{Cross-Posted at The Franchise King Blog}

Go Green! Well the franchise world is invading the green world, and it is starting in California.
{Big surprise} Continue reading….

Yep! The California Department of Corporations {Not The California Department of Corrections!} has approved a request by Solar Power Inc. to start selling franchises.

The retail store setup will be called Yes! Solar Solutions. There is already one up in Roseville, Ca.
Read in Sacramento Bee The retail store will provide design services for each home or business that wants solar power, and install the panels, also. In addition, solar powered coolers,backpacks etc. will be offered.

Here is something about solar energy solutions that you may not know:

The local energy utilities will actually buy back any extra solar power you are generating from your home or business! It comes in the form of a credit. They roll back your meter’s dials by the amount of extra energy you produce. That is fantastic!

Stay tuned..this is just the beginning….

I recently interviewed John Renner, who is the Business Development Specialist for the Small Business Administration’s Office, in Cleveland. John does great work for the Veteran community, including helping Vets learn about getting into their own businesses, the many programs available, and teaching them how to get contracts for work, when they get into business.

How long have you been at the SBA, and what is your official title?

I am in my 17th year at the SBA’s Cleveland District Office.
My title is Business Development Specialist.

How does that translate to helping veterans in small business, and those wishing to get into a business of their own?

I am a generalist at the SBA, focused on making sure that all existing and prospective small businesses are aware of the variety of programs offered through the SBA. I am also the offices’ Veterans Business Officer, a charge that I take very seriously. In that capacity, I work with many Veterans groups and Veterans who own businesses to insure that they are aware of specific benefits to businesses owned by Veterans and Service-disabled Veteran-Owned small businesses. Each SBA office across the country has a person who is designated as the Veterans Representative.

I understood you won an award for your work with veterans. Can you tell us about it?

I was honored this year to be chosen as the recipient of the Stanley Mageria award. Our Office of Veterans Business Development in Washington presents this award to “recognize a Veterans Business Development Officer who has provided exemplary business assistance and services to veteran, service-disabled veteran small business owners and self-employed members of the Reserve and National Guard.” This award is the most fulfilling recognition I have received in my time with the agency.

In your experience, do veterans make good small business owners? If so, what sets them apart from other small business owners?

There is no doubt in my mind that Veterans make great entrepreneurs. Military experience teaches strong organizational skills, solid decision making processes and focuses on motivational issues. These are the same skills and characteristics that are needed for business success. An article that drives this point home can be found here http://www.inc.com/news/articles/200708/census.html

Would you please describe some of the programs available to help Vets obtain loans for their new businesses?

The SBA has a stable of loan guaranty programs that can address the majority of financing needs of small businesses. This summer we introduced a loan initiative called Patriot Express that is specifically targeted at:

Veterans, service-disabled veterans, active-duty service member’s eligible for the Military’s Transition Assistance Program, Reservists and National Guard members, current spouses of any of the above as well as spouses of active duty service personnel and, the widowed spouse of a service member or veteran who died during service or of a service-connected disability. Additional details of the Patriot Express Loan can be found at http://www.sba.gov/patriotexpress/. Of course, it is important to point out that all of our loans are bank loans with an SBA guaranty and the process always starts with a strong business plan and a relationship with a small business banker. The SBA has resource partners all over the country.

Outside of the financing programs, we also assist small businesses who are interested in selling their products and services to Federal agencies. There is currently a mandated goal that all Federal agencies spend at least 3% of their procurement budgets with service-connected disabled owned small businesses. This creates a huge opportunity.

How is the SBA gearing up for the thousands of vets that will be returning from active duty in Iraq and Afghanistan?

The agency has recently taken a much more aggressive approach to assisting Veterans and the Patriot Express and procurement programs above are the first examples of what the SBA and the entire Federal community is doing to help create and build businesses owned by our Veterans.

{This article was cross posted on Thefranchiseblog4Vets.com}

Are the number of Franchise Consultants, and Brokers going to continue to grow? Or, as I predict, will this part of the Franchise industry start consolidating?…….

