Presentation given to those interested in exploring how to choose the right business for you.

1. How to choose the right
business for you
Kelly Ellis

2. Agenda
What hope to accomplish today:
 Know more about yourself
 Figure out a process that works for you
 Know more about your options
 Feel more confident about your next steps

3. My Info
 Married, 2 kids
 Two Businesses:
 Commercial Real Estate
 The Entrepreneur Authority
 Passions: Golf, playing with my boys,
helping others

4. Why are you here?

5. FACT
► FromMichele Lind, Small Business Expert,
at NPR (www.npr.org):
 75% of small businesses go out of business
within the first 5 years.
 #1 reason small businesses fail: Run out of
money.

6. Why Are You Here?…
 Be Your Own Boss  More Community
 Less Travel Involvement
 Build Equity  Small Business Tax Benefits
 Leave a Legacy  Financial Independence
 New Challenges  Better Income Potential
 Build My Own Team  Flexible Schedule/Life
 Career Stability Balance
 Add New Income  Escape From Corporate
Stream Politics
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7. Entrepreneur Quiz
► Simple questions.
► Answer honestly, then sum the total at the
end.

8. Who are you?
► Describe your risk tolerance
► High Risk
► Medium
► Low
► Describe your Strengths / Weaknesses (2
columns)
► Financial Situation
 How much money are you willing to put into your
business
 How long can you go with no income?
► Sales vs Ops?
► What is your exit strategy for your business?

9. Additionally …
► What are you passionate about?
► How much money are you wanting to
make?
► What does your ideal day look like?
► Do you have the support of others in your
immediate family?

10. Here’s the answer!
“ I want a business where I can
make a high 6-figure income, in
my first year, putting little or no money
down. I want the business to have very
high margins with no direct competition.
It must be something that is very proven
and established, and of course not yet in
my market. I want to be able to not
work nights, weekends and I would
rather not have to deal with many
customers or employees. Oh, and put in
on hold for me for 6 months while I
make mind up.” 10

11. Know thyself … Where are you on the risk
scale?
ESQ 119-181
ESQ 0-118 ESQ 182-210
Ultra Conservative Ultra Entrepreneurial
/ Corporate / Independent
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12. New Business Options
► Unique Patent
► Invention
► New way to use an old product
► Retail
► Services
► Manufacturing
► Legal

13. Concepts can be …
► Capitalizing
on latest trends
► Hot new concept
► Proven concepts
► Bad Ideas

14. Future Career Options
INCOME LIFE-
OPTION COST RISK EQUITY
REWARD STYLE
LOW –
Employment LOW MED – MED – LOW LOW
MED
HIGH HIGH
BUY MED – MED – LOW – LOW –
Business ?
HIGH HIGH MED HIGH
Business LOW –
Start Up ? HIGH ? HIGH ++ ?
(From Scratch)
HIGH++
Buy LOW – LOW – MED – MED – MED –
MED –
Franchise MED MED HIGH HIGH HIGH
HIGH
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15. If buying another business or
choosing a franchise …
 Owners should have some company-owned units for training
and R&D
 Owners should be growing regionally toward market
share, not “buck shooting” nationally
 Franchisor must treat franchisees as working partners
 Shoot for a >20+% return on investment…no guarantees
 “Clean” UFOC, low incidence of failures/terminations
 Don’t pick a “fad” business
 Choose something that you would consume or patronize
 Business should be unique with competitive advantages
 SOMETHING YOU CAN BE PASSIONATE ABOUT!
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16. Small Business Ownership Trends…
► Green
► Consulting concepts (large talent pool)
► Creatively-themed concepts (Retail-tainment)
► Healthy fast foods with taste
(61% adults overweight)
► Health, Health, & Health-related (Baby Boomers)
► Financial (factoring, equipment leasing)
► Trash hauling / Moving concepts
► Cyber-cafes
► Privatization/Outsourcing of government businesses
► Home-Based, low-overhead business concepts
► Multiple-unit / Master Franchising opportunities
► …and much more 16

17. Debunking The Myths about Franchising …
 Franchises are mostly about
burgers, shakes & fries
 Franchises are just buying yourself a job
 Franchises should align to either ones
industry background or favorite hobby
to be the best fit
 Franchises are expensive
 Franchises don’t allow franchisee input
 Franchises are mostly 24/7 operations
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18. What Does a typical franchise cost?
Total Investment Percent
$150K and under 52.5%
$150K to $300K 32.7%
$300K to $500K 9.2%
Over $500K 5.6%
Source: Franchise Times Magazine 2005

19. Most Common Frustrations in starting your
own business …
1. Obtaining Earnings Claim Information
2. Don’t want to be “Sold” – this is serious stuff
3. Who can you trust?
4. Really knowing where you are on the risk scale
5. Working through all of the costs – really knowing
where you stand
6. Bothering with writing a business plan
7. Working through the Loan Process
8. Actually finding / negotiating a physical place to
do business (if needed)
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20. A few mistakes to watch out for …
1. Not doing enough self analysis – what are your “unique” buyer values?
2. Not digging in to really understand the financial impact, costs, exit strategy, etc.
3. Not being suited to doing it all yourself, without administrative support.
administrative
4. Only looking at what are perceived to be the “hottest” concepts
5. Trusting everything you read on the internet
6. Forgetting that it is a mutual assessment (You / Franchisor)
7. Too analytical or too intuitive (Analysis Paralysis)
8. Not seeking the advice of those you trust in your decision making process
making
9. Going with the least expensive / cheapest royalty business
10. Not realizing the time it really takes to be successful
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21. Need For A Legal Expert
► What is an UFOC?
► What is negotiable in a contract?
► What are non-compete clauses?
► What is the basis of an earnings claim?
► What are my rights to full disclosure?
► What are my contractual obligations?
► What are the Franchisor’s obligations?
► How do I improve my odds for success?
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22. Financial Expertise
► How do I finance a Franchise?
► Which type of business entity is
most tax efficient?
► How do I protect for financial liability?
► What federal, state and local regulations
effect my business financially?
► What is the best way to track my financial
transactions?
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23. Funding Your Business…
Bank Financing Credit Card
Home Equity Financing
SBA Family/Friends/
Automobile Relatives (OPM)
Financing Investors
Bank Lines of Credit Venture Capital
Leasing Franchisor /
401K/ IRA monies Business Owner of
Existing Business
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24. Questions ?…
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25. Call To Action…
 Spend a few minutes, write down next steps
 Write down your challenges
 Write down your concerns
 Who’s going to be part of your team of advisors
 Start evaluating the suitability of the options
 Build your Success Team
 What’s holding you back?
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26. Reference
► Self Analysis
 keirsey.com
 Self-directed-search.com
 Analyzemycareer.com
 Careerplanner.com
 ncda.com

27. More reference info …
► Wall Street Journal (Thursday)
► Entrepreneur Magazine
► Inc. Magazine
► Franchise Magazines
► All have websites

28. Decide if the
Timing Is Right…
“ IF IT IS TO
BE, IT IS UP
TO ME…”
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