The U.S. Census Bureau tracks all the useful demographic details about our cities. It is cumbersome to sift through the statistics so I use a website that helps sort the data and reduces research time significantly.

The website is ZipSkinny.com. The site enable you to choose any zip code in the US and see the following information:

– Education levels
– Income
– Occupation
– Marital Status
– Age/Gender/Race Demographics
– Stability/Newcomer Appeal

ZipSkinny also lets you compare zip code’s stats. This is useful if you are choosing between locations for a store selling high-end baby clothes for example. With ZipSkinny you can find the location with higher income and more children.

ZipSkinny provides you the high dollar market intelligence you need to make informed business decisions.

Check out the screenshot below of a sample of zipskinny’s abilities or check your own zipcode at ZipSkinny.

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Buying a Franchise can really give you a heads up when starting your own business. You get the support of an established brand, the backing of professional advertising, and a good reputation with some franchises. Others may have little to no brand awareness and you will be risking that the franchise will take off. Even if they do, they may not be right for your area…or they may not have your best interests in mind. There are several things you need to do before you get into a franchise.

Here are 5 tips to help you on your way:

1) Research each Franchise Opportunity – What is your upfront cost going to be? Don’t just ask the company, research online, and ask other franchise owners. Make sure it’s exactly what the company is telling you. What kind of restrictions does the franchise put on you? How protected is your territory? Does the Franchise company make money selling franchises, or does your success impact them directly?

Do they have a vested interest in you doing well? These are all questions you should ask current franchise owners, as well as the franchise company. Find out how many of their franchises have failed in the first year, what the average profit margin is…etc. Know who you’re dealing with before you do business.

2) Research your Local Area – If you’re planning to open a coffee franchise, and you already have 5 Starbucks, 2 non-franchised coffee huts, and a Dunkin’ Donuts in your neighborhood…the market might already be a little crowded. Be aware of what is around you. Research the kind of establishments that have lasted in your local area and which have failed.

If you open a fast-food resteraunt in an area where people are health-conscience and other fast-food resteraunts have failed, you probably won’t have good odds of success.

3) Analyze your life – Are you really ready for this? Do you really want to work in that Franchise every day for the foreseeable future? Do you have the financial backing to make it through some tough times if you have trouble early on? Is your place in life going to support an ongoing commitment? If you are banking on your wife being half of your labor, do you plan on having kids in the next year? Think about what your life plans are and make sure it meshes with your franchise/business plans.

I realize that you can’t plan for everything, but keep in mind, owning your own business is a little bit easier to close than owning a Franchise. A franchise has certain commitments from you the fanchisee so it is more difficult to get out of a franchise without some additional costs. With a non-franchise you won’t have as many obstacles to closing.

4) Research your Lender – Can you trust your Lender? If you’re borrowing money from family to get this started – will you be ruining a family relationship if this falls through? If you’re using a local bank or other lending institution – do they have the financial backing to see you through in case you need to come back for more funds?

5) Plan an Exit Strategy – You need to have a worst case scenario exit strategy at the very least. If things don’t go well – can you sell the franchise? Can you sell it to anyone, or does the potential buyer have to be approved by the company? What happens if you have to shut down due to low sales?

These are just a few of the things you need to plan for, and be on the lookout for when preparing to buy into a franchise. There are a lot of great franchise opportunities out there, you just need to make sure that the one you’re interested in is right for you.

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Here’s the email I received below:

Related Posts:

• Sunrocket vs Vonage
• Starting a Business on a Shoestring

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What is Owner’s Discrtionary Cash Flow (ODCF)? When you are evaluating a business for purchase this is a very important figure to calculate. Also if you are valuating your existing business, you’ll need to calculate this figure to derive the propert market value. A simple answer is “The amount of money a new owner will be able to take home out of the business annually.” Most of the components of ODCF are easy to calculate such as net profit and owner’s salary. Other components may be a little more tricky to ascertain.

The following are the most common elements of ODCF:

• Net Income
• Owner Salary
• Depreciation/Amortization
• Interest Expense
• Non-recurring expenses
• Owner perks such as car, health insurance, etc.

