5 Questions to Ask Your Web Developer (Entrepreneur.com)

A very relevant article considering that most websites in PR are poorly designed and do not meet industry standards. For example, Banco Popular's website lacks the industry's generally accepted usability standards.

5 Questions to Ask Your Web Developer

If you want your site to work--and keep working--consider these factors before you build it.

By Jennifer Shaheen | July 30, 2009

URL: http://www.entrepreneur.com/ebusiness/buildingawebsite/article202862.html

Building a website can be a lot like putting together a jigsaw puzzle--sometimes the picture looks good, but when you look closely, pieces are in the wrong places. A website might function, but as soon as you make a change or an update, the picture falls apart.

How do you avoid hiring a designer or developer that builds a website like this? Here are some questions you can ask and some feedback to help you understand their answers.

1. What web standards do they follow?
This is a great question that will fluster someone who doesn’t have standards. What are web standards? This is the way of designing and coding a website that allows the website to grow with technology and the web visitor. This means using clean code and technologies like:

• CSS (Cascading Style Sheets): a simple mechanism for adding style like fonts, colors, and spacing to web pages
• XHTML (Extensible Hypertext Markup Language): a markup language that has the same depth of expression as HTML, but also conforms to XML syntax
• ECMA Scripts: the standard version of JavaScript used on most web browsers.

You don’t have to know how to write the languages; you just have to know what the standards are to understand the answer.

A simple way to help you connect to this question is to remember that people online don't all use the same web browser or operating system. Designing and developing to standards gives your website the ability to look and function the way it should on different platforms.

2. Do they design for SEO best practices?
It’s no secret today that everyone wants a website that can be found on search engines. Implementing search engine optimization may not be what you want your designer or developer to do for you; however, how your site is designed or coded can affect your strategy when you are ready. When you interview developers, this is a great question to ask and see if the person you’re interviewing is familiar with how to code to meet SEO standards. Here are a few items that affect SEO best practices:

• CSS (Cascading Style Sheets): Designing a website to meet SEO best practices means using style sheets to cut down on the amount of code on your web page. Search engines like text, not code.
• Script files: When you use dynamic items on your site like image galleries or mouse-over menus, usually these are created through JavaScript. To follow proper SEO standards, script files should be created for pages instead of having the script on your web page.
• Web page content: Your text or content should be on the page as much as possible this can even include your website navigation. There are ways to make text visually appealing without having the designer put it inside an image. Images that contain words are not picked up as content by search engines.

If SEO is a strategy you are considering down the line, it's a good idea to make sure your site will be built with this strategy in mind.

3. How do they plan for change or growth?
One of the most stressful lessons learned is that the website you built yesterday will not allow you to grow tomorrow. Being told you have to start over is one of those statements every business owner can't bear to hear. Before you begin, ask the question, “Does the technology you’re using allow me to grow or add additional functions?” You may even want to take this further and think about tools you’d want to add down the line. You can also ask designers or developers to provide you with a brief list of tools they have already integrated with sites like yours. This allows you not only the opportunity to see if they are knowledgeable, but also whether they're supportive in providing you with ideas.

4. How do they test their work?
As I mentioned above, not all of your consumers use the same technology. But to ensure things are operating the way they should or displaying correctly, web developer need to test their work. This issue might seem trivial, but you’d be surprised how many firms only test for one web browser. I recommend you ask specifically what web browsers and versions they test for during the development process. If you’re building an online community, social or e-commerce website, testing is an important part of your success. Secure payment gateways need to be tested in a real environment. Be sure to get the specifics of what your firm considers to be part of a test phase and what it's being held accountable for after the website has gone live.

5. How do they handle support requests?
After a website has officially launched inevitably there will be a problem--it’s technology; it happens. The question you want to know before you put pen to contract is how does your new firm handle support or bugs--technical hiccups with the website? Every firm will approach this differently, so pay close attention to how it phrase its response and commitment.

Building a website depending on the functions you need can be a lot like putting a puzzle together. The key to success is finding the right firm who understands the pieces that need to come together for your business.

