Franchise opportunities bring many entrepreneurs into the world of small business. Many people hunger for the success of many franchise owners - and overlook the failure of many who try.

By definition, a franchise is “a business system in which private entrepreneurs purchase the rights to open and run a location of a larger company.” McDonald’s, Burger King, Jack ‘n the Box, right? Yes, but the franchise world is bigger than fast food restaurants. It includes convenience stores like 7-Eleven, hotels like Hampton Inn, hair stylists like Cost Cutters, and plumbers like Roto Rooter.

Depending on the franchisor’s requirements, the franchisee boards the brand name ‘success train’ in exchange for upfront money and a percentage of revenues thereafter. The business owner (franchisee) receives training, supplies, product, advertising, and a range of support systems – just about everything to make the franchise work. Yet, there are downsides.  Among them, the franchisee surrenders independence. The franchisor has invested big bucks in development and is not about to let a first time entrepreneur run it into the ground. Again, depending on the franchisor, the franchisee can expect a complicated, multi-faceted contractual relationship.

Interestingly, there are a number of franchises available for start-up at reasonably accessible costs. For example, Entrepreneur lists 50 “low-cost” franchise opportunities. Among the 50 companies listed, there is a wide range of franchise fees, royalty fees, length of agreement, and so on. Additionally, there is a variety of expectations, cash on hand demands, and net worth demands. You would be well advised to work with an attorney specializing in this arena and to examine the nature of support and training in meticulous detail.

One thing I should bring to your attention to is the nature of the franchises on the list. Almost all of the 50 are service franchises, some of which can be run from home. Almost all of them address lifestyle issues: home/office cleaning services, tax preparers, exercise classes, training lessons, carpet cleaners, travel agencies, landscape maintenance, and pet care. In fact, seven of the top 10 are commercial or residential cleaners. These choices reflect an economy that assumes a future where consumers will be employed. These future consumers will look to keep up their homes and businesses.  These are conservative spenders who are less likely to eat out or sleep over at a franchise, but who are more likely to spend on home improvement and self-development.

Such opportunities are loaded with concerns that are subtle and not apparently part of the upfront costs. For example, your research has to determine the reputation for support from the home office; such support is part of your purchase, and if it isn’t there, you have been scammed. Upfront costs and royalties are intangible until you run the numbers, so get a fix on how this rolls out. Franchise contracts are usually unilateral and favor the franchiser; make sure you can live with those implications. Also, make sure you can meet and exceed the high productivity requirements. Finally, only you can figure out how long you are willing to owe your royalties and loyalties – to “the company store” – without resentment. If you don’t like the arrangement now, your sentiment is unlikely to change in the future.

Each year, thousands of aspiring entrepreneurs take the huge step of launching a new company.  And each year, thousands of aspiring entrepreneurs fail in their bid to start a new company!  The unfortunate truth is that the majority of new enterprises will fail within the first year, and nearly all will fail within the first three years.  Only a small handful of companies, statistics estimate about 10%, actually survive the growing pains of the business launch phase and actually become strong, profitable companies.  Although this is true, there is good news.  The large majority of companies that fail, fail due to preventable causes.  In order to successfully launch your company, follow these tips.

Write It Out

For some unknown reason, scores of aspiring entrepreneurs believe it’s possible to build the next great American empire without even writing out the idea in the form of a business plan!  This is absolute lunacy.  You must write out a detailed business plan that discusses the following:

• Management Background and Qualifications
• Complete breakdown of business model
• Marketing Plan
• Financial Projections

You can find free business plan templates online with a simple Google search.

Test Your Idea

Dreamers rarely want critical feedback from those who believe differently.  Take your idea and purposefully share it with key people who have industry knowledge.  The critical feedback these key contacts give you is essential.  They may point out huge gaping holes in your business model, or they may all be very excited for you and believe in the model.  Many entrepreneurs are afraid to engage in this step of the process because it makes them vulnerable, and strong rejections can easily damage a fragile ego.  However, the potential feedback should be viewed as absolutely essential, and you should search for it at all costs.

Raise Capital

Cash is the lifeblood of a company.  The day a company runs out of cash is the day it is out of business.  With this thought in mind, it is 100% essential that you develop a bulletproof financial plan that takes into account every worst-case scenario possible.  Determine exactly how much money you will need to develop and bring your product or service to market.  Then, determine how long it will take to be begin securing sales and generating revenue.  In most businesses, you should have a plan in place for how to finance business operations with the notion of no revenue for 6-12 months.  Once you determine how much capital that will require, determine how you will raise this money.  Do you have it in savings, can you borrow it from friends and family, or do you need to search for investors?  Will you secure a working capital business loan?

