How Franchising Works

Franchising is a popular way of doing business in which an individual or company can purchase and operate a proven business model, this avoiding the risk of starting something that is completely new and uncertain.

One of the main reasons why people buy franchises is the reduced risk. Most small businesses fail, and the main reason for that failure is ‘’weak management’’ (1). A franchised business addresses that issue by ‘’leasing that managerial know-how’’ (1) to those who purchase the franchise.

Another reason why I would buy a franchise is because it allows small businesses to enjoy some of the benefits that only big companies would have otherwise. Some of these are: reduced price for supplies since they are bought for the whole chain in bulk, instant recognition from customers because of standardized products and service in all locations, and chain-wide marketing campaigns.

The downside of purchasing a franchise is the lack of freedom to direct the business, ongoing royalty payments that depend on sales rather than profit, and non-competition rules outlined in the franchise contract.

One thing to point out here is that there are some kinds of businesses that are so similar one to another that can one could think that they offer some of the benefits of a franchise, without the rules and limitations of a franchise. An example of this are Chinese restaurants. When I go to a Chinese buffet I know what to expect from the beginning, their food is almost the same and they even look very similar one to each other. The key here worth considering is that they don’t have a proven successful managerial method, so a new business owner would have to create one from scratch, which implies more risk.

Would I ever consider owning a franchise? Yes; I would do it despite all the limitations that owning a franchise might entail.

1.      Lee Ann Obringer. “How Franchising Works’’. Taken from http://money.howstuffworks.com/franchising2.htm

Journal Entry Lesson 3

This week I realized that I can still be creative. It feels like if my mind had been numb for a while and now it is stretching and working hard again.

My wife has an idea for a company she would like to create in the future. As we were talking about it, I gave her some advise based on what I have learned by reading ‘’The Lean Startup’’ (by Eric Ries) and how I think she could test her idea, turn it into a business and make it scalable. I was very surprised that I was able to come up with those ideas after struggling so much last week trying to come up with business ideas for my $100 project.

As I went over this week’s material, I was especially moved by President’s Hinckley testimony in the dedication of the building that bears his name.  It was an invitation to me to be more faithful and trust that the Lord can help me with the challenges I face.

I have a few ideas chosen for the $100 project but, most importantly, I feel a new determination to make a real effort to make it work and learn from it.

I am also paying more attention the problems I find every day and I’m writing them down. I think that if I do this consistently for the rest of my life, I will become more creative and maybe I will find a business opportunity that I can take advantage of.

Acton Hero: Tom Monaghan

Tom Monaghan was raised in an orphanage. From humble beginnings, he turned DomiNick’s Pizza into the world famous Domino’s Pizza building a revolutionary business around pizza delivery. As he became richer and successful, he became obsessed with ‘’toys’’ and impressing others with his success and the things his money could buy.

One day, when he was reading a book written by C.S Lewis, he realized that he wasn’t living his principles and that something had to change in his life. His priorities changed and he sold the company. From then on he has dedicated his life to help others through education. He uses his money to as much good as he can.

I can see how sometimes I focus too much on my desire to be successful, even to the point of wanting to compare myself to others. That is not correct, and doesn’t lead to true happiness. Tom Monaghan is an example of a person who was brave enough to realize that he was doing wrong and change his course in order to be truly happy.

Starting the $100 project

This week I bought the supplies for my $100 project. I also helped my wife start her project with 500 pesos (around 35 dollars) to buy and sell women’s handbags.  For the $100 project I went to downtown Mexico City and bought high quality USB drives for very good prices in a very convenient location with a very reliable and recognized wholesale supplier. The real challenge was obtaining the mini stuffed bears; they were really difficult to find and suppliers are in a location that is very hard to reach and they are not very reliable. I am seriously considering changing the project a little bit using handmade hard dough figures instead or finding another design for the USBs. I felt firsthand the frustration of an entrepreneur when things don’t go according to plan in the most unexpected way and solutions need to be found. I’m not too worried about it though, I think I will be able to figure something out; the only thing I’m worried about is the project’s deadline and being able to obtain the goal of $100 in profits by that time.

My wife and I set a very bold goal. We want to move to New Zealand in a couple years when both of us graduate from college. We are starting to save up money for that and do the research in order to be prepared, get work visas and find jobs. Our plan is to live there for a couple years and then come back to Mexico and obtain a scholarship for my Master’s Degree in BYU- Provo. We also talked about starting a Mexican Food restaurant in New Zealand or a travel agency for people in New Zealand and Australia who want to visit Mexico and Latin America.

Acton Hero:  Desh Deshpande

He emigrated from India to the U.S and founded Cascade Communications and Sycamore Network.