Jennifer Shaheen, the e-marketing and Technology Therapist, has more 10 years experience working with small- to mid-sized businesses on their e-marketing and web development needs. You can learn more about her by visiting her web site, TechnologyTherapy.com

5 Steps to Building a Successful Niche Business (NYT)

5 Steps to Building a Successful Niche Business

A simple service can win big in a small market.

By Scott Gerber | August 03, 2009

URL: http://www.entrepreneur.com/startingabusiness/youngentrepreneurscolumnistscottgerber/article202900.html

From aquatic sporting goods for dogs to Michelle Obama-inspired fashion websites, niche products and services have the potential to generate big bucks if they capture the hearts, minds and wallets of a dedicated consumer base. Unlike conglomerates that target the masses, niche businesses cater to highly defined markets that are often over-looked, underserved or disenfranchised by larger competitors. With an abundance of available outlets, resources and online platforms, identifying and reaching a target audience has never been easier for small business owners. Are you ready to become the big fish in a small pond? Is your passion unique enough to turn a profit? Here are 5 steps to make your niche business a hit.

Create a Simple Service
A simple service is a singular offering that focuses on the needs of a narrowly defined customer base. Whether you yearn to be the premier manufacturer of dog lingerie or the industry-leading producer of edible Christmas tree ornaments, make sure you can easily answer these questions: Who needs your service? What’s uniquely useful about that service? What makes your service better than your competition? Fine-tune your brand name, website, and marketing tactics to focus solely on selling your unique specialization and expertise. Remember: Focus. Focus. Focus.

Real World Example: In 2004, my partners and I launched a typical "do everything" video production company. After years of under-performing, I transformed the company into a single product specialist. While the vast majority of video production companies still tout their large service rosters, Sizzle it! has carved out a niche as the only company that specializes in sizzle reels--stylized 3-to-5 minute product videos commonly used by PR and marketing professionals. Result; Sizzle It! has emerged as a go-to company for sizzle reels and benefits from top keyword visibility on all major search engines.

Craft Your Niche Marketplace
The key to your simple service’s success is to capitalize on a niche marketplace that you feel is being underserved. A niche marketplace is a small, specialized market segment within a larger, viable commercial industry. When identifying the niche marketplace you wish to enter, consider the following questions: Who lives in your marketplace? Why have they been underserved? How can you better serve them? How can you unite them? In short, why is your simple service the solution to their problem? Compile the data you collect to produce a detailed profile of your target customer. Using the data from your customer profile, join or create online groups, feeds and networks that are relevant to your simple service. Connect with your niche marketplace’s key decision makers, enthusiasts, and influencers using social networks such as Facebook, Ning, Twitter and MeetUp.

Real World Example: There are thousands of T-shirt stores both online and offline, but few have truly established or engaged a niche marketplace. Threadless is a user-generated T-Shirt and apparel website that determines its product line based on the results of online design competitions. Winning artists receive recognition, cash prizes and their designs sold on Threadless gear. The company has united a niche marketplace of trendsetting hipsters, artists and design aficionados seeking wearable art. Result: the company sells over 1 million shirts per year.

Become the Niche’s Leading Authority
As the creator of your simple service, you offer your niche marketplace valuable insight and advice. However, simply proclaiming you are an expert will get you nowhere. Shamelessly self-promoting your service will also lead to a dead end. Authenticity builds credibility. Relate to your constituents. Tell the story behind the founding of your simple service. What problems did you encounter? How did you solve them? Once you’ve perfected your message, disseminate relevant content through "expert real estate" such as blogs, forums, press releases, speaking engagements, newsletters, web videos and podcasts. Remember, no one knows your marketplace better than you.

Real World Example: Joy Berry is a best-selling author of children's books and, according to Scholastic, the inventor of self-help books for kids. For over 30 years, Joy’s advice and media products have focused on helping parents to raise responsible kids by teaching them the living skills their children need to know at various developmental stages. Result: Joy Berry has connected to a worldwide audience and sold an astonishing 85 million books.

