Michigan are unable to find work. 

The situation here in Michigan is simply out of control.  Big government and a burdensome tax system here in the Great Lakes state has left our economy decimated.  We seem to tax EVERYTHING…even in hard times.  There is hardly an incentive to innovate here anymore.  The emails that I’m receiving from you readers who are looking to start business show a common theme.  Most would be entrepreneurs are held up by fear of the tax system, or not understanding the legal issues of owning a business.  THESE THINGS SHOULD BE CLEAR AND EASY, THIS WOULD PROMOTE INNOVATION AND RISK TAKING MORE THAN ANYTHING!  Couple that with some strategic, easy to access investment dollars for GREAT business plans…and we could turn this thing around. 

I’m praying for my state, but the sad fact is that Jesus did not come to save us from bad business decisions.  We must deal with those here and now!

Many conversations lately have seemed to be more coaching than consultation based. 

I’m seeing a lot of fear in Michigan.  The worst part of fear is that 98% of it is just simply not real.  It is a bunch of crap that is floating around your head because of something your mother told you 10 years ago, or your lawyer told you last week, or whatever. 

There are MILLIONS of reasons to not try something new…just ask any lawyer!  I wonder how many great business ideas have been squashed by lawyers?  I would bet the number is staggering!  To talk to a lawyer, it is ALMOST IMPOSSIBLE to get ANYTHING done as thoroughly as it SHOULD BE DONE!  No one should every try ANYTHING NEW…THERE IS JUST TOO MUCH LIABILITY IN EVERYTHING! 

This would make business impossible, wouldn’t it!

BUT,we all know that great ideas to sproat into successful businesses.  Risk is real, no doubt…but it is often rewarded richly here in the real world. 

So I tip my hat to all of you out there who are blazing your own trail, in spite of the fear and negative talk!  Remember why you pay a lawyer, for advice on the law…not to tell you about all the millions of things that can (and will) go wrong in every business deal.  Move forward, and work hard.  You can deal with the inevitable when the inevitable shows up at your doorstep.  If you try to deal with EVERY POSSIBLE future scenario here in the present, you will NEVER get anything done, and your goals and dreams will die with the “negative possibilities” you are trying to avoid. 

Be street smart and stick with your gut!  This has never let me down!

The thought is that there are going to literally be hundreds of thousands of people looking for work, OR HAVING TO FIGURE OUT HOW TO MAKE A LIVING FOR THEMSELVES! 

i BELIEVE STRONGLY that most people have it inside themselves to operate a successful small business.  What they need is for someone to guide them through the aspects of business ownership that seem tough or mysterious…for example; setting up an LLC, getting a tax id number, state and local taxes, employment practices, obtaining a loan, etc. 

For the past 10 years I’ve been going through the business start-up process over and over again, and with much success.  I could probably get something going in my sleep.  That being said, I’m putting it out there that for all you “Almost Millionaires” who are looking to get a business started, I’m here to help! 

If you have a specific question about starting a business in Michigan, or anywhere in the US for that matter, send me an email thealmostmillionaire@gmail.com with your question.  I’ll do my best to answer it in a post, or we can dialog via e-mail.  I’m hoping I can offer some free advice (becuase it is always worth what you pay for it) that will make a difference if someones life!  And I’m hoping to fuel the entrepreneurial spirit that is waiting to be unleashed here in Michigan!

Photo Credit: http://www.eightsolid.com

In June of 2003 I opened my first franchised pizza store here in Michigan. I went into partnership with my best friend from college. We had worked for 18 months planning our business, finding the perfect location, learning about the pizza business (him a lot more than me, as he went through the training program), etc. Our timing could not have been better! We opened with a bang, were having a lot of fun, and making some pretty good money too.

FAST FORWARD A COUPLE OF YEARS…Me and that same partner have now purchased a 2nd pizza store franchise from a struggling franchisee. We have went into partnership with his father on two sandwich shops and a “Starbucks type” coffee franchise…(but much cooler than Starbucks!) ANYWAYS…My partner lost interest in the pizza business. He was married now and the late hours sucked for him (besides, he was a morning person anyways…he loves to get up at 4:30 AM to go bass fishing, crazy, I know!) This love for the morning made the coffee business a perfect fit for him, but the bottom line is that the pizza stores were going down hill and he wanted out.

In 2005 my younger brother and I bought him out of the two pizza franchises, and my brother took over the day to day operations of the stores. He was just out of college, and had no trouble putting in the long and late hours of the pizza game. In less than a year, sales were up 20% at our original store, and 40% at the second store that we purchased. They were highly profitable again and life was good.

In 2007 we were approached by another franchisee who owned 3 pizza stores in Michigan. He wanted to buy our stores. He paid a lot less than we had originally wanted, but we eventually sold him the stores and walked away with a nice profit. This franchisee now had 5 pizza stores in Michigan. I don’t know the story, or what happened, but that guy who bought our pizza stores closed up all 5 of his stores about a year later. Which leads me back to the title of this “long winded” post…Is a Pizza Franchise a Good Investment? THE ANSWER, IT DEPENDS!

