5 Recession Mistakes To Avoid With Your Home Based Business Franchise
5 Recession Mistakes To Avoid With Your Home Based Business Franchise
1. Decreasing Your Investment in Marketing
This, according to some, is one of the most foolish mistakes a business leader can make during recession. With unemployment rising, investments dwindling, and demand for many goods seeming to diminish, it’s wise and often recommended that businessmen take time to analyze operation costs and cut back where possible, but the absolute worst place to do that is in marketing. In fact, in the midst of a recession, a good work at home businessman will do completely the opposite, funneling more money into marketing for the simple fact that getting your name before more potential clients is vital to weathering an economic crunch. And it’s wise to do this in as many ways as possible, including simple and cheap tactics like advertising on the side of your car or having a newspaper article written about your business. The more stage time you get, the better.
2. Mis-pricing You Goods/Services
This is dangerous in a recession for the simple reason that money is tight for everyone. If you leave your prices as high as they’ve always been, you’re sure to lose business, but if you drop prices too low, you won’t make any profit, and in either of those situations, your bottom line and your business will suffer. The key is to find a place of balance between the extremes, and there are at least two ways to do that. One way is to give big price cuts to a handful of your biggest clients. For example, the Vehicle Tracking Solutions franchisee, who sells vehicle GPS equipment to corporate clients, can offer a client with a car fleet of 400 vehicles a whopping discount to ensure that that source of income keeps up while leaving his smaller clients at a more standard rate. Another alternative plan for this work from home businessman is to decrease all his prices by 15%, a moderate cut that will encourage business without costing him a great deal. Either way, maintaining cash flow is key.
3. Assuming the Demand for All Products Will Drop
It’s tempting to believe that all products and services in all industries see a decreased rate of purchase in a recession, but that’s a naïve thought. In reality, there are many products and industries that are either unaffected by economic downturn, like the home improvement industry, or are actually counter-cyclical, like pasta, which tends to do better when people feel no longer able to afford more expensive foods at the grocery store. A good example of this is DVDNow, a vending franchise that makes its profit from vending DVDs from an automated machine that is much more convenient and inexpensive than any rental store. Since the US is not about to give up its movie-watching privileges, this cheaper and easier way to rent will certainly see more business than its walk-in store counterparts. If your business sells some specific product or service that has the propensity to soar during economic decline, use that advantage to its fullest, pouring more or your finances into that product. And if you’re in the market for a business for sale right now, look into those that have a counter-cyclical or constant demand.
4. Putting up with Overpriced Supplier Costs
In the midst of economic decline, it’s vital to remember that as much as you are supplying goods and services to others who demand lower prices, you too are being supplied goods and services by other businesses who are responsible to decrease their prices to fairer levels for you too. The Vendstar candy-vending franchisee, for instance, whose suppliers have not dropped their candy prices has every right to request lower prices or look elsewhere for their merchandise when the recession begins to take a toll on his sales, if it does. If, for fear of angering an associate or losing a business deal, you do not negotiate an appropriate discount from your suppliers, it could be more costly than you think.
5. Doing What’s Nice for Employees, Not What’s Best for Business
Everyone wants to treat their employees well, but sometimes even good employees have to go if the business is to survive. It is the responsibility of business owners to do what’s in the best interest of their franchises, not simply what is nicest for the people they’ve hired. If, during a recession, the owner of a WSI Internet web marketing consultancy is faced with a decision of saving the money spent on one employee’s salary or allowing the whole business to suffer and potentially collapse, there is only one responsible choice to make. Never be afraid to let individual people go as necessary, or it may eventually cost everybody.
Business opportunities, as all other gifts in life, take a good deal of wisdom to adequately manage and cultivate, particularly when times are hard. It’s never easy to own a franchise, but by keeping aware of the common mistakes made by others, your odds of success become a good deal greater. Learn everything you can and apply everything that’s prudent to your new home based business franchise.
5 Recession Mistakes To Avoid With Your Home Based Business Franchise - To learn more about this author, visit Candice Clem's Website.