Be Specific, Distinctive and Relevant
Seize every opportunity to point out why your service is a better fit for your niche marketplace than competitive offerings. Take a good look at all of the components that make up your simple service, from concept to manufacturing and distribution. What makes you stand out? What do you offer that competitors don’t? Why are you more relevant to your niche marketplace? Use the answers to these questions as ammunition against the competition. While a competitor may tout their “multi-service one-stop-shop”, your niche marketplace prefers a specialist. Your competitor may be a low-cost leader, but your niche marketplace appreciates high quality craftsmanship.

Real World Example: While major corporations have dominated the print yearbook industry for decades, Yearbook Innovation, a school memory product provider in Staten Island, N.Y., believed cash-strapped schools were ready for a change. Yearbook Innovation differentiated its yearbook products by offering more hands-on customer service and production services than competitors, eliminating penalties and late fees, and slashing 20 percent--off a school’s previous yearbook contract--all without a loss in product quality. Result: the company has begun to take away market share from entrenched competitors in their local area.

Copy, Paste, and Repeat
Keep hammering your message home. Expand on your successes. Find innovative ways to grow your niche marketplace. Locate new avenues, channels and “expert real estate” to showcase your simple service, its competitive advantages and your expertise. You know what’s worked; now increase your exposure. Copy, paste, and repeat.

Real World Example: Google began as a simple service that could only dream of being in the same league as companies such as Yahoo and Microsoft. Today, Google has become the undisputed online advertising titan by consistently developing, acquiring and partnering with high trafficked online destinations that expand its AdWords program. Result: Google generates billions of dollars per year in revenue.

Are you a young entrepreneur with a unique venture? Email us about it at youngentrepreneurcolumn@gmail.com

Scott D. Gerber is Entrepreneur.com's Young Entrepreneur columnist and CEO of Gerber Entertainment, a brand development and venture management company that specializes in the entertainment, Internet, media and marketing industries. For information on speaking engagements, media appearances or Gerber Entertainment's portfolio of businesses visit www.GerberEntertainment.com.

A Small-Business Guide to Intellectual Property (NYT)

A Small-Business Guide to Intellectual Property

By DARREN DAHL

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Quick Tips:

From Mark Blaxill and Ralph Eckhardt, founders of 3LP Advisors, an intellectual property consulting company in Boston, and co-authors of a guide to I.P., "The Invisible Edge" (Portfolio, 2009).

• Securing your intellectual property involves more than patents. Trademarks, trade dress and even Web site addresses are all part of I.P.

• Think strategically when it comes to international rights. Start with countries where you might sell.

• Don't sit on unused I.P. Use it to open additional revenue streams or bring about new partnerships through licensing.

Suggested Reading:

• The U.S. Patent and Trademark Office , for more information about I.P. for small business.

• The World Intellectual Property Organization , for more about international I.P. rights.

• An easy-to-use online global directory for I.P. resources.

• Use Google's patent site to perform your patent search. You can also search here and here.

• Patently-O by Dennis Crouch is one of the most popular blogs on the subject of I.P. law.

The two most precious resources for any small-business owner are time and money. That’s why when the subject of intellectual property comes up, many owners run in the other direction. They see images of expensive lawyers and use that as an excuse to ignore the topic, reasoning that it is a problem for big companies to worry about.

The trouble is, with the rise of competition through the Internet and on the global market, understanding intellectual property is more critical than ever for small-business owners. Let’s explore some of the common fallacies:

1. For small-business owners, it’s not worth the time or effort to secure intellectual property rights.

Daniel Lubetzky, chief executive of New York City-based Kind Snacks, had high hopes when he and his company attended the Natural Products Expo West in Anaheim, Calif., in March. And who could blame him, since his Kind Plus bars had been named the best new product at the Natural Products Expo East last October?

But it didn’t take long before Mr. Lubetzky knew something had gone wrong: He kept hearing how one of his competitors had copied the packaging, look and feel of his bars.