In the town I live in, we have seen about 10 pizza stores close over the past two years.  I believe this is directly related to the $5 Little Caesars “Hot N Ready” Pizza.  It is hard to compete with a OK pizza for $5 in Michigan, even if you are selling a GREAT pizza for only $10.00.  Little Caesars has changed the industry here in Michigan for sure, and probably in other states too.  So in the Mid West today, I would be very cautious about investing in a pizza franchise! 

Depending on where you live though, population density, competition, average age, and number of households…a pizza business can be very fun and profitable.  You REALLY have to do your homework though.  There is TONS of data that needs to be sifted through in determining if any restaurant will be successful in a given town.  I’ve developed a system to try to figure that out.  If you are ever considering a franchised restaurant, zip me an e-mail, and I will try to help if I can!

Happy Easter! -B

I know for a fact that there are a TON of you out there asking yourself this question right now…Should I buy a franchise?  So many folks are losing their jobs and getting laid off, it generally causes most all of us to consider “going it on our own!” 

Being your own boss is great, but to be honest, you will probably find yourself doing double the work for half the pay if you are not CAREFUL…and that is not an exaggeration at all.  I TELL YOU THIS, NOT TO SCARE YOU, BUT BECAUSE YOU MUST CHOOSE A GREAT FRANCHISE SYSTEM IF YOU WANT TO BE SUCCESSFUL…AND THIS IS HARD, BECAUSE THERE ARE LITERALLY THOUSANDS OF BAD FRANCHISES YOU CAN INVEST INTO.

Keep in mind that with a franchise, you are in business for yourself, BUT the Franchisor can and will control how you do business.  For a successful and proven franchise system…this is great!  You get the benefit of their proven money making system! 

For a new franchise company that is still working out the bugs, this can be a nightmare!  They will force you to spend money and do things that they THINK will make you successful.  But often times those things will not work and they are learning their business on YOUR DIME. 

Franchising can be an amazing tool to financial freedom, BUT BE CAUTIONS, because there are very few truly good franchise systems out there!

To learn more about franchising, visit http://www.bfranchise.com This is my secret little place to riff and rant about franchising in general. ]]> http://www.thealmostmillionaire.com/should-i-buy-a-franchise/feed/ 31 http://www.thealmostmillionaire.com/franchising-for-cash-flow/ http://www.thealmostmillionaire.com/franchising-for-cash-flow/#comments Thu, 26 Mar 2009 02:09:14 +0000 Almost Millionaire http://www.thealmostmillionaire.com/?p=160

 Over the past 5 years I’ve had the opportunity to buy, operate, and sell five franchised restaurants.  The restaurant businesses, and specifically franchised restaurants, have provided significant additional cash flow for my family (on top of my earnings as a financial advisor 2002-2006, and VP @ Private Equity firm 2007-present).

I think the key is to realize that 9 out of 10 new business ventures fail in the first 12-18 months.  Conversely, a franchised business (franchised from an established, proven company) generally has a 90% chance of surviving that first year, and a 75% chance of surviving and/or thriving for up to 5 years.

The second key point is to understand the difference between franchises that require the owner to operate them day in and day out, and franchises that are designed to be operated by a manager and not requiring 8 hours of “on site” time from the owner.  I’ve confused these two in the past and it has cost me dearly. 

If you desire additional cash flow, you need to find a franchise concept that is designed to allow the owner to maintain their current career, but to “support and assist” a manager at their franchised business.  This is important, because if you purchase a franchise that is designed to have the owner live there, you have simply bought yourself an expensive job.  It will own you, you will not own it!

The key point of understanding a franchise as an investment is to employ the concept of return on equity.  Let’s say you purchase a hair care franchise for $100,000.  With good credit you generally will need to come up with $20,000 of your own cash (you, family, friends, etc.)…and a bank will usually give you the other $80,000 spread out over a 5 year repayment term.  If you hire a great manager your store may be profitable that first year.  To illustrate, let’s assume your store did $200,000 in haircut sales that first year.  You paid your manager, your employees, your rent, your supplies, utilities, franchise fees (royalties), taxes, interest on your loan, etc.  Then your accountant tells you that you have $20,000 left over at the end of the year…your profit!  You may look at this and say, “Wow, I made a 20% return, because this hair care place cost a total of $100,000…Great!”  But from the standpoint of Return on Equity, you have actually made a 100% return on your invested dollars!  The actual equity that you have into your business is only the $20,000 that you had to come up with to secure your $80,000 bank loan.  $20,000 invested, $20,000 profit, 100% annual return.  (If things go well…and there is a lot that can go wrong!  This is not for the faint of heart, no matter how much you like a franchise.)

First of all I want to remind us all that Relationships are THE MOST important things that we have here on earth.  Those with God, family, friends, business partners, etc. are diamonds that we are blessed with and that we need to serve, honor, and protect.  It is great to post your thoughts on your blog, and then look back the next day and have 10 -15 valuable, thoughtful ideas and comments to relish.  The relationships that I have with any of you who are reading this, I truly value.  I’m getting all mushy…and I’ve said it before…but I TRULY appreciate all of you who thank the time to interact with and add value to this personal finance blog.  Grace and Peace to you all, wherever you are in the world and in life.  Please don’t hesitate to zip me an email if there is ever anything I can do to help or impact your corner of the world in any way.  