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In any business, at any time, there is an unending number of mistakes that a business owner can make. Generally those mistakes are not costly enough to do serious damage to an operation, but during a recession it takes a much smaller error to bring a home based business franchise to its knees, because the home business is already in a susceptible position as is. And since recession is already in full swing in the US, it’s important to know what some of the most damaging mistakes are. Here are 5 of the most rampant recession errors that small business franchisees have a tendency to make.
1. Decreasing Your Investment in Marketing
This, according to some, is one of the most foolish mistakes a business leader can make during recession. With unemployment rising, investments dwindling, and demand for many goods seeming to diminish, it’s wise and often recommended that businessmen take time to analyze operation costs and cut back where possible, but the absolute worst place to do that is in marketing. In fact, in the midst of a recession, a good work at home businessman will do completely the opposite, funneling more money into marketing for the simple fact that getting your name before more potential clients is vital to weathering an economic crunch. And it’s wise to do this in as many ways as possible, including simple and cheap tactics like advertising on the side of your car or having a newspaper article written about your business. The more stage time you get, the better.
2. Mis-pricing You Goods/Services
This is dangerous in a recession for the simple reason that money is tight for everyone. If you leave your prices as high as they’ve always been, you’re sure to lose business, but if you drop prices too low, you won’t make any profit, and in either of those situations, your bottom line and your business will suffer. The key is to find a place of balance between the extremes, and there are at least two ways to do that. One way is to give big price cuts to a handful of your biggest clients. For example, the Vehicle Tracking Solutions franchisee, who sells vehicle GPS equipment to corporate clients, can offer a client with a car fleet of 400 vehicles a whopping discount to ensure that that source of income keeps up while leaving his smaller clients at a more standard rate. Another alternative plan for this work from home businessman is to decrease all his prices by 15%, a moderate cut that will encourage business without costing him a great deal. Either way, maintaining cash flow is key.
3. Assuming the Demand for All Products Will Drop
It’s tempting to believe that all products and services in all industries see a decreased rate of purchase in a recession, but that’s a naïve thought. In reality, there are many products and industries that are either unaffected by economic downturn, like the home improvement industry, or are actually counter-cyclical, like pasta, which tends to do better when people feel no longer able to afford more expensive foods at the grocery store. A good example of this is DVDNow, a vending franchise that makes its profit from vending DVDs from an automated machine that is much more convenient and inexpensive than any rental store. Since the US is not about to give up its movie-watching privileges, this cheaper and easier way to rent will certainly see more business than its walk-in store counterparts. If your business sells some specific product or service that has the propensity to soar during economic decline, use that advantage to its fullest, pouring more or your finances into that product. And if you’re in the market for a business for sale right now, look into those that have a counter-cyclical or constant demand.
4. Putting up with Overpriced Supplier Costs
In the midst of economic decline, it’s vital to remember that as much as you are supplying goods and services to others who demand lower prices, you too are being supplied goods and services by other businesses who are responsible to decrease their prices to fairer levels for you too. The Vendstar candy-vending franchisee, for instance, whose suppliers have not dropped their candy prices has every right to request lower prices or look elsewhere for their merchandise when the recession begins to take a toll on his sales, if it does. If, for fear of angering an associate or losing a business deal, you do not negotiate an appropriate discount from your suppliers, it could be more costly than you think.
5. Doing What’s Nice for Employees, Not What’s Best for Business
Everyone wants to treat their employees well, but sometimes even good employees have to go if the business is to survive. It is the responsibility of business owners to do what’s in the best interest of their franchises, not simply what is nicest for the people they’ve hired. If, during a recession, the owner of a WSI Internet web marketing consultancy is faced with a decision of saving the money spent on one employee’s salary or allowing the whole business to suffer and potentially collapse, there is only one responsible choice to make. Never be afraid to let individual people go as necessary, or it may eventually cost everybody.
Business opportunities, as all other gifts in life, take a good deal of wisdom to adequately manage and cultivate, particularly when times are hard. It’s never easy to own a franchise, but by keeping aware of the common mistakes made by others, your odds of success become a good deal greater. Learn everything you can and apply everything that’s prudent to your new home based business franchise.
5 Recession Mistakes To Avoid With Your Home Based Business Franchise - To learn more about this author, visit Candice Clem's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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