Fortunately for Mr. Lubetzky, he had secured crucial components of intellectual property like trademarks, trade dress (the look and feel of a product) and Web addresses after founding his company. Unlike a patent, which can cost up to $25,000 to secure, trademarks and Web addresses can be obtained relatively cheaply and without the aid of a lawyer.

With the legal documentation to back up his intellectual property rights, Mr. Lubetzky sent the offending company a cease-and-desist letter, which achieved the desired result. “Too many entrepreneurs forget there is more to I.P. than just patents,” said Mr. Lubetzky, who happens to be a lawyer.

2. Once I get a trademark, my brand is safe.

It may be. But consider what happened to Tracey Deschaine, who runs a restaurant called Dixie Picnic in Ocean City, N.J.

When Ms. Deschaine opened her business in 2006, she secured trademarks on her business name and logo and on the name of her signature item, “upcakes,” which are upside-down frosted cupcakes. The problem, she says, was that even though she had obtained the trademarks, someone monitoring the activity on the United States Patent and Trademark Office’s Web site had spotted her application and secured upcakes.com as the Web address, or U.R.L., before she could.

“I had no idea that even though I have a trademark, someone else could just go register the U.R.L.,” she said. “I wish I had planned ahead and bought the site before I did that.”

3. Having a patent gives me the right to produce something.

This is a very fundamental misunderstanding. Actually, what a patent does is give you the right to prevent someone else from producing what your patent covers. “Having a strong I.P. position helps ensure that other people pay you for your innovation like they would a toll on a road,” Mr. Kocher said.

But even if you do have a patent, there’s no guarantee that someone won’t try to get around it. There’s also no guarantee that you will win if you fight that person. But if you have your I.P. ducks in a row and a commitment to do whatever you can to defend those rights, you do have a fighting chance — even in a fight against a much larger company.

Consider the example of Cryptography Research, a 20-employee technology firm in San Francisco that specializes in data security. Beginning in 2004, the company made the decision to pursue litigation against the credit card giant Visa, which Cryptography asserted was infringing on its patents covering smart cards. To pursue the case against Visa, however, Cryptography’s founder, Paul Kocher, knew he needed a serious war chest in addition to his patent portfolio.

That’s why he decided to sell off another piece of his business, patents covering technology that protects Blu-ray discs from piracy, to Macrovision, which is now known as Rovi, in 2007 for $45 million. “All of a sudden we became a formidable opponent for someone who thought we couldn’t fight,” Mr. Kocher said. In the end, the gamble paid off, as the two companies settled out of court, with Visa’s agreeing to license the technology from Cryptography.

4. If I have a patent or trademark in the United States, I don’t need to worry about the rest of the world.

It depends on your business model. Intellectual property rights, which also include country-specific U.R.L.’s, need to be obtained country by country, some of which protect them better than others. The cost can vary, too.

In Japan, for example, it is notoriously expensive to acquire patents. In addition, the annual fees required to maintain the patents there are often prohibitively expensive for small businesses, said Gary Johnson, chief executive of Blue Spark Technologies, a manufacturer based in West Lake, Ohio, that makes small, flexible batteries used in things like radio frequency identification tags.

“What we have done is to develop a strategy to go after I.P. protection in a limited number of countries that we think we are most likely to sell or manufacture in, like the U.S. and China,” he said. “A lot of the choice comes down to what your business plan tells you.” To decide what your international I.P. strategy should be, consult a lawyer and conduct some cost-benefit analysis to see if expanding your I.P. rights makes sense.

5. People who collect patents but don’t actually make anything are “patent trolls,” parasites who can make money only by filing lawsuits against real businesses.

The term “patent troll” was coined in the wake of the epic lawsuit fought between NTP, a small holding company, and Research in Motion, which makes the hugely popular BlackBerry. The focal point of the dispute was a patent for wireless e-mail delivery held by NTP — something that R.I.M. eventually would pay millions of dollars to license. But what most people remember about the story is the lawsuits and the notion that NTP was somehow in the wrong for trying to enforce its patent, mostly because it didn’t make any products itself.