I’ve been honored to read, comment, and interact on most of your online adventures.  I want to let you know that you all are doing great and exciting things!  Be encouraged, because I believe as the years play out, we are going to have so many success stories to continue to share with each other and anyone else who cares to get involved!  I believe that we are all blogging with a goal in mind.  Remember that worthy ventures are usually a slow drip, slow drip, slow drip…and then something changes and you find yourself caught up in a vortex of success.  It’s going to happen!  Stay encouraged, love life, and keep having fun!

Blessings – B

I traveled to Charleston, South Carolina for an extended weekend of vision casting for the University in co-operation with a handful of the schools most generous and supportive benefactors.  I engaged in very meaningful conversation with a diverse group of individuals…folks with highly successful ministries, multi-million dollar companies, family medical practices, etc.  EACH HAD A UNIQUE STORY of how success manifested in their lives…and each had a varied definition of success (as we have discussed in past posts). 

But there was a common thread in each story that, when combined with eachother, created a strong rope of truth with which I was able to tug on.  Tugging on this rope literally lead me to The Secret of Success on my plane ride home. 

Some of my most meaningful conversations were with the beautiful staff members of Charleston Place.  These folks radiated a spirit of joy and humble service as they catered to every aspect of our South Carolina experience.  Everyone that I encountered seemed to take deep pride in the important work that they were doing to make Charleston Place the most hospitable and inviting destination in the southern part of the U.S.

I don’t know if these people just REALLY loved their jobs…but what I believe IS THAT THEY LOVED WHAT THEY WERE DOING!  It seemed to be a part of them at their very core.  It was really quite amazing to experience!  I felt like I was in a time warp or something…I’ve had good service, but these folks were on another level!

WHICH BRINGS ME BACK TO “The Secret of Success”  The Millionaire business people and the amazing staff at Charleston Place, at their core, I believe lived by this principle.  DO WHAT YOU LOVE AND LOVE WHAT YOU DO! 

You have heard this before, I know.  Here is the difference though…LOVE IS A CHOICE, AND YOU HAVE TO MAKE IT FOR YOURSELF!  This is the only way to have PEACE and JOY right in the middle of each and every stage of life that you find yourself.  WE ALL HAVE STRUGGLES, but we have the God given power to CHOOSE LOVE, PEACE, and JOY in each moment…no matter what. 

And I believe in doing this, you will find success now…and even more in the future!

I DON’T think that it is a foregone conclusion that our country is headed for a “depression.”  A depression in economic terms is loosely defined as a countries Gross Domestic Product (GDP) dropping by about 10% or more in a given year.  WHAT I MEAN by GDP is the total value of all goods, services, and investments spend by EVERYONE…individuals, businesses, and governments…in a given year.  The GDP of the Untied States of American as just under $14 Trillion last year. 

HERE IS WHY I’m Concerned…

Our country has survived economic downturns in the past, many times in fact.  This one is different though in my opinion.  The reason is this:  Individual Americans and our Federal Government has a CRUSHING AMOUNT OF DEBT that is growing bigger and bigger every day.  The interest alone that we must someday pay on our national debt is growing rapidly and is currently estimated at $45,000 PER SECOND!!!

I read recently that 80% of Americans would potentially be bankrupt and homeless if they simply missed 2 PAYCHECKS!

The reason for this is because of the huge mortgages, auto loans, failed business loans, student loans, credit card loans, etc. that we are all required to make huge payments on each month.  AND ALMOST NONE OF US HAS AN EMERGENCY FUND that would last more than two months. 

SO WHAT CAN YOU DO?

• Stop spending your money like the village idiot!  American currently save less than 2% of their yearly earnings! 
• Quit going to the mall every time you are bored!
• Build an emergency fund!  Do this with the dollars you are not blowing at the mall.
• Buy JUNK SILVER COINS.  Do this with about 25% of your emergency fund.  Silver has proved to be a good store of value for thousands of years.
• Get rid of unnecessary debt.  And do this as soon as possible.  If you just bought an ATV and took a 12% interest loan…sell that sucker, and get that debt off your back!
• But conserve cash too!  It can be unwise in uncertain times to spend every penny of cash you have to par down your debt.  This is where the concept of EMERGENCY FUND is important!
• Stock up on some food with very long shelf life!  I’m not trying to alarm you, but if you understand the gravity of the numbers I’m just shared with you, some extra food in the basement seems attractive.
• Keep having faith and working hard!  With all the doom and gloom out there, I still believe in power much bigger than ourselves and our economic worries.  Keep focused on ALL THE GOOD BLESSINGS in your life, because they are abundant, even through our struggles.  Just look at the birds outside, they don’t seem to worry where their next meal will come from…and aren’t us people more important than the birds?  I believe we are!