Take On Partners

Many new business owners are hesitant to bring on partners.  Starting a business is incredibly difficult and stressful.  A competent partner can help alleviate some of that stress.  Henry Ford used to say that a large portion of his success was due to his ability to always hire people smarter than himself.  If you do take on a partner, make sure to choose someone that has an exceptional skill set in some aspect of the business that you do not have.

Keep Expenses Down

Back to the money again—keep expenses as low as possible.  When starting out, it is easy to fall prey to daydreams of instant success and an easy road.  It won’t happen!  There will be bumps along the way, and if you keep your finances extremely conservative until substantial revenue is being generated, you will greatly increase your chances of escaping the launch phase of the company alive and well.  Even if you do not use it, a working capital business loan can help act as a financial cushion.  Keep your expenditures to products and services that are essential to bring the product to market.  In other words, don’t spend money on expensive office furniture, etc. 

With forethought, research and restraint, your new business launch can be a success.  Without these activities, you’re taking your chances!

This article was contributed by Jason Hoerr at Small Business Loans Direct.  Jason Hoerr is a writer for smallbusinessloansdirect.com, entrepreneur, and trader based in Charlotte, NC.

Pssst!  Your business start-up idea is not on the internet!  Internet lists don’t guarantee success.  In fact, browsing for best business startup ideas only takes you down the wrong path.  Instead, examine your passions, interests, gifts, and talents.

People search lists of ‘easy to start’ businesses (is there really such an animal?), of hottest businesses, of top ten businesses, and so forth. If you’re looking at lists for inspiration, don’t bother.

A successful search requires thought, experience, and advice of trusted advisors. Leave behind the quick and easy attitude. The only thing that truly works is - you guessed it – persistent hard work.

Find your passion and dream!

To succeed in small business, you are best served by finding your passion and dreams that fit with your gifts and talents. Let’s look at each and do some real brainstorming to find your new small business opportunity.

Make your own list of the three to five things that answer one or more of these questions:

• What do I enjoy about my current job?
• What do I enjoy helping others with?
• What do I enjoy teaching others?
• What do I enjoy talking about?
• What do I enjoy reading about?
• What do I enjoy learning about?
• What do I enjoy doing for others?

All the questions center on what you enjoy, and many ask about your relationships with others. With answers in hand, brainstorm – without looking at the internet – what types of small business startup ideas might be most served by those passions.

Identify your gifts and talents.

Ask others to help determine your gifts and talents. Seek their feedback on your top three gifts or talents:

• according to your spouse
• according to a coworker
• according to a close friend
• according to another friend

Settle on the top three or four most common gifts and talents, and brainstorm what types of small business startup ideas need those gifts and talents.

Don’t choose just one business idea … choose three! Why? I don’t want you to lock in on any one business that may or may not be right for you.  Then, you are ready to set about the task of determining which idea answers a market demand or need.

I know – it’s a lot more work upfront this way. However, the alternative is to charge ahead and fail. Too many people don’t plan and charge ahead. Do it right the first time and succeed with your small business startup ideas.

A final thought!

Once you have followed this process and if you have a personal profile from Meyer Briggs (MBTI) or similar test, see if your strengths and weaknesses help shape your decision.

Is debt-free funding even possible? It can be!  And if you are diligent, you can choose funding opportunities that will minimize your risk and improve your chances of success. Debt-free funding lets you hit the ground running without obligations to anyone.  Consider these ideas to get you “started” (pun intended):

Minimize business startup money.

Choose a business concept that demands little upfront cash, such as an online consulting business or a virtual assistant.

Or, plan a service-oriented businesses. A carpet-cleaning venture or a childcare facility, for example, demands a little upfront capital to get things going. One advantage is that costs are largely upfront and not on going.

Still other businesses are product-based, such as retail or manufacturing. Here, there will be early costs for inventory and infrastructure along with continuing inventory and logistics expenses.

Outsourcing saves time and money.

Recognize that you can’t do everything yourself. If, for example, you’re launching a    bookkeeping business, your skills are in numbers and analysis, not logo design and marketing.

But, adding staff for these tasks adds to early costs.  Consider outsourcing tasks to consultants on a job-by-job basis.  This lets you cut back on expenses and reduce the need for space, staffing, and equipment.

Start slowly, start smart.

Stagger your startup to reduce expense. Break your new business into separate segments or product offerings and limit what you do to start out. You may find you limit your need for traditional sources of small business financing.

Go at it part-time until you’re confident you’ll make it.  If you decide to launch your bookkeeping service, for instance, start by building a small base of clients to work with in addition to your full-time job.  Once you develop a client base, cut back your day job, until you finally quit and make your business your full-time career.

Let’s make a deal.

Approach your current employer about contracting for them. Your boss may be willing to spin off a segment of his business to you, and buy back your services.