Some of the great lessons I can learn from him are that I must learn from my mistakes. We attempt to do things and fail, it is normal and it’s not the end of the world. Making those mistakes helps us grow and expands our comfort zone. When we look at those failures from a greater perspective we realize that things are not as bad as they seem at the moment.

Another great lesson is that it doesn’t matter where people start but their motivation. Motivation is what matters to be successful in life. Many times we don’t realize how lucky we are to have all the resources, technology and comfort available to us until we lose it or see other realities with our own eyes. We must understand that everything is possible for us if we are motivated.

Acton Hero: Ken Zolot

He has founded robotic companies. As a child he had problems because of his excessive curiosity and desire to do things differently.

I learned that technical issues and people issues are interrelated. Human relations are very important for business to work properly. We are accountable to others as we are all connected and in order to lead effectively we must understand people’s motivations and help them.

When we create a new business or product it is important to ask ‘’who cares?’’. We tend to believe our product is the best thing in the world but we need to confront the brutal facts trying to understand what customers really want, what keeps them up at night?

Napoleon Hill: Think and Grow Rich

Napoleon Hill: Think and Grow Rich

How do people reach great success in life? Why do some people make extremely great amounts of money even when coming from humble origins? Napoleon Hill presents a series of steps towards riches in his book ‘’Think and grow rich’’. Like a time capsule, the book will teach the secret for money making from a previous point of time proving that the principles taught here can be effective at any time, place or circumstance.

Written right after the end of the Great Depression, Think and Grow Rich gives insight of a rapidly changing world in the beginning of the 20^th century mentioning ‘’contemporary’’ examples like Henry Ford and Thomas Alva Edison, both being part of a large number of people that were able to think and become rich and whose lives and experiences served as examples and research material for the principles of success. At the same time, Hill presents the modern reader with an interesting perspective of a world recovering from a great crisis and with big optimistic hopes for the future in a world he didn’t know was about to be devastated by a second world war. Nevertheless, many of his prediction for a future world were fulfilled and the principles taught in the book continue being valid.

Napoleon Hill states that the secret to riches originates in the human mind and its ability to affect the reality around it. Although I don’t believe in ‘’mystic forces and energy’’ as some people could call it I do believe in the power of positive thoughts and attitudes and how they affect the outcome. I also believe that there is a God (referred to as ‘’Infinite Intelligence’’ by Hill) who is happy and willing to bless us because he loves us and he is just waiting for us to decide we want his blessings and do the necessary actions towards them.

The power of the human mind is harnessed through the principle of ‘’auto suggestion’’ which cultivates a combination of positive thoughts, productive excitement and action plans towards the desired goal. I personally believe and agree that we become what we think about the most, not magically, but because of a combination of our own efforts motivated by constant positive thinking and excitement and divine aid from a loving Heavenly Father.

Part of the ‘’auto suggestion’’ process is centered on faith, not as a mere blind desire, but as a hope on things not seen that leads the person toward action and a ‘’burning the ships’’ mindset like the one that led Hernan Cortes to the conquest of the Aztec Empire and the creation of the New Spain as he wasn’t able to turn back and escape once he started his quest.

The book also touches other points like the importance of working along with others in a ‘’master mind’’ alliance of people with similar interests trying to reach a common goal. Several heads can use the principle of auto suggestion (or ‘’law of attraction’’ as it is called by other authors) better than only one individual.

One of the great jewels found in the book is the teaching on perseverance: ‘’winners never quit, and quitters never win’’. You never know how close you are to success, even if it feels farther than ever. Don’t stop digging; the gold vein could be a meter away.

No matter what your profession, nationality, age, or goal in life is; this book will teach you how to develop the mindset of success and perseverance. Through examples of real life people who reached great riches you will learn how these principles were applied and you will be able to Think and Grow Rich.

   

Similar Books:


     

Rekindle the fire

This week I had an opportunity to rekindle the entrepreneurial fire through a couple of experiences at school and with one of my friends.

An old friend of mine talked to me on Facebook during the week asking how things were. He asked me if I had already quit my job; I told him that I haven’t done it and then he asked me: ‘’then… what is your plan for financial freedom? How are you going to do it if you are still tied to your full-time job?’’ This really made me think about my life, my goals and my plans to achieve them. Am I keeping my job for now as a part of my goals or because of fear? That is something I need to think about.

At school I brainstormed ideas for businesses. It was interesting to see how a few of them have changed since the last time I did something like that. I had to think about problems that I see in daily life in Mexico, things that are missing or are uncomfortable to obtain. It was much easier to come up with ideas keeping those questions in mind.