In the last 3 articles I have written about the phenomenon that is taking place..Too many consultant/brokers in the franchise world, and the  plethora of  new ones just entering an already crowded field. Here are links to Parts 1, 2, and  Part 3, just in case you wish to refresh your memory.

Am I writing about this just because I am a franchise consultant? Am I writing about this  because I do not want more competition? Am I writing about this because I just left a Franchise brokerage group that I really am not feeling the love for?
I am writing this to open up a discussion. I want to know how consumers feel about us. I want to know how franchise company execs feel about us. I am also writing this so that some prospective franchise brokers that are being courted by the franchise brokerage groups to buy their franchises that sell franchises to others, can take a breath..and find out before they buy, just what  it is that they are buying.

Janet Sparks, a veteran franchise industry writer, just wrote about one such wonderful franchise company, “The Entrepreneur’s Source” that once again is  is the position of defending itself against a class action lawsuit brought on by former franchisees. Article
They have a large number of franchisees, and at one time in little old Cleveland,Ohio, had 3-4 franchisees at the same time.
{As of this post, I only know of one franchisee in Cleveland who remains in business}
So, if “The Entrepreneur’s Source” as an example, has no problem selling 3 or 4 franchises in a shrinking metropolis like Cleveland, Ohio, multiply that by another 6-7 franchise brokerage groups that are trying to sell franchises of their own franchise brokering franchise, and you have some future headaches.

If you are reading this blog because you are thinking one day of investing in your own franchise as a way to “get where you want to go”, getting some advice and help makes sense. After all,there are over 3,500 different choices out there currently in franchising, and it does get quite confusing.
Here is the $100,000 question.  Would you want to work with:
A. A franchise consultant/ broker who like you, just lost his or her job, and is now a “franchise specialist” after a 2 week training program/
Or
B. A franchise consultant/broker who possibly either owned his or her own business before, or one that came from the franchise industry, and is now in another part of the industry?

If you chose A, are you really going to be comfortable working with someone who is new, and who is really learning about franchising at the same time you are? Are you really going to be comfortable with
their suggestions on how you should invest your $150+  in this new business venture?

If you chose B, at least you have access to a large number of folks who have already worked with this experienced franchise consultant/broker, and can share their personal  experiences with them.
However, working with an experienced  franchise consultant broker won’t guarantee success. Just like in any industry in which consultants get paid for a sale is the model, stuff can happen.

The bottom line is that if you are thinking about getting into franchise ownership, and you don’t want to do it on your own, using the right person can be very productive. Get references.

If you are thinking about buying a franchise brokerage franchise, make sure you know what you may be up against. {An industry that is getting ready to consolidate}

I really enjoy what I do. I get to help others with their dreams of business ownership. I get to do a lot of public speaking. {I was graced with good pipes..Here is a radio interview }
I get to meet some really smart people! All in all, my life is pretty darn good……

So, is their really going to be a shakeout in the Franchise industry, as it relates to the overcrowded franchise consultant/brokerage field?
There has to be…….

The numbers will bear this out, I believe. The math:

Number of US Citizens interested in exploring business ownership is S {Smallish}
Number of Franchise/Business opportunities is I {Increasing}
Number of franchise consultants/brokers is RS { Really Scary}

So if S + I is divided by TMC {Too Many Choices}and divided again by FDW {Future Downsized Workers}, then the equation must be recalculated to reflect the Ginormus {Huge} amount of new Franchise consultants/brokers entering the field.
However……..The FR {Failure Rate} must be put into this newer equation as an IN{Infinite Number}.

