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Franchising Your Business

On January 4, 2019

Once a business has a certain process that’s working and it is producing a consistent profit, an owner may want to think about replicating the process by franchising the business and opening it up to new owners. Here are five factors that a company will want to look at when deciding if they should create a franchise:

Is The Concept Viable?

A good franchise concept will have two qualities. It will offer something that is familiar, but it will come with a unique twist. An excellent example of this is a pizza company that only offers organic ingredients and delivers their product via hybrid-electric vehicles. The concept must appeal to prospective franchisees and consumers. Also, the business should be able to be replicated so that funding more of them would create an increase in profits and economies of scale.

Hire A Lawyer

When a business owner is going through the franchising process, it’s important to hire an attorney who can give expert advice on the transition. They’ll be able to help with the forms that need to be completed such as a Franchise Disclosure Document. An attorney will also be able to assist with pricing, intellectual property protection and the creation of a franchise agreement.

Will Cloning Work?

To really be sure that a business should be franchised, it’s usually best to create one or more clones and see if they are successful in other areas. If the cloned units are a success, it probably makes sense to move ahead with plans to franchise the business.

Be Selective

There are many individuals who may have the capital to pay the price that allows them to get involved with a franchise. However, it’s important for the owner of the franchise to be selective when choosing franchisees. This ensures that the right people are selected so that both the franchise owner and franchisees are successful. The owner of a franchise should always consider new franchisees as ambassadors of their brand. They must be a good fit. An interview process should be used to help determine the best candidates.

Location Location Location

One of the most important factors for the success of a franchise is where it is located. It’s best if the first couple of locations are kept close to the original business. However, they shouldn’t be so close that they’ll hurt the sales of the first location. By having the first franchise operations close, it will be easier to manage logistics.

Attracting The Right Set Of Investors

By Tom Leydiker

On November 26, 2018

In Blog, Finance

When a person is able to find a good investor for their startup, it will help them get off to a good start. Knowing how to pitch and attract investors will ensure that they find the right match. Here are five tips that will help an individual give a strong pitch to an investor:

Short And SweetInn

Often, the best ideas are the simple ones. When a person is creating their pitch, it should be short and sweet. Of course, their products or services need to be innovative as well.

It’s best to stay away from technical details when a first pitch is given. Typically, an investor will have experience in the space and quickly understand the significance of the proposition being made. It’s also best to keep minor details about the company private before an investor decides to sign on.

Telling A Story

Storytelling is one of the best ways to pitch to an investor. People love stories, and they’ve been successfully used for thousands of years to pique people’s interest and get them emotionally involved.

The key is to make a story enjoyable and not too convoluted. A person can use the story to help make them more likable, which can help build trust.

Utilize Philanthropy

In many cases, investors have been involved in some type of entrepreneurial role in their business life, and typically, entrepreneurs are more likely to donate to charities.

It feels great when a person is charitable, and it makes them look good. By aligning a business plan with some type of charity during the initial stages of a business, it sets up the possibility of networking with investors who view giving to charity as a positive thing to do.

Use Confidence And Practice

When a person acts confident when they’re giving a pitch, it’s going to help an investor see them as someone who is sure of themselves. This helps create trust and confidence in an investor.

It will probably take time for a beginner to find the correct balance of aggressiveness. They definitely don’t want to come off as someone who is desperate.

Sealing The Final Deal
Once a person has given their pitch and become established as a trustworthy and accessible individual, it may help if they can prove that it works. If an investor sees that their service or product is actually viable, it should help the investor make a decision.

Saving For The Future

By Tom Leydiker

On September 17, 2018

In Blog, Debt, Finance

It is important to save money at any point in your life. Life can be unpredictable, and everyone should prepare for the unexpected to some degree. Establishing a kind of financial “cushion” is a great way to help yourself from financial downfall in the unpredictable future. Saving money for future plans is essential for retirement, vacation, school, and anything else you can think of. This article will give you a few you can prepare and start saving for your future.