Here are some criteria that helped me come up with ideas. This was provided by my BYU-Idaho class on entrepreneurship:

1. Complaints people have or gripes they hear from friends or people in the community.
2. Inconvenience experienced when purchasing a product or in acquiring a service.
3. A product or service “flaw” that is difficult to deal with, such as packaging that takes way too much time to unravel.
4. The pain that comes from paying way too much (i.e., getting “ripped off”) for a product or service.
5. Money that seems to be “lost” with little value returned.
6. Something that can make life easier.
7. A product or service that can contribute to health or well-being (literally removing pain of one kind or another).
8. A simpler way to access a product or service (less hassle).
9. Dreams that you’ve had as a child.
10. Successful businesses around you, maybe one that you feel you could do a better job with.
11. Hobbies and activities that people invest a lot of time and resources into.
12. Businesses or services that need simplification.
13. Read this article for more ideas.

Linking and Analytics

This week I learned about the importance of links to my website.

Links not only bring visitors who follow them into the website; they also improve the site's relevance for search engines. Search engines like Google analyze how many ''backlinks'' connect to the site giving it credibility and relevance so it shows higher in search results.  Quality is also important since Google knows tricks people use and punishes bad linking practices. It is important that the links are relevant. Links coming from famous and highly visited websites benefit much more.

Useful resources:

Intro to linking

Linking strategies

More linking strategies

I have also been using Google Analytics and exploring it almost every day for the last few weeks. 

It is really a great tool that that now I can't imagine living without. In order to install it you have to place the analytics java script code on the site, or in the case of Drupal users, install the Drupal Analytics module that places the code automatically in all pages.

Analytics allows website owners to track visits, trends and how their goals (conversions) are being met. This data is more useful when used to determine trends. This way I have been able to determine what actions and changes have worked on my site, which campaigns are being more successful and how visitors interact with my site in general.

Useful resources:

Introduction to Google Analytics

Guide to the Analytics interface

Interpreting reports

Social Media - Continued

Essential to any marketing effort for a product, company or website today is a Social Media Strategy, especially if it is looking to market to young people.

There are many social media courses, articles and tutorials out there that explain the technical side of it. Here are some of the lessons I recently learned about the generals points for social media:

Be different. It is important to stand out from the crowd. The average person today is constantly bombarded with advertisement. It is not enough just to show your product anymore; you have to make them understand why it is different and cause an impression that won’t be overlooked.

Be authentic. Customers are not easily deceived anymore. They look for multiple sources and know when a company is just ”trying to sell them something”. Answer their comments, interact, be a person and engage your customers and visitors so they recommend you to their friends through their comments and interactions.

Be creative. This goes hand in hand with being different. Don’t just do what you learn about social media but look for ways to innovate, to create new things.

Have a strategy. It doesn’t help to spend money and time on this if you don’t have a goal or purpose for it.

Use your tools. Take advantage of Google Analytics and use metrics to measure your social media ROI so you can learn what works and refine your strategy.

Useful Resources:

12 Awesome Social Media Tutorials

SEO

Here we come to the mystical world of SEO. 

I have to admit that I had heard about ''SEO'' for a long time but I never knew what it meant until a couple months ago when I started learning more about Search Engine Optimization, or how easily can search engines find your website.

There are a few factors that can affect your website's SEO:

Keywords: Include Keywords that people are looking for but are also relevant to your website. It is important to focus on quality rather than spamming the website with the desired keywords.

Back-links: How many links lead to your site? This is a very important point too, and these links must be high quality links too, not just spam.

Site optimization: How long does it take to load? Is it easy to see in all screen sizes? What about mobile devices? All of this affects visitor experience in your site and how likely they are to return.

Be unique: Not only create original content; make that content so unique that your site stands out from the crowd.

Make it shareable: If you were a visitor, would you share what you found on Facebook or another social network? Make your content interesting, and make sure your URL's are simple and reflect what your content is about.

There are much more ideas to be applied on a site for SEO.

I recommend this guide.

And if you use Drupal you might want to take a look at the SEO Checklist Module

I still have a long way to go for my site. I'm learning and applying these things by trying and making mistakes.
My site (In Spanish): www.saliradentro.com

Improving my ads, analyzing with Analytics and seeing some progress

Very slowly but very surely, my business project is getting up there.

My wife and I went out on the weekend to get more pictures of some places I wanted to write articles about and we ended up visiting 7 different free museums in downtown Mexico City that afternoon alone. There were a lot of museums we didn't have time to visit since we were very tired after that but now I have lots of pictures and experiences to write about.