But consider that many inventors never set out to build a company, only to partner with someone who would bring their products to life. Thomas Edison, for instance, received more than 1,000 patents — many of which he licensed to other companies. “He created what we might consider the first innovation factory,” says Mark Blaxill a co-founder of 3LP Advisors, an intellectual property consulting company based in Boston.

A more recent example is Trident Design, a company founded by an inventor, Chris Hawker, which patented and then licensed the design for the PowerSquid. Like Edison, Mr. Hawker’s company invents products, builds an intellectual-property wall around them and then licenses them to other companies.

The PowerSquid is now manufactured by a division of Phillips Electronics and sold by a spinoff of Trident called Flexity. “Our entire business model is leveraging our I.P.,” Mr. Hawker said.

Michael Milken Backs New Business Advice Site (NYT)

Michael Milken Backs New Business Advice Site

By Brad Stone

As Forbes, Fortune, Business Week and other management magazines wither away, another business media start-up with an unusual pedigree is moving to fill the void.

Fred Prouser/Reuters Michael R. Milken

Bizmore, which goes live on Wednesday, aims to be a sort of Yahoo Answers for executives at small and medium-size companies. Users pose business questions — like “Is search engine optimization right for you?” or “How do I increase online sales?” — and others weigh in with answers and vote the best responses to the top. (You can get a quick taste of Bizmore’s advice on its Twitter feed.)

Bizmore will round out that user-generated content with contributions from freelance writers on evergreen topics like how chief executives should plan their succession strategies. It has also secured the (unpaid) contributions of management gurus like Jeffrey Pfeffer, a Stanford University business school professor ,who hope to sell a few more books in the process of answering questions like “What is the single biggest and costliest mistake you have seen execs and C.E.O.’s make time and again?”

The ideas behind Bizmore are not new, of course. Other companies, including LinkedIn and The Wall Street Journal, offer similar Q&A features.

What’s most interesting about the San Francisco start-up is its backer: the financier Michael R. Milken.

The company is a subsidiary of Vistage International, an executive coaching and networking organization with about 15,000 members who pay up to $13,000 a year to attend meetings, hobnob with fellow execs and get one-on-one leadership counseling.

Vistage, based in San Diego, is partly owned by Mr. Milken, the philanthropist and former junk bond king. Mr. Milken sits on Vistage’s board and was instrumental in the founding and financing of Bizmore, the companies say. (So far, Vistage has committed about $10 million in seed financing.)

Rafael Pastor, chief executive of Vistage and a former executive vice president at News Corporation, said Bizmore’s opportunity is to provide “instantaneous information that is very tailored to a specific question or need, which some of those old media organizations couldn’t do even when they were at their height.”

The start-up, based in San Francisco, is being run by Alice Hill, the former editorial director of CNet Networks, and Jeffrey Davis, a former senior editor at Time Warner’s now defunct Business 2.0 magazine who ran BNet, a business advice site owned by CNet. The site currently runs ads from Google but plans to expand its ad inventory and also at some point charge for setting up private networks for companies, affinity groups and organizations like Vistage itself.

Should You Buy a Prepackaged Website? (Entrepreneur.com)

Should You Buy a Prepackaged Website?

It's a great way to get started quickly, but consider these factors.

By Jennifer Shaheen | June 23, 2009

The small-business website seems to be one of the simplest things to launch today. Everywhere you turn, companies are giving you what appears to be the perfect website for a startup. It's like walking into Ikea and buying a bookshelf: All you need to do is put it together. Seems simple enough, but before you buy an off-the-shelf website, understand what you're buying and what you need for your business.

Take a moment to sketch out what you need from your website. Today's websites are more than just online brochures, and the first thing to do is outline what you need from your website. Here are few features you may want to think about when creating your list of needs:

Content Control
We all want to control content on our websites and be able to add and edit text. How flexible do you need the text control to be on your website? Do you have special features in mind for working with your website content? Are you concerned about the number of pages? Will you be starting with five pages today, but grow the site to 15 or 20 pages in the next few months?