Establish Goals

The very first step is to establish your goals. Take a look at your current financial situation and set a realistic goal for yourself that you will be able to reach. Break down the goal into smaller digestible pieces that you can work on every day. Setting an overarching goal for yourself can be intimidating, but once it is broken down into smaller daily tasks that you can complete, the overall goal does not seem so daunting.

Spontaneity

Individuals who set financial goals for themselves find it difficult or unbearable to bind themselves to strict budgets. One aspect of your budget should be used just for spontaneous events that may come up during the week. Considering that last minute plans happen, it is a great idea to have a set amount of money that you can spend either each day or each week to help you stay on your budget. You will be less likely to falter on your budget if you have already budgeting frivolous spending!

Save First

The very first thing you should do when you get paid is to put money away towards your goal. You can decide whether you should manually put away the fixed amount or have it automatically taken out of your paycheck, so you never see the money in the first place. Whichever method you decide to choose, paying yourself first is the most important key to planning for your financial future.

Consider putting one-time payments such as tax returns, bonuses, or raises into your savings account. If you can function well with your current cash flow, then you have the opportunity to save even more with the added cash flow that comes from raises, bonuses, and tax returns.

If you are comfortable with the idea of investing your money, it is a great way to potentially earn more money for your financial goal and future. As with any investing, there is a varying amount of risk involved. Look into ways that you can intelligently invest your money to ensure the best returns!

What You Need To Know About The Stock Market In Order To Make Money

By Tom Leydiker

On November 16, 2017

In Blog, Finance

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Investing in the stock market might seem scary, especially watching movies like Wolf of Wall Street.

However, the world of investing isn’t actually that terrifying and can, in fact, be an effective way to set yourself up for a comfortable financial future. Yet younger Americans are not investing as much as older generations. Waiting to invest is a pretty poor money move.

While investing can be a risky game, it isn’t nearly as complicated as one would think. Here is what you should know if you want to make money off of stocks:

Think about your timeline.

The longer you wait to save and invest, the more you’re going to lose, and the less you’re going to make. Making money in the stock market is all about maximizing the benefit of compound interest. The trick is to keep saving and investing. The more time your money has to grow, the more you’ll have at the end of the day.

Think about how much you’re investing.

The amount you earn is partially based on how much you end up investing. You don’t have to invest a lot to earn a lot. It’s simple enough to start by contributing as little as 5 percent into a 401(k) or IRA. If you’re concerned that you’ll lose your money if you do end up investing, then fret not. NerdWallet recently released an analysis of 40 years of historical returns, and discovered something pretty interesting: stock market investors had over a 99 percent chance of maintaining at least of their initial investment, the same as a traditional savings account.

Think about the return rate.

Investors had a 95 percent chance of earning nearly 3x your initial investment, compared to a less than 3 percent chance of tripling your investment as a traditional saver. While these are some pretty nice-looking odds, the ultimate rate of your money growing is out of your control. As long as your investment outpaces inflation, you’ll do well. That’s not going to happen if your money is in a bank account with low interest rates.

Think about diversity.

Putting all of your eggs in one basket is seldom a good idea, particularly in the world of the stock market. While buying a lot of stock from Blockbuster made good business sense 20 years ago, you’d be kicking yourself now. To make sure that something like this doesn’t happen to you, invest across different types of companies, industries, and companies. Start by investing in a low-cost index fund that diversifies for you, or robo-advisors that use algorithms to build and manage your portfolio.

Telltale Signs When It’s Okay To Borrow Money

By Tom Leydiker

On October 18, 2017

In Blog, Debt, Finance

tom leydiker telltale signs blog header

If you have ever consulted with a financial advisor, you know that borrowing money is one of the last things you should do, especially if you are trying to build up a strong credit history or investment portfolio.

However, there are certain exceptions to this rule. If you encounter a drastic or detrimental life event, are responsible for aiding your extended family in times of trouble, or suddenly find yourself inundated with bills, you should not feel as though you have no options or means of receiving help.