Below is an example calculation of ODCF:

Net Income $150,000

Depreciation 50,000

Interest 25,000

Owner Salary 100,000

Owner Travel (personal) 5,000

Owner Auto (personal) 5,000

Owner Health Insurance 8,000

———–

Owner’s Discretionary Cash Flow $343,000

In this example if the market valuation in your industry is 4x ODCF this business would be worth 4 x $343,000 = $1,372,000.

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If a business is set up as a corporation, the owner may want to sell you the shares of the business. This is called a stock sale. Seller like this type of deal because their profits get taxed at capital gains rates instead of income tax rates which is often higher.

An asset sale on the other hand is a sale in which you buy the underlying assets of the business. For example if you are buying a resteraunt you would buy all the equipment and assume the lease on the property or purchase the building if that’s the case.

So what’s the big difference to you – the buyer? Buying stock not only transfers the assets, but it also transfers the liabilities. If someone slipped and fell 2 days before you buy the stock you would still be on the hook for the liability. Another benefit of an asset sale is you get to depreciate all the assets by class. This can be tax-advantageous. If you do a stock purchase, the assets would have already been depreciated and you won’t get as much depreciation value to reduce your taxes.

Stock sales for small businesses generally don’t make sense for small businesses and as such are rare for small business. As a business consultant doing acquisition and brokerage I rarely see stock sales.

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The Mozy online backup service I talked about in another post is now available for Macs in public beta.

Try out Mac Mozy now.

Related Posts

Remote Backups Using Mozy

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I decided to give it a try since I firmly believe your data should be in “the cloud” that is the internet for the utmost reliability and accessability. I mean backups to tape or an external drive is great, but what happens when your whole house catches on fire and not just the room with your PC? It’s not a very palatable situation. This is where the remote backup solution comes to the rescue.

SETUP

Mozy software download takes about 5 minutes including install. You sign up as a free user [2 Gig] or you can upgrade to unlimited storage for $4.95/month. Either way it’s a great investment. $4.95 is a bargain if you have the need for more storage. The key here is mozy makes it easy and transparent to you. The biggest problem with backups is lack of performing them. Mozy creates a painless way to ensure backups of your important data.

Once you install the mozy client, you decide what types of files to backup. I chose spreadsheets only for my initial test. I wanted to backup and do a restore as a test of the service.

I then took my initial backup. The initial backup will take longer as all the files you chose must be backed up. Subsequent backups will only backup files that have changed with versioning and new files that were created.

RESTORE

One of the great features of mozy is the restore. With the client running all you have to do is right-click on the folder that contained the file you want to restore. With the windows explorer integration you’ll see an option to restore from mozy.

I deleted the files in a folder and right-clicked and restored my files. This is the most intuitive option to restore the files. Alternatively, you can also login to the mozy website and view your backups and restore them through the web. The Windows integration also gives you a 3rd option.

If you click on “My Computer” you will see a Mozy icon.

If you click it you can browse through your directories to the files you want to restore and restore them that way.

Mozy gives you plenty of options. Use what is intuitive and easiest for you.

FREE or INEXPENSIVE

If you don’t need the larger capacity, you can choose to use the free quota of 2gig or upgrade affordably to the unlimited plan for $4.95/month.

You can also earn extra storage quota of 256MB per referral. If you enjoyed this article and would like to try the Mozy service click here to sign up and you will get an additional 256MB of quota for a total of 2.25 Gigs. I will also be rewarded with 256MB of service as well. ) I write this blog for free, but it’s nice to get some kickback every now and again even if it’s in freebies.

Try this service out. I am sure you will find it a useful tool. I tried the Xdrive service some time back and compared to Xdrive, this service rocks. It’s easier, less intensive on your system, and simple.

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Having multiple monitors can become confusing if you have only 1 taskbar. The stock Windows setup will show 1 taskbar on one or both monitors. This makes it hard to know which monitor your application window is displayed on. The solution is to have a multi-taskbar software app installed. I recommend Multimon.