If you want to launch your own PR business, you strike up a deal with your employer to use some of their facilities during the startup phase. They could contract with you for services and have the convenience of you being on site. It’s a win-win for both parties as the employer saves the costs of having an employee on board.

Similarly, a new client might be willing to enter an arrangement, allowing you to work out of their office one or two days a week.  Once you get the word out to contacts and colleagues that you’re planning your new venture, you’ll be surprised at the number of leads you can generate.

A novel approach – Save for it.

Start a savings plan now. Create a budget for the first 12 months and save as much money towards the budgeted costs as possible. This will help you with part or all of your business startup funding.

These are just a few of the alternatives to going into debt. Avoid the shackles of debt slavery and find real freedom in starting business debt free.

For many people, a home-based business is a dream come true. Being able to have the flexibility, the additional freedom, more contact with family and lower overhead are valid reasons to want to pursue this venture. And as mobile technology becomes more trustworthy, even if you don’t own your own business, a significant number of employees are working from home one or more days per week.

Many huge companies started out as home-based ventures. Jeff Bezos started Amazon in his garage. Apple’s roots are the same. Mattel started in the home of Ruth and Elliot Handler. Working from home allows you to literally keep your day job while you feel your way, experiment, build an online presence, develop a client base, poke around with different marketing techniques and expand service or product lines. About half of the tv show Shark Tank’s entrepreneur competitors (competing for investment money) operate from home. It has never been easier to launch a product or service based company from home.

Operating a home-based business has tax advantages and allows you to utilize your spouse and children for extra manpower if the business starts booming. Many people prefer to keep their businesses small and at home. Even if it just provides a steady second income, working from home offers peace of mind and independence that a second job simply might not.

While not everyone can afford to dedicate a room or separate dwelling for their home-based business, if you can, do-and make it one with a door. It will be easier for family, friends AND customers to take you seriously if you have fairly set hours and some privacy. But many small entrepreneurs and freelancers work on a laptop on the sofa. There are almost as many different set-ups out there as there are work-from-home folks. Don’t limit yourself because of space! Take a chance and start small.

Utilize wireless technology to network computers and printers, open source software to save money, Skype to make international calls cheaply or for free if that is part of doing business. Build online profileson Twitter and Facebook for exposure, develop your own blog, send out a newsletter, use Elance to find a logo designer. Don’t go deeply into debt for your business. It isn’t necessary!

Are you working from home in a small home-based business?We would love to hear your stories!

I like the concept of bucking the trend of college being the end all. As we discussed earlier, there are alternatives to college and getting deeply into debt. I like this man’s challenge.  It seems most of the critics in the article make the unfounded statement that rich people got that way because of their education. I challenge that and say perhaps they got rich in spite of their education. Most who have “made it” got there not because of a particular formal education but because of who they were, their character and attitude. If not, every educated person would be rich!

Wired recently featured a story about Y Combinator (the Y=Generation Y) which they called “boot camp for startups”. It isn’t a replacement for college but the odds are a significant number of the chosen few either didn’t go at all or dropped out. In fact, the “drop outs” are so numerous and respected that there is a whole website devoted to them: The College Dropouts Hall of Fame. And. Do you think this is a new concern? Check out this 1962 Time article about famous dropouts, including a couple of astronauts:

Entrepreneurs differ from wannabe entrepreneurs in one significant way: they take action. Inertia is the first cousin of fear. Doing nothing accomplishes just that. I think part of this is because people interested in changing course think they have to make huge, drastic leaps and that is terrifying to most of us. But looking around at your business, your career, your relationships or life in general and correcting course in one small way is doable-and can lead to change, sometimes even big change.

Failure is inevitable, but in many ways, so is success. Life is cyclical. The question is

are you noticing small successes when you make a change?

Ask yourself “How would I know that I was on the right course? What small moments might indicate that I am on the right path?” If it is career and you volunteered for one project, you might think you were on the right path if you got noticed or mentioned for your contribution. But would you notice the new contacts you made that might pay off five years in the future? If it is business and you want to increase your marketing reach and you tasked an employee with taking out one small online ad, but attracted no new customers, would you appreciate the fact that your employee gained new knowledge?

Successful people take risks and fail-and fail again and again. But they ACT. They do. All major companies can point to a significant failure. Major inventors and innovators have ridiculous stories of projects that were doomed, but that later morphed into something they never expected that was wildly profitable. Had they not failed the first time, they would have never made it to point b or c.

Look at your relationship with your most difficult supplier. What small change could you make (not him) that could improve that relationship? Do you dream of having more time off? What small risk could you take to move closer to that (investigate hiring a part-time virtual assistant, scale back the size of your home/yard, talk to your boss)? Doing nothing won’t get you there. Trying and failing and then trying again are far more likely to get you where you want to be.

