Thursday, June 30, 2011
Wednesday, June 29, 2011
Wednesday, June 8, 2011
Wednesday, January 5, 2011
Last night I watched a TV series of Anthony Robbins "Breakthrough", what I love with this TV series I was able to know Anthony Robbins in a personal level since I only know him through his audio books. I see in him his passion on changing people lives to a better one.
Tuesday, December 28, 2010
WHAT ARE THE PREPARATION DO YOU NEED SO YOU CAN DO BUSINESS ANYWHERE IN THE WORLD AND BE SUCCESSFUL WITH IT?
In order to be successful in any Business anywhere in the world
Saturday, December 25, 2010
by COACH RYAN V of CA2020.net
This is a sequel to my blog titled "Secrets of Successful Entrepreneurs". If you haven't read it CLICK HEREIn that blog I mentioned that in order for one to be successful and make it big in building a business the traditional way he/she needs one or a combination of any of these four elements:Lots Of Money
Lots Of Time
Lots Of Talents and Skills
Lots Of LuckNow the above are needed because one has to have resources, time, skills and the right opportunity to make his/her startup work. What if he/she couldn't find those elements present? Then Came FranchisingAn option that became popular starting the 1960's is the Franchising Business. This business model perhaps came from the ingenuity of Ray Croc (McDonald's) when he asked the question "how can I expand this business quickly and with less risk?" He then discovered he could just package the business and look for those who want to start their businesses and sell this package. The person who buys this business package shall have to pay a "franchise fee" and in return gets to be taught all the system he/she needs to make the business work. The advantage of this is that there won't be a need to experiment or guess. Also, since the franchisor (the one that sold the business package) is the originator of the system he/she gets a portion of the franchisee's (the one that bought the business package) revenues as "royalty". When this new business system spread across America, many people said it was a scam. They were wrong. McDonald's became a huge business empire because of this model.This business model became popular not just for McDonald's but a whole lot other companies and businesses started using this as their means to expand. For people who want to start a business but has no special talent and not enough luck - this business model became a blockbuster. The question now is "Do I get rich through franchising?"Definitely. By being the FRANCHISORBut how about if I am the franchisee? Can I still be rich? Yes. But you have to be rich to start with so you can become richer. Why did I say this?Illustration 1: Let's take the case of you buying a McDonald's franchise. Well to have one you would need to pay McDonald's at least Php 20 Million franchise fee. Typically (from my interview with a friend who used to own a McDonald's franchise) it generates a revenue on the average of Php 300,000 - Php 450,000 per month (on a good month). From this revenue the franchisee pays about 3%-5% royalty fee to McDonalds (about Php15,000 - Php 22,500 per month). From this revenue also one pays his/her employees, the rent for the land which the restaurant is built (McDonald's owns the land), utilities, and income tax. Let's say all this adds up to 40% of the revenue then the owners of the McDonald's franchise (typically a corporate entity as McDonald's only grants license to registered corporations) shall have a net income of about Php 180,000 to Php 270,000 per month. What if you want to earn at least Php 1 Million per month? Then you'd need to have at least 6 McDonald's franchise. Then you'd need at least Php 120 Million to pay the franchise fee. If you don't have it in your bank account then you must look for investors or loan from a bank that amount. The thing is, investors will be willing to invest that amount only in people who are already earning huge amounts of passive income. Bankers shall be looking for financial statements and cash flow that shall justify the loan of Php 120 Million. Don't you think you need to be rich to be able to buy even just one McDonald's franchise?Illustration 2: But Coach I can start with a small franchise. Okay now then let's take the case of a typical siomai franchise. Average sized carts require a franchise fee of Php 200,000 - Php 300,000 (there are smaller ones but proportionally the income is smaller). This cart shall typically generate a revenue of maximum Php 50,000 per month. From this you need to pay royalty income to the franchisor (about 2% to 3% or about Php 1,000 to Php 1,500). Now of course you'd need employees to man your cart (or pwede din ikaw) so you pay him/her salary. Then you still need to pay rent, you need to buy your ingredients from your franchisor's commisary and you need to pay taxes, utilities. You may be left with about Php 30,000 net. But did I mention you need to put in controls like on how your employee shall give you the cash earnings for the day, monitor if your employee comes in to work on time and closes at the right time, pay recurring franchise fees (franchise contracts end every 5 years renewable), etc. These may incurr additional expenses or you may as well spend time in this business. To earn at least Php 1 Million from this typical franchise you need to have at least 20 carts. That means you need to have at least Php 4 Million. Most highly paid employees may have this much money saved. But how can you handle the management of at least 20 franchises? Can you monitor everyday these franchises, which most probably be in locations very far apart from each other (since franchisees are resticted in putting franchises very close to each other)? Then perhaps you would need to hire area managers or you can do it yourself by buying a car so you can patrol around and check your business every day. But Coach I don't want to earn that much money, I'm contented earning at just Php 30,000 per month income from a single franchise. Well then don't do business at all. If you're gonna start a business you better be targetting millions of pesos (or even dollars) of income or don't do it at all. The challenges of being in business aren't justified by Php 30,000 or even Php 100,000 per month. If that's the only income you want then I advise you to be in employment na lang, secure pa income mo. POINT TO PONDER 1: If you want to get rich being a franchisee (or what we call Traditional Franchising) you have eliminated having to have:TALENT - since you already have a system, no need for special abilities to make it work
LUCK - since there should be a proven system in place (IF ONLY YOU CHOOSE A FRANCHISE THAT HAS A TRACK RECORD OF HAVING AT LEAST 1,000 FRANCHISEES)But based on our illustrations above you still need to have:LOTS OF MONEY - for you to buy BIG FRANCHISES like McDonald's (which perhaps you would need to buy more than one of it) or for you to buy LOTS of small franchises like siomai or Zagu. If you dont have much money then you cant buy the big franchises or you can only buy one of the small ones (meaning your income is limited - you don't get rich). LOTS OF TIME - this is eliminated if you are a franchisee of McDonald's or Jollibee (meaning you need to have lots of money) since you can hire a store manager. But for small franchises you may need to manage it and monitor. For multiple locations you might need to move around a lot of times to ensure the success of their operations and address concerns. PERHAPS A BIT OF LUCK - because it doesn't mean that it's a franchise the people in the location where you put it shall want it. Some franchises, even of big ones close down (like Ineng's BBQ that closed in Alabang Town Center after only months of being there). Smaller ones have a higher rate of closure since the franchisors of these companies don't have as big a budget for market research. POINT TO PONDER 2: If you want to be rich in franchising you need to be the franchisor. In my McDonald's example, if McDonald's earns just Php 15,000 royalty per franchisee per month then it makes Php 330 Million per month from its 22,000 franchises all over the world. But to be a successful franchisor like McDonald's we go back to the original problem of having to start a business the traditional way (which means you need LOTS OF MONEY, LOTS OF TIME, LOTS OF SKILLS/TALENTS or LOTS OF LUCK) to make it big. So what can you do then? Leveraged businesses are everywhere now with the power of the internet making waves. But in the next sequel to this blog, let's see what it takes to build successful internet based businesses as this as well is becoming more popular.
To Have a Conversation with the blog author, you can check this link: http://www.ca2020.net/profiles/blogs/is-becoming-a-franchisee-going But in order to have an access, pls sign-up using this (invited by DAVID JEREOS) to be approved.
Tuesday, December 21, 2010
Our financial future will be dependent on how do we understand or define budgeting and managing money.