Monitor 1: Only apps running on that monitor show up in its own taskbar

Monitor 2: Only apps running on monitor 2 show up in its own taskbar

From the authors site:

“What it does:

• It adds second taskbar to the extended desktop on Monitor 2 (either right or left)
• It can add third taskbar to the second Extended monitor if you have 3 monitors setup.
• It shows only applications from that Monitor
• It hides the applications on Monitor 2 from normal Windows Taskbar
• Adds a Move to Monitor button to all windows applications.
• Add Text Clipboard Extender (new 1.1.)”

Best of all it’s free!

Now that our taskbars are tidied up our next order of business is to be able to reorient our desktop from landscape to portrait and vice versa. The software iRotate will achieve this goal. No it is not some fancy white Apple product. iRotate will allow you to change the orientation of your screen from landscape to portrait. Portrait is quite useful for editing documents for example. You can’t just physically rotate your screen and have your screen reorient itself. You need some software to do so. Windows doesn’t do it out of the box.

You may not control the world, but you can at least now you can control your desktop.

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Reasons you need a business plan:

1. Set specific objectives for managers
2. Share your strategy/priorities with your partners
3. Decide what personnel is needed
4. Decide what new assets are needed and if you will need to buy or lease
5. Share your business objectives with the management team, new employees, and investors
6. Sell your business
7. Valuation of the business for formal transactions including finance and estate planning
8. Create a new business – Investors will need to understand your plan before they choose to invest.
9. Support for loan applications
10. Grow your existing business

A business plan formalizes and helps you refine your objectives, helps you plan your growth, and creates an action plan for your next steps. There are several components of your business plan.

What to include in your business plan

There are four main parts to a business plan:

1. Description of the business
2. Marketing plan
3. Financial plan
4. Management plan

You should also create an executive summary. Below is an outline of what goes into a business plan. This is only a guideline. Each business plan is unique.

Elements of a Business Plan

• Cover sheet
• Statement of purpose
• Table of contents
• Descriptions of your business
• Marketing plan
• Describe the competition
• Operating procedures
• Personnel
• Financial data

Your financial data should include:

• Loan applications
• Capital equipment and supply list
• Balance sheet
• Break even analysis
• Income projections (profit & loss statements) that could include a three-year summary, details by month and first year, details by quarters, second and third years.

You should include supporting documents:

• Tax returns of all principals for last three years.
• Personal financial statement
• Lease or purchase agreement for building space
• Copy of licenses, patents, and other legal documents
• Copy of the resumes of principals

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1. Prepare - Without proper preparation you will lose. First make sure you understand your objective and set your goals. Next try to understand what it is that the opposing party wants. Also get help from experts, such as an accountant, attorney or other subject matter expert.
2. Timing – Timing is important in any negotiation. There are times to press ahead, and times to wait. When you are looking your best is the time to press for what you want. Beware of pushing too hard.
3. No Room for Egos – It doesn’t matter who was responsible for a deal conclusion. The best negotiators make the other party feel it was their idea.
4. Listen – Encourage the other side to talk first. Whoever mentions numbers first, loses. It’s generally better to wait and let the other person go first. It also gives you an idea of what their position is before you speak.
5. Ask for the sale – A paradigm of sales people and it applies to negotiations as well. If you don’t ask, you don’t know if it will be accepted. If there is something you want, ask. Calculate your highest reasonable price and ask it. You’ll be surprised. Sometimes a highball request gets accepted. You won’t know unless you try, but be reasonable.
6. Anticipate compromise – Expect to give concessions. The other party should expect the same. Don’t accept the first offer as there is usually a little bit more in reserve. Plan what you are willing to give up and come up with alternative offers beforehand. This goes hand in hand with #1 – Prepare.
7. Get to a Commitment – Offer a commitment and ask for the same in return. It could be as simple as “I will review the numbers tonight. Tomorrow I will give you my valuation, then we’ll talk terms.” Be timely, and offer a timeline.
8. Its not your problem – “My dad is sick.”, “I have high expenses.” Don’t internalize their problems. Remember this is business. You create a valuation and if it doesn’t meet it don’t let the other party rationalize for you.
9. Don’t compromise your values – If negotiations transcend your boundaries, let it go or you’ll be asking yourself later “was it worth my soul?”
10. Confirm Commitments – Confirm expectations at the end of each meeting and recap any deliverables by all parties. Remember negotiations need to be concrete to move forward.

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