Design and Layout
Do you have an idea about how you want your website to look and work? Do you want your website to have a navigation bar at the top of your webpage, the side or both? Are you hoping to have some pages with a layout that is in one color and a separate section in another color? Some template services only allow one theme, so this is an important question.

Online Forms
Do you need your website to collect information through online forms? Will you need more than one form on your website? Where will you want these forms? For example, will you want the web from to be apart of the design like a price quote or only on the contact page?

Audio/Video
Will your website be providing audio or video? Do you have the know-how to code these items for the web, or do you need your website application to help with this service? Do you know how large your average file size on your video will be? Some applications limit uploads over certain sizes.

Sales
Are you planning to sell online? How many products? Do you want your website to have all the tools needed to collect credit cards securely? Do you want to show two or three views of your product? Do you want exact shipping costs calculated based on your products' weights? Will you need your website to provide the orders to a third-party fulfillment company or distribution center?

There are many questions here, and many more you should ask yourself. By taking the time to outline your needs now, you can know what you're shopping for in a website application provider. Think of it like making a grocery list before you go food shopping: If you don't have it on the list you may forget it, and then get distracted by the other things on the shelf. Buying off the shelf means knowing what tools you need that application to provide. This outline will also prepare you to review set-up costs and monthly budget.

When you use an existing application, you're essentially borrowing it. The design and function doesn't belong to you. You provide the images, video and content but the application is licensed to your business.

Evaluating Web Applications
Now that you have your list, you can go shopping find the prepackaged tools that fit your needs. Start by reviewing magazine articles, blogs and support pages. These resources will provide you with expert reviews, customer feedback and a realistic expectation about support. Most applications provide a test drive, but until you really use something you never know what it's missing. The support pages or knowledge bases on web applications will tell you about issues, past bugs and open items. Another great place to start understanding the application you may be interested in are the customer forums. Not all applications offer this type of community, but those that do are giving you a great place to look around and see what they and other customers do to support one another. Remember: A website uses technology and with new browsers and upgrades things can change. Be aware of how they handle change.

Read the Fine Print
It's not really fine print: The terms of service agreement on every website application tool is open and available for review at any time. Take a few moments to read through this agreement because you'll have to check that box before you work with the company. Outlined on the service agreement page are the acceptable use policies, fees, licensing agreement and copyrights. It will also outline the company's policies regarding protection against fraud.

Once you've found an application that meets most of your needs, recognize that a web application will never be perfect. Buying off the shelf means cost-effective, and with this decision you're telling yourself that's the priority. Perfect means custom, and that's a different journey with a different budget. When you're starting out or growing, "compromise" is a word every business owner comes to know. When buying a website in a box, you'll find the right solution for your budget if you understand it's a compromise that will lead you to a successful tomorrow.

Jennifer Shaheen, the e-marketing and Technology Therapist, has more 10 years experience working with small- to mid-sized businesses on their e-marketing and web development needs. You can learn more about her by visiting her web site, TechnologyTherapy.com

7 Essential Startup Steps (Entrepreneur.com)

7 Essential Startup Steps

Make sure you’ve covered all your bases before you launch.

By Rich Mintzer | June 05, 2009

Yes, there are thousands of businesses you could start, with more emerging daily thanks to new technology and good old-fashioned ingenuity. Yet despite the vast universe of possibilities, there are a few essential steps you need to take before starting a business, any business.

1. Do your market research: Just because you build it or sell it doesn't necessarily mean anyone will buy it. The first essential step is to research your potential market. Who needs what you are offering? Is there space for your product or service in the market or is the market saturated? Is the market national? Is it a niche? Can you define your ideal customers? These are all questions that need to be answered before you even consider starting a business. Too many entrepreneurs have found out the hard way that there was not enough market share for them to capture. Others have realized that their target market audience was far too limited to make their business work.
   
2. Show yourself the money: You can't start a business without capital. Determine what you have, what you will need and how you will go about getting it. If you plan to seek investor funding or financing, start writing a business plan and practice your pitch. Research the costs associated with your business. Know how much money you'll need and decide where it could come from.
   