So, according to my calculations:
1. More people will be downsized, and may start exploring opportunities in the world of franchise ownership.
2. More and more new franchise concepts will be introduced, with franchise companies using different ways to reach out to prospective franchise owners.{Consumers are already being bombarded by thousands of marketing messages every day, so this will only add to the confusion}.
3. With more and more choices in franchising being offered, and the possible number of new franchise consultant/brokers that could be in the market in the next year or two {who will also be adding marketing messages to the already bombarded consumer}, a consolidation in our industry will be inevitable.
{I feel this is starting already}

So what type of consultant/brokers will be the survivors?
{End of Part 3. Part 4 Soon}

Posted by Joel Libava, from his  The Franchise King Blog 

My first post about the topic of there being too many franchise consultant/brokers in the industry now, has prompted a pretty good discussion on a blog I contribute to, BlueMauMau.org, a very popular blog that is targeted to current and future franchise owners. More………

There were over 60 back and forth comments about this topic as of Sunday evening {8-5.} I am quite passionate about this subject, so  are some others in the industry….check out this discussion.
{Please come back here when you are done, to continue reading.}

The biggest problem I have with the amount of new “consultants” coming into our industry, is how they are being sold the bill of goods. Jim Coen, a 25 year franchise industry veteran up in New England, and fellow blogger,  gives one example of a franchise that sells franchises, to those that want to sell franchises. {Confusing, huh?}  See Below:

• No Experience Necessary
• Huge Demand and growing demand for our service
• No Cold Calling Required
• Work with the best franchises
• Tremendous Income Potential, earning up to $25,000 for a single transaction
• Complete Training
• Start from your Home
• Work Part time
• Only $19,900 to get started

$19,900 is quite the bargain, with no cold calling! Some franchises that sell franchises to those that want to sell franchises, have $30k-$50k Franchise Fees up front. To those folks that may be reading this, that are thinking about  becoming a “consultant”, what do you think “no cold calling” means?
What this means, in a nutshell, is that these franchises that sell franchises to folks that want to sell franchises will be sending you somewhat qualified “leads.” Well kind of “leads.” More like what I have been calling them for the last 5 years, inquires. A “lead’ is someone who is fairly interested in learning more about what you offer. An inquiry is a tad more of a casual look-see.
{These are my definitions, others will disagree] Don’t care. It is what is is. {IIWIIS}
A typical call to a  “lead” that you may receive most of the time goes like this:

Us- “Hello, This is Joel Libava {or Jim Coen}, and we are responding to an inquiry you made online concerning franchise opportunities.”

 Lead- “Yes, are you from Blimpie’s Subs“?

Us- “Well, actually no, we are franchise consultants/brokers, and we work with a large number of franchise company’s..blah blah blah…..”

Lead- “Well I specifically wanted information on Blimpie’s, do you work with them or not?!!”
Click.Click.Clickarooni.
Well, that was enjoyable. On a positive note, it only takes about 75-100 internet “leads” to find 2-3 folks that really might work with you, and hopefully one that will actually buy a franchise that you represent.

{End of Part 2}  Part 3 Coming Soon Enough

What happens to a segment of an industry that has too many players?

The segment that I am talking about is one that is very close to my heart…..

Our type of business {Franchise Consulting-Brokering}has been around since the late 1980′s.
Until 2001 or so, our local firm has had very few competitors.
However, our part of the vast franchise industry, like a lot of other industries, is gettingrather crowded. There seems to be a plethora of folks who think what we do is easy.

Simple, and easy stuff, what we do. We try to help those wishing to explore business ownership, get into business! There are just gobs of folks that can write a check for $50k-75k, go to a bank for more, and prepare themselves mentally to possibly not make any money for the first year!

So what we have now is a bunch of “franchise brokering groups” that are themselves selling franchises to folks to sell franchises. HUH?
Folks that are paying $75k-$100k for these “home based” franchises are in for some surprises.First of all, the folks that are buying these unproven franchise brokering franchises are usually folks who have never been in the franchise industry! Their familiarity of the franchise industry consists of eating at burger and donut restaurants…
This is not anything personal against some of the folks that are writing the checks to buy into these franchise concepts, but, this is not “easy money“! What is really going on is that franchising is “HOT”, and more and more folks want to learn more. Learning and doing {writing a big fat check!} are two vastly different things. Sure a nice comfy “home based” business sounds good. But in reality, one is not “home.” One is out networking, and figuring out where these “people” are, that want to buy franchises.One is also spending lots of money advertising, and marketing, and advertising to find a couple of “interested parties.”

{End of Part 1} Part 2 coming soon……