I’d love to hear examples of your own trying and failing. What unexpected event occurred because of your own small risk?

Entrepreneurial-types often start small businesses because they think they will have to work less than if they were employed at a job. Then they build a business that feels just like a j-o-b. But the more daring question is “is work even necessary?” It’s a trick question, of course, but one that begs exploring in today’s uncertain economy. Tim Ferriss played with the idea in the The 4- Hour Work Week (you don’t really think he “works” 4 hours each week, do you?). But definining work today is much different than it used to be.

Juggling multiple freelance roles at once or working in serial careers (One Person/Multiple Careers) makes you more fiscally nimble than someone in a 30 year corporate career. You are essentially a personal brand, or hired gun, in the corporate world, especially as more large corporations have come to rely on contract workers versus permanent employees to fill gaps.  Or you can be a hired gun in a broader sense.

The two books above will help you develop a plan that includes having multiple streams of income, including  leveraging blog content and other writing, creating other passive sources of income, running a variety of micro-businesses, and working in a series of freelance positions. All of these combined with living frugally can equal a more enriching life and offer more protection in an economic downturn.

So. Is work necessary? Of course. But the definition has been forever turned on its ear. Work a few months, take a month off, let your content earn you money while you relax in the house you bought at auction while you lounge on your used sofa from craiglslist. YOU are far more in control of your future than you ever were.

By the way, here is a thought-provoking article that further fuels the debate about higher education.  Would you have taken $100k to quit college?

Your values tell the story of who you are and who you want to be. Whether you are growing a small business, a family, a garden, a career, or anything else of importance, the only way to truly achieve success is to align what you are doing with your personal values. Our personal value system is as unique as our fingerprint-a little bit of this, a little bit of that. We talked about time vs. money (two significant values) and steering your own ship, but let’s delve a bit more into determining what yours are.

One thing to note before we go further and that is sometimes your values don’t align perfectly or well with the people who matter to you: a spouse, a business partner, your parents. If they are a significant part of your life, you will have to learn to negotiate well and with an open heart and mind so that each of you can live as closely to your own vision as possible. This isn’t always easy. If you are surrounded by people whose values fit snuggly with yours, you are blessed.

One of the best ways to determine your values and your ideal life is to start noting those days that feel really, really good. Are you a businessman but you keep finding that your best days are spent at home cooking for the family? Are you a stay-at-home mom but you keep finding that your best days are when you are working on a fundraising project?

Determining your values is a LIFELONG process.

It involves investigation, honesty, discussions with people you trust (this is an opportunity tailor made for the coach/mentor relationship) and patience. Your values will change and will clarify as you age. When we have a look at Steve Pavlina’s List of Values (which is very long!), you will notice that there is a vast variety outside of the ones we typically think of (honesty, success, love, financial security): adventure, carefulness, energy, piety, resilience…Isn’t this opportunity to explore who you are and to build a life that fits you like a glove exciting?

If sacrifice, hard work, the potential for failure, self-motivation, and serving others aren’t tops in your list of values, you might want to question your desire to build a small business. And that is perfectly ok! You can live a completely different vision and be a success. As you question all of the traditions and rules that have been passed down to you, do a thorough investigation of your personal value system to build the life (and possibly business) that is right for you.

When you dream of owning your own small business, or any other “career” aspiration, are you steering your own ship or are you letting someone else’s conventions and definitions guide you? Is it your parents, your peers, your hometown, a mentor? Or is it society in general?

And when you get that nagging voice that says “I don’t want to be doing this”, what is it that keeps you from starting on the path to what you really want? My guess is two-fold. You’ve been playing by an unspoken set of rules (which we are trying to question) AND you are afraid. Coach Pamela Slim wrote an insightful piece based on this Saturday Night Live sketch about fear. At our core, we are all afraid if we fail we we will morph into Chris Farley living in a van down by the river.  

For many of us, these “rules” were developed fairly recently, after the industrial evolution and the end of World War II. There was opportunity galore and our country was feeling both invincible and filled with grief. We needed security and a clearly defined path and budding corporations made a de facto agreement with employees: you stay and be loyal hard workers and we will reward you with a secure job and retirement. Appearances and conformity were very important.

Chris Guillebeau, infamous travel hacker, community leader and author, points out that conformity is death now. It isn’t 1955, company’s don’t reward you for loyalty, and those individuals who think for themselves and take chances are the ones who live amazing lives. Let’s be honest. One of your values might be safety but pursue that path with caution and information. There is really NO SUCH THING.

Take small steps towards your personal dreams, build confidence, get knocked down a peg, get back up and take another small step. Google fails. Apple fails. But it feels much better to fail and get back up for something you personally want than for something someone else chose for you. Steer your own ship.