I installed Google Analytics in my site using the Google Analytics Drupal module. It's amazing how much information I can obtain with it and I have been using it to improve my site. I especially liked being able to see the bounce rate to see how effective my landing page is after visitors get there as a result from my Adwords campaign.

I am also working on a new version of my site trying out different Drupal distributions and themes before I make changes in the actual website. 

I also started my Adwords campaign. At first I was having a very high bounce rate as I was sending visitors to my home page, but I found much better results as I created more specific ads that lead to specific sections of my site, especially to the ones that are better connected to products from my affiliate networks.

https://support.google.com/adwords/answer/2453976?hl=en

https://support.google.com/adwords/answer/6080602?rd=1

Ads, getting traffic and getting ready

The website (in Spanish) is taking shape, although I really want to make some major changes on it. I found some interesting Drupal distributions and modules that will allow me to do a complete makeover for my website and make it more like what I want it to be but I haven't had the time to do it. Another obstacle is that I don't want to lose what I already built doing an experiment that might or not work.

The solution: I am creating a local website using XAMPP to create a server and installed Drupal there, then I will create a sample of the website layout and features that I want and see how it works before doing it in my actual site. That way the process will be smoother and faster and I won't miss revenue and visits now that I'm about to start my Adwords campaign.

I am also happy to say that I just earned my first $0.10 from Adsense and I started having clicks on my affiliate ads! It's not a lot but it is an important milestone for me. I got this little traffic by creating a Facebook page about my website, inviting my friends and my wife's friends to like it and then posting links to the articles in my website.

This week I learned a lot about Adword ads. I had some experience creating Facebook ads campaigns for a couple business projects and this is quite a different system with a few things in common. With Adwords I choose the keywords I want to associate my ad to rather than purely demographic information. Adwords also provides a lot of feedback on the effectiveness of my ads and my Keywords through the ''quality score''

I am very excited about officially starting my Adwords campaign tomorrow. I also have a lot of ideas for articles and sections that I am about to create as well as a YouTube channel associated with my site and turn it into a whole online magazine.

Tips for Adwords Ads: http://www.addme.com/newsletters/issue269.htm

Getting started with Adwords ads: https://support.google.com/adwords/answer/1704392?rd=2

Getting actually started

In the last few weeks I have learned about the different types of online business, how I can use Google's Keyword Planner to analyze different business ideas and decide which one is my best option at the moment. I also learned about the different tools that I have at my disposal. Now I am about to get actually started and build my first online business. 

I have decided to merge some business ideas, adapt it to my current situation and availability of resources and focus on creating content to attract visitors and refer them to other websites who offer compensation to affiliates. I have requested my wife's help because of her field of study in college. As I talked to my dad he brought up the fact that he already has hosting space available as a benefit from our internet supplier and that I could borrow it for a few months as I start the business and then move to a different hosting service when he needs it back and I have already kick-started the business; so, right now I'm looking at the hosting service he is offering me for free and the web building tools that are available with it.

Some tools that I want to share:

This is a top 10 list for hosting companies : http://www.top10hostinglist.com/

This is a course development course I purchased a couple months ago in Udemy and I'm trying to complete during my spare time: https://www.udemy.com/complete-web-developer-course/#/

When ideas are hard to come by

I am the kind of person who finds it very difficult to get started with things. Whenever I have to write an essay I struggle for days just thinking, looking at the paper and wondering how I could start. I have discovered that the best way to start is... starting. I start writing the first thoughts that come to my mind about the subject, my mind starts working and the rest of the essay is smooth and easy. However, the ''blank page phobia'' is still there every time I have to start a new assignment. 

I discovered in the last couple weeks that the same happens when I try other things, like starting a business in this case! However, this is the solution that I found:

I started keeping notes about problems that I found around me; everything! From the difficulty of keeping my desk clean to how to improve public parking lots.

Then I started with more specific business ideas. Even if the business sounds impossible or if it doesn't make sense at the beginning. I found that if I don't let those ideas develop I will never get to the good ideas.

Then, I realized that everything is possible with determination, knowledge, perseverance, and making your idea unique, like Seth Godin's purple cow on the side of the road.

For whoever finds this entrepreneurial journal:

I would like to share some resources that are helping me refine the business ideas I have chosen. The first one is about Affiliate marketing, or how you can earn money online by referring traffic to sites like Amazon.org or even Oakley sunglasses and earn money by the sales you generate. 

The second one is a presentation about lessons learned from the success of Dropbox and Xobni

http://adamsmith.cc/from-zero-to-a-million-users-dropbox-and-xobni-les

After watching this I really felt that I was able to do anything I wanted to accomplish!