Franchise

[Taysby]

So people were interested in me saving up for a franchise.  The original plan was to get my degree in Business Administration then buy run and sell franchises after for a living.  Owning the business is where all of the money is.  The one I'm currently is looking into is called Digital Doc.  They do repairs for everything electronic (including virus removal).  It's mostly screen repairs though.  They are very flexible and would let me sell anything digital related though.  Because I'm in college, I wouldn't be able to afford a brick and mortar location, so I'd get a kiosk at the local mall.  That would cut down drastically on startup costs.  To cut down on wages I'd go to the college and recruit interns.  I give them work experience in the computer field while allowing me to dump all profit back into the business to grow it.  Seems pretty straight forward.  Get one up and running, find other people to manage it, lather, rinse and repeat.




Here's my approximate 5 year plan assuming everything goes as planned. (which it rarely does)

From now until April   2015
Keep focused on schooling while working as much as I can to save up money to decrease the loan I will be taking out.

April-May   2015
Talk to banks to find the one that'll give me the best rate.
Hire a lawyer to look over the legal agreements.
Sign the legal agreements
End of may-go to the 2 week training they require of you.

June    2015
Grand Opening!  YAY!

September/October   2015
Break even

June/July 2016
Use all the profit i've been making to open my 2nd location

October/November  2016
Break Even with location 2

December  2016
Use profits from number 1 to open number 3.  VEGAS BABY!  (well, maby not in vegas)

May 2017
Most likely I will be behind schedule.

August 2017
Horay!  we're on schedule.  Open location 4.

March 2018
Open location 5?  Depends on what I feel like.

April 2018
Now I hit a dilemma.  Do I keep the enterprise that I have?  Or do i sell it?  Businesses tend to sell for 3x their annual net profit.  As of now I expect that my different locations will be averaging $50,000 a year in profit.  That'd be a selling price of 600,000-700,000.  I haven't gotten paid except for gas and textbooks this whole time, so I would like one <a href="www.lamborghini.com">of these</a> for a college graduation gift and to upgrade to a better business.  I'm sure that 4-5 is the maximum number I could handle at one time, so there isn't much room for growth.  I believe I'd sell it.



April 2018 Plan B
Now things don't normally go according to plan.  Probably one location isn't doing good enough to justify keeping it and money isn't coming in as fast as I think it would have.  I'll probably only have 3 locations turning a profit.  Maby a 4th in the works.  That's a value of 450,000.  Not enough for a cool car AND a better business.  At this point, I'd just hang onto it for a while and start paying myself and hiring non-interns to increase the quality of the business.  In a year is when I'd start contemplating on selling again.





Questions comments and criticisms appreciated.

[MuggyWuggy]

How do you determine your starting city and how do you intend to compete with existing businesses with a well established reputation for being the "go to store" in the locale?

[Aladormax]

The first thing I want to know is where are you. Smallville USA is not known for an over abundance of technical knowledge, but is well known for supporting local businesses. You mention a mall kiosk as an option. I will bluntly tell you that some people  will never get a new screen from a kiosk, as they are seen as shoddy And untrustworthy. How will you overcome this?

I am NOT bashing your idea, just asking hard questions?

[particle]

where are you getting the ideas for revenue and the like from. and breaking even after less than 6 months? seriously?

[Rass]

The big problem I see is you are going to have to do everything. Thing interns are going to work for free for some no name person/company is going to be hard.

Also check into all the insurance cost you will need. Overhead is a pain. Also advertising is expensive.

From my understanding most businesses don't make any profit for the first three years. So you should  have a good amount of money set aside.

Good luck. I looked into opening my own business but the start up cost was way to expensive. I would suggest to talk to someone in the field you are looking into and a business accountant. They have a better idea on start up costs.

Good luck.

[Piotr]

You will be behind your schedule if you listen to 'can't do attitude' people

[Agrus Kos, Enforcer of Truth]

You will be behind your schedule if you listen to 'can't do attitude' people

While true, there is a difference between "realistic" and "pessimistic."

[MuggyWuggy]

Underpants gnomes theory seems present

Open business
?
Profit


Factoring labor like interns etc could actually backfire, hiring kids who have no true qualifications who are ultimately not responsible could result in data being exploited, hardware broken, warranties voided or just basic malfunction of software due to inexperience. Or just more work for you in general.

Hiring a staff that is very qualified and loyal is a better strategy than hiring kids looking for a part time job for their college resume. It will take more work but you will have people on your team who are dependable. They rely on the profit to pay their bills. Not their parents, they cannot afford to lose a job that pays them (respectfully - and that means no minimum wage) . It's also nice to be able to leave for a weekend without the business catching on fire.

You're dealing with expensive technology, you don't want people who don't care about the quality of the job, you want people who want to connect personally with each customer and allow the one experience to grow further, becoming a growing relationship rather than a one time transactional relationship.


I've managed at every job I've been in, whether coffee, IT work, production, or medical so this is where my reference comes from: IRL experience

Stop looking at your business as a math problem only, good people skills is far better. Your main competition will be stores like best buy's geek squad, how can you beat that? Advertising and pricing alone won't beat them. Service that blows them away will.

[MuggyWuggy]

Those businesses actually pay people.  I wouldn't be getting any money, nor would my employees.  If I end up having to pay them to get people who are competent, that would slow things down. 

Would you work somewhere for free?
Just ask yourself that

[Mattao19]

I have yet to read any comments yet so I may be resorting something but....

If you expect to break even within a year you're gunna have a bad time lol

[Mattao19]

Talked to him today.  Rarely does it take more than a year to break even.  And considering that I'm not paying myself or my employees, I like my chances.

Well let me rephrase. While earning money to repay your loan, etc. you'll still have living expenses etc. so be prepared but all in all best of luck

[Agrus Kos, Enforcer of Truth]

I think the biggest error in the plan is each step is dependent on the flawless success of the last step; you've essentially built yourself a house of cards. That's not to say you can't be successful, it just means you are depending on a lot of variables aligning perfectly and you should be prepared for all outcomes, not just the optimal one.

[Aladormax]

If I read this right, you have an optimum plan for ~5 years. You admit that things will go wrong but that's where you want to end up. Correct?

[Aladormax]

You also admit that if it takes longer than 5 years it's ok right.

[Aladormax]

Not anywhere useful. I was clarifying it for my own understanding.