Question: My partners and I just left our firm to form our own architecture/development company in Downey. Our goal is to build small apartment complexes. We're all smart, entrepreneurial guys, but we never managed our own business. Our main concern is that the targeted area we have identified will not pay off in the long term. What should we do?
Answer: Conduct a feasibility study, a valuable piece of market research that will help you determine the likelihood of the project's success.
I'm going to anticipate your next question: Where do you go to get a feasibility study done? Market research firms. They will analyze a similar market to the one you've identified in Downey, one that has been built out and is flourishing. The analysis will take into consideration economic factors as well as the demographics of the people living in the profitable complex.
After the firm completes its research, it will compare factors in your targeted community with the one that already exists. The results are called "discovery points." The firm will then make recommendations on whether or not the proposed development is a viable one.
Now I don't want you to think that your involvement should be passive. Even if you pick a highly recommended and skilled market research firm, you and your partners should still question its results and do some of your own research.
Plus, trust your own instincts. Sometimes that's the best indicator of what's right for you and your business.
For more information on where to find a market research firm, contact Marketing Research Association (MRA) at 2189 Silas Deane Highway, Suite 5, Rocky Hill, CT 06067, (203) 257-4008 (phone) and (203) 257-3990 (fax).
Q: My husband and I would love to run our own fast-food restaurant. We have marketing and management experience and want to be a franchisee. What characteristics should we look for in a company?
A: There are four key points to consider before choosing a franchiser:
? Brand name. If the franchise already has a very respected and well-known name, it will give you a jump on building a successful store while radically reducing your chance of failure.
? Quick start-up. Most franchises will include everything you need to get started. But the ones that are truly "turnkey" operations are probably the most desirable.
? Advertising dollars. Ask about whether or not the franchiser offers a nationwide advertising and promotions program. These will be a direct benefit to your store and provide the clout you will not, as an independent, be able to afford on your own.
? Training programs. A good franchiser will move you up the learning curve quickly and effectively by providing a series of training programs and aids for you as an operator and for your employees. The best companies also are constantly upgrading the goods and services the franchises have to offer. The franchiser's research and development will be an invaluable service to you in the future.
Q: I've been running a small manufacturing company for the past two years. It's probably time I wrote my business plan. This is not something I've ever done before. Can you give me some direction on where to begin?
A: Start with an outline. I'll give you the basic categories and you fill in the blanks.
List the company's goals and objectives. Then list the products and services you offer, management's background and roles, your marketing plan and financial data (and in your case, history).
Since you're already in business, you should add a brief overview of what you've accomplished in the last two years. This will also give you a chance to do some soul searching as to whether or not you have reached the level you had originally targeted for yourself.
I would also recommend that you take an extension class at UCLA or maybe one through the Learning Annex, especially if you want to use this business plan to raise capital for your business.
Q: It's only January and already my employees are complaining about the workload and their pay. We run a very tight shop, our margins are pretty thin, but I need good people and don't know how to keep them happy. Please help!
A: The first question to ask yourself is, even though it's the beginning of a new year, how did you leave your employees at the close of the old one? If you didn't provide them with some kind of reward bonus, pay raise or even a gift or holiday party it would be quite natural for them to be a bit grumpy.
If you did take care of them in December, I would suggest that you sit down with them, one on one, and find out what's bothering them. Do it individually first, then assess the situation (sometimes there's a trouble-maker in the bunch and he could be inciting the others). Then you should put together either individual solutions or a universal program that would alleviate the situation.
Now let's get to the extra money problem. If you discover that your employees want (or need) to earn more money, the first thing you should do is a little homework. What are other companies paying their employees? How do your benefits stack up?
I fully appreciate that you may not be able to afford to match your competitors' pay rates. As always, you'll have to get creative. Offer stock options, more leisure time, etc. I've even read somewhere that it's getting fashionable to allow employees to bring their pets into the office. Whatever keeps them happy and productive and doesn't disrupt your business seems like a viable alternative.
Lorraine Spurge is a personal finance advisor, author of "Money Clips: 365 Tips That Will Pay One Day at a Time," and business news commentator. She can be reached at (818) 705-3740 or by e-mail at email@example.com.
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