With that in mind, let us take a look at some telltale signs of when it is okay to borrow money:

When you cannot afford moving costs.

If you recently purchased a home, you may be faced with a plethora of expenses you had not even taken into consideration (i.e., storage, transportation, sudden repairs or renovations, etc.). Borrowing money in this scenario can give you great peace of mind while you are getting moved and settled into your new space.

When you are hit with large medical bills.

Unfortunately, no matter how young or healthy you are, facing medical expenses is an inevitability. Thankfully, there are ways to ease the burden of big medical expenses.

Now, credit bureaus allow patients 180 days to address their medical expenses prior to putting them on their credit reports. This gives individuals enough time to sort through their options and make the most educated decision possible – all without feeling rushed or uncertain of their financial standing.

When your car requires major repairs.

A lack of reliable transportation puts a major wrench in your plan to consistently earn and save money. However, if you are in a financial bind and require assistance to get your car back in working order, borrowing money is likely your best option. This will ensure you are still able to work and will even allow you to pay off your expenses at your own pace – a definite win-win scenario.

Regardless of your reason for borrowing money, it is imperative that you remember the importance of paying off your debt in a timely manner. Otherwise, you may end up paying more due to accrued interest than you would have if you budgeted your finances to make the largest payments you could manage – within the realm of feasibility, of course.

Personal Finance Checklist: How Much You Should Save at Every Stage of Life

By Tom Leydiker

On September 26, 2017

In Blog, Finance, personal

Tom-Leydiker-Personal-Finance

The best way to build your personal wealth is to save your money as early and as often as you can. Having an account with compound interest will allow your money to begin making you more money. The bestselling author David Bach lays out a saving plan for each stage of your life in his book “The Automatic Millionaire.” The exact amount that is saved will differ from person to person depending on lifestyles and personal goals, however, Bach’s plan is a good rule of thumb to refer to.

The first decade you should start seriously saving is in your twenties. In your twenties you should be saving 10% of your gross income to your retirement savings and your emergency savings should be at least three months of expenses. If your company offers a 401 K plan and matches your contributions up to a certain percent, often somewhere between 3-5%, saving that 10% of your gross income just became much easier.

In your thirties, it can be expected that you’re not only providing for yourself anymore. You may have gotten married, may have had children, or may have bought a house. This is where you thank yourself for beginning to save at an earlier age. At this stage of life, 12.5% of your gross income should be saved for retirement and your emergency savings should cover your expenses for at least six months.

Your forties will be your peak earning years. This stage of life is going to be the most profitable time to take advantage of your increasing salary and save as much as you can. You should be saving 15-20% of your gross income to your retirement fund, and your emergency savings should be able to cover you for at least year or two of expenses. If you set yourself up with an account early on, you’ll truly start to notice your compound interest making money for you.

Once you’re in your fifties, you should be getting close to your retirement goal. Don’t stop saving once you reach this goal. You should be saving up until the day of your retirement. By this time, your emergency savings should be able to cover at least three years worth of expenses. It’s important to have this much in emergency savings because “the older you get the more you earn and spend. And if you lose your job it can take longer to find a job that replaces that income” explains Bach.

During your sixties and into retirement, you should still manage your money carefully. If you’ve followed the plan outlined above, you should be set to enjoy your money. Your emergency savings account should contain roughly five years of expenses.

How Collections Can Affect Your Credit

By Tom Leydiker

On August 25, 2017

In Blog, Debt, Finance

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Debt collectors, according to both the Federal Trade Commission and Consumer Financial Protection Bureau, are one of the most complained-about businesses. When you hear about “debt collectors,” the first image to come to mind is an aggressive loan shark. Even a “nice” debt collector can be a pain – yet they aren’t going anywhere anytime soon.

A debt collection is a type of financial account that’s been sent to a third-party debt collector. Hiring a debt collector is usually more cost-effective for a company than to keep spending their resources pursuing payment. Most credit card accounts get sent to a collection agency after six months of non-payment, while other businesses send them out even sooner – it varies business by business.