3. Hire a good business attorney: You don't necessarily need to have an attorney on a retainer, but you'll want to hire an attorney experienced with new businesses to help you get started. Your attorney can advise you about such things as drafting contracts, reviewing your lease and determining the right business structure. "A good attorney will know what it is that you are trying to do and help you structure your business in a way that will be beneficial to you," says Chris Talis, senior partner at Hedgerow Mergers Acquisitions in Teaneck, N.J. The best way to find a good attorney is by referral or through networking.
   
   
   
4. Hire a good accountant: An accountant will work in conjunction with your attorney and be instrumental in determining the best form of ownership. He can also help you establish bookkeeping and other record keeping procedures that can keep you on track for years. Most important, a good accountant will help with tax planning. "You will also want an accountant who understands the state laws, since every state has its own little intricacies, such as sales tax issues," Talis says, adding that it's important for your accountant to be familiar with startup ventures.
   
5. Decide on a business structure: Your choices include sole proprietorship, partnership, corporation, "S" corporation or limited liability corporation (LLC). Personal liability, taxes, paperwork and regulations vary greatly among the different legal business structures. Your attorney and accountant will play a key role in assisting you in this important decision.
   
6. Decide on a business name: It may seem obvious and simple, but the name is how your business will be known to the world. The right name says a lot about your company. Make a list of potential names and narrow the list down to the one that best describes your company in a few words, while being catchy, easy to remember, easy to pronounce and easy to spell. You should also consider how it will translate to a web domain name. You'll also need to do research to see if there are a) similar business names and b) similar domain names.
   
7. Get all necessary licenses and permits: Along with a business license, you may need to get additional licenses depending on the type of business and local laws. Many professionals, such as contractors and real estate agents, need to be licensed in the states in which they work. Additionally, you may need licenses to manufacture and/or sell specific products such as liquor, firearms or even lottery tickets. Research all licenses applicable in your county and your state. It's also extremely important to know the zoning laws before you open a business. Don't assume the zoning laws don’t apply to you. You can get information on zoning from your local county clerk’s office.

There are definitely other important steps to getting a business off the ground, such as finding a technical expert and launching a website (a must in today's competitive market). However, if you've taken the seven steps above, you will find yourself in a confident, business-ready position.

How to Research a Low-Cost Franchise (Entrepreneur.com)

How to Research a Low-Cost Franchise

Does that franchise concept really deliver? Here’s how to find out.

By Carol Tice | Entrepreneur's StartUps - June 2009

URL: http://www.entrepreneur.com/magazine/entrepreneursstartupsmagazine/2009/june/202004.html

Markus Romero didn’t like crunching numbers or sitting behind a desk; he was busy managing nightclubs and operating mobile tanning salons in Las Vegas. But after he discovered Instant Tax Service, his attitude changed.

He was so intrigued by Instant Tax’s model of targeting low-income tax filers that he took a job as a trainer for a large Instant Tax franchisee. Romero, 36, also grilled other franchisees about their first-year expenses and profits. He found the calculations easy, and he liked helping people get quick refunds. He was impressed that the franchisor offered a first-year buyback program--a strong indication that Instant Tax was confident in its model.

In April, Romero became an area developer for Instant Tax in Albuquerque, New Mexico. He opened his first franchise for just $34,000 and plans to spend the tax off-season helping others open Instant Tax units. His advice to people investigating franchise offers: “Go out, get your hands dirty and see if it’s for you.”

With banks tightfisted on lending right now, low-cost franchises are attracting a lot of interest, and there are hundreds of them to choose from in every imaginable business sector, from automotive to technology. (About 25 percent of Entrepreneur’s Franchise 500^® companies have starting costs less than $50,000.)

You’ll need to do some sleuthing to find out whether a particular low-cost franchise is really a good business opportunity and if it suits your own interests and skills. Many would-be franchisees skimp on research, making an emotional purchase because they personally use a service or like a product.