Debt collectors will call you and your friends, send letters, and even show up at your home to collect money – all of which is perfectly legal. If a debt collector doesn’t have your phone number or correct address, however, you may never receive notice of the debt until you see it listed on your credit report.

How does this all affect your credit?

Whenever an account is sent to a collection agency, the original creditor or the collector updates the account on your credit report. A debt collection is one of the worst types of credit report accounts. It reveals that you have become seriously delinquent on an account. This will cause your credit score to plummet, causing you to be denied for credit cards and loans in the future, particularly if it’s recent or remains unpaid.

These accounts can stay on your credit report for as long as seven years, meaning that their negative effects can haunt you for a long time. One of the best ways to lessen the harm of a collection account is to pay off the debt so that it will affect your collection less over time. Another way is to continue to pay all of your additional bills on time.

A Stock-Trading App That Wants To Take On Wall Street

By Tom Leydiker

On July 6, 2017

In Blog, Finance

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Millennials tend to prefer their services condensed into an easily digestible experience. They crave this experience, just as they romanticize sleek, streamlined innovation, and they swarm to whichever service best captures such sentiments in a fast-gratifying, affordable package. Today’s industry shakers capitalize on the millennial demographic by trimming unnecessary costs and accessories; companies such as Netflix and Uber allow their service to speak its own merit by framing it as no more or less than what it is, no-strings.

Robinhood, an experimental finance app, seeks to reproduce the success of its predecessors by offering features which follow a similar pattern of simple affordability. The app was created in 2013, a passion project of Vladimir Tenev and Baiju Bhatt, who sought to spread their enthusiasm for technology and the stock market by building a service that eases millennials into the trading game.

What separates Robinhood from the likes of ETrade, Charles Schwab, and other online brokerage services is its $0 commission policy. Once users pass an initial application process, they can buy and sell stocks free of any additional fees, which “allows all those people who were underserved by the previous generation of products to get started much sooner and with smaller amounts of money,” according to Tenev. This idea of uninhibited trading appeals to younger investors who might be dissuaded from rival services due to heavy fees.

Robinhood’s stripped down, accessible interface poses another attractive perk to novice investors. With the touch of a screen, users buy or sell stocks at market value; through Robinhood’s ultra-navigable interface, they can also make stop-loss orders, limit orders, and stop limit orders. By omitting more complex trading tools and sanding down the basics, Robinhood attempts to curb the stock market’s intimidation factor and paint trading as a hobby that is not only lucrative, but entertaining.

Boasting a net worth of $1.3 billion, $176 million raised in funding, and over two million users, Robinhood appears to have cornered the previously untapped millennial demographic. Despite its breakaway success, the app still faces challenge on the bottom line. Providing a valuable service at no user cost is done at the expense of profits, which could compromise Robinhood’s ability to expand its functionality in the future.

“With ultra cheap trades comes insanely thin margins, if any at all,” comments Blain Reinkensmeyer, Head of Broker Research at StockBrokers.com, “which means compromises will have to be made somewhere, whether it is customer service, tools, or research. There is a reason why traditional brokerages all charge high rates but combined house tens of millions of overall ‘happy’ clients.”

Robinhood’s answer to its profitability pitfalls is a $10-per-month paid subscription service called Robinhood Gold. It offers additional features, such as the ability to trade before and after hours. Equipped with this business model, Tenev believes his app now walks “a clear path to profitability.”

Financial Security: Preparing For The Unexpected

By Tom Leydiker

On May 19, 2017

In Blog, Finance

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As you plan for your financial future, you are anticipating all of the monumental milestones that will occur as you continue along the trajectory of your life. These milestones are intimidating because they often require you to make very serious decisions that are financially demanding. Some of these milestones include choosing the college you want to attend, committing to signing a mortgage for a new home, starting your own family, diversifying your investment portfolio, saving up for retirement, etc.

But the one area that not many think to plan for, mainly because it is not a very pleasant topic to dwell on, is what to do in the event that a spouse passes away unexpectedly. There are resources available to help plan for this (e.g. life insurance), but it’s also good practice to be prepared for an emergency by having a plan-of-action set in place to ensure everything is organized and accounted for so that you aren’t scouring through a disarray of documents.

Here are a few of the most imperative areas that you should prepare for in case of an emergency:

Estate Plan And End-Of-Life Care

One important conversation that need to happen is what will happen to that person’s physical and monetary elements after they pass away. These documents should be readily available for review once this happens so that everything can be carried out appropriately. Some other information that falls into this category are documents such as: your will, your end-of-life care, your power of attorney, etc. You will also want to make sure that your estate plan is as up-to-date as possible.

Securing Essential Documents

These are documents that have compiled up throughout your life, starting with your birth certificate and including any important paperwork you’ve received since. You will also want to organize all of your most important financial documents, from bank account information to any pertinent investment material.

Obtaining All Passwords

Now that there has been a push for more paperless transactions, there are going to be quite a few accounts that can only be accessed online. Nothing would be more time-consuming and aggravating than trying to relocate passwords or having to go through the process of updating them once you can’t find the original passwords. Put them all in one, easily accessible document.

Seeking Aid For Future Financial Planning

If you were not the one in charge of handling your finances, it may be beneficial to look into hiring a financial advisor to help you bear this new responsibility you are now being forced to take on.

Life is unpredictable. And while no one wants to dote on the possibility of an expected death, it is worth developing a plan-of-action in case a dire situation would occur. If you are prepared for the unexpected, you won’t be left trying to grieve while also trying to get your finances in order.

4 Steps Towards A Debt-Free Life

By Tom Leydiker

On May 4, 2017

In Debt

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For some, being in debt is something that resulted from careless spending. Frivolously making purchases for unnecessary commodities with credit cards with the mindset that you will pay it off later by making the minimum monthly payments is the quickest way that Americans get themselves into debt.

For others, debt comes more unexpectedly, perhaps through an unpredicted emergency you were not financially prepared for. Maybe your car broke down and you either had to pay an expensive garage bill or the garage deemed your car unfixable so you are now forced to purchase a new vehicle.

Whatever the cause of your debt is, it’s important that you start developing better money habits as soon possible to get out of debt and prevent additional debt – a very easy cycle to fall into and a difficult one to get out of. It is being estimated that, on average, 50 percent of households currently have debt ranging around $14,000.

Here are some ways you can prevent future debt while also implementing strategies that will help you to work towards managing your current debt:

Step #1: Create a list of all of your debts, including their interest rates.

Don’t skip over this step! Before you can start tackling your debt, it’s important to be aware of exactly how much you have. Write it down in a notebook or start making a list in a spreadsheet so that you have everything contained in one area for future reference. The three most important things you will want to take down: the total amounts you owe, the annual percentage rates (or interest rates), and the monthly minimum payments.

Step #2: Set goals as you work towards paying off your debt.

It will be beneficial for both your stress and your action plan if you can break apart your debt into more manageable portions. Find out how much money you can dedicate to paying off your debt every month and, then, you can do a rough estimate of how many months or years it will take you to pay off the total amount. Set milestones for yourself as you start contributing more money to your debt, whether it be every $1,000 you pay off or every $5,000 you pay off.

Step #3: Focus on the payments with the highest annual percentage rates first.

This is where that list you created at the beginning of the process will come in handy. As you begin paying off your debt, focus on the balances that have the highest interest rates first. Work to eliminate those first by dedicating as much money to them as you can while still being able to pay the monthly minimum payments on your other balances.

Step #4: Find additional ways to bring in income.

If you bring in additional income, that is money that you can be dedicating right to your debt. The thought of working a second job may not seem appealing, but it will only be temporary until you are debt-free again, and this will make paying off your debt go by more quickly.