Particularly if the franchisor is fairly new, you’ll want to dig deeper to learn about the success of the franchisor’s concept. Street Smart Franchising co-author Joseph Mathews says, “Find out what their motivation is for franchising. A lot of companies don’t have strong businesses, so they get into franchising because the economics aren’t good enough for them to expand the normal way.”

Don’t get dazzled by a franchisor presentation; ask hard questions of both franchisees and the franchisor before signing on, says Mark Siebert, CEO of consulting firm The iFranchise Group. “There’s a level of financial analysis that often doesn’t happen,” he says. “You should assess the risk and possible return.”

A key issue to research is how many franchisees have failed over the years. Talk to franchisees and see if they’re enthusiastic about how they’re treated by the franchisor, Siebert says.

It’s also critical to understand what you’ll be doing on a daily basis as a franchise operator. Many low-cost franchises, particularly homebased ones, are heavily sales-oriented. Siebert recommends you “ask yourself, ‘Am I comfortable selling? Can I sell this product or these services?’”

Elements of Success
When she looked into the Merle Norman franchise, April Walter decided she definitely could sell the 77-year-old beauty chain’s products, which have a long-standing, loyal clientele. Though she had used the products herself, Walter, 36, didn’t just automatically sign up; she compared several franchise concepts before concluding it was the best fit for her market and her skills as a former HR executive. She opened her Merle Norman Studio in a new regional mall in Macon, Georgia, last October for about $60,000 and projects first-year sales of $170,000.

She was impressed by what Merle Norman had to offer, including three full weeks of training and a franchise fee of $0. The company helped Walter negotiate her lease and design the studio layout. “Merle Norman had three things I was looking for: low startup cost, a strong support system and longevity,” she says.



Walter interviewed several franchisees before signing up and was comforted to learn the average tenure was more than 10 years. From frank conversations with franchisees, she learned what the costs would likely be and how long it could take to become profitable. Based on her research, she estimated it would take six months to a year to see a profit. But even in the down economy, she says she was close to breaking even after just four months, thanks in part to her highly trafficked location.

Strength in Numbers
Thorough research is more important than ever in a sluggish economy, says John Reynolds, president of the International Franchise Association Educational Foundation. It’ll be hard work to land customers when consumers are skittish about purchasing, so you’ll want a strong organization that supports your efforts as a franchisee.

“The basics are even more important now,” he says. “If it’s a small franchise, talk to every single franchisee. This is like becoming part of a family, and you want to know everything about them.”

One good way to find out if a franchise offer is a strong one is to compare the offer with those of other franchisors in the same business segment. When Romero looked into tax-preparation franchises, he discovered some of the big names didn’t have any franchises available. Others didn’t do TV advertising, preferring guerrilla tactics such as sandwich-board ads. Instant Tax supported franchisees with a strong national advertising program that included TV and radio ads, and a national 800 number that would refer prospective customers in his area back to his store.

Once customers come, he says, they usually return the following year and tell friends. Franchisees told him to expect annual growth of 20 percent to 30 percent, but Romero says he’s already seeing growth rates that are even higher. His own enthusiasm for the concept is also helping drive repeat business. “I found I like solving problems, putting out fires and creating wealth,” he says. “I do that with every client.”

Business writer Carol Tice is a regular contributor to Entrepreneur, The Seattle Times and other major publications.

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100 Franchises to Start for Less Than $50,000
It’s a common misconception that franchising just makes rich folks richer. They say it takes money to make money, but the following 100 low-cost franchise opportunities offer a proven system, brand recognition, training and support for less than $50,000 in startup capital.

Here are the top low-cost franchises, listed in order of their rankings in Entrepreneur’s 2009 Franchise 500^®. Whether you want to start a cleaning business or tutor the children in your neighborhood, these franchises can make you a business owner without costing a king’s ransom.

This list is not intended to endorse any particular franchise company; it’s just meant to get you started. You should only buy a franchise after conducting your own extensive research. Be sure to read the Franchise Disclosure Document carefully, contact existing and former franchisees, and consult an accountant and attorney. --Emily Weisburg

Listing compiled by Tracy Stapp

Click here to view the complete low-cost franchise listing.