In 2010 Carmen M. Reinhart and Kenneth S. Rogoff wrote a book entitled “This Time is Different: Eight Centuries of Financial Folly”.    Writing on the heels of the Great Recession the book’s message was a simple one:  no matter how different the latest financial crisis always appears, there are remarkable similarities with past experiences from other countries and from history.   We have been here before.    Other nations and other leaders—-notwithstanding the hubris, or maybe because of the hubris—always think that this time is different.  The vast range of crisis considered and analyzed in This Time is Different demonstrates that excessive debt accumulation, whether it be by the government, banks, corporations, or consumers, often poses greater risks than it seems during the boom.  “Debt fueled booms all too often provide false affirmation of a governments policies, a financial institution’s ability to make outsized profits, or a country’s standard of living.  Most of these booms end badly.” [Read more →]

As 2011 draws to close, I think it instructive to look back over the previous year and determine if there is anything to be learned from the events of 2011. One event in particular I think is extremely educational. In 2011 Americans experienced the first ever downgrade of the United State’s credit rating. But instead of using the term “experienced” we really should use the phrase “participated in”. For the credit rating of our country is nothing more than a macro-economic evaluation of the many micro-economic challenges each American faces. The S&P downgrade to AA+ is an instruction to the buyers of our debt that the United States is less qualified than other countries who maintain their AAA status. Given that the Unites States is nothing more than a collection of its constituent parts, what happened this year was Americans were told that they were less qualified in 2011 than they had been in previous years. This must necessarily be so for if the credit worthiness of the United States was untethered to the individual credit worthiness of its citizens then there would have been little reason for the issuance of massive amounts of debt by the Unites States government because it would not have been needed. That was not and is not the case.

We in the franchise lead generation business have heard the cacophony of complaints about the deterioration of lead quality. (Although if the truth be known there are relatively speaking just as few complaints now as there were doing the good ‘ole days of the mid-2000’s.) As the aggregators and collators of American’s interest in entrepreneurship the lead quality of our leads is nothing more than a reflection of the individual credit worthiness and the consumer confidence levels found in the larger American economy. Regardless of one’s opinion about the effectiveness of franchise recruitment sites the vast majority of the recruitment sites do nothing more than collect, aggregate, and collate information from both the franchisor and the prospective franchisee. While we are active promoters of franchising, we are also the passive aggregators of individual interest. So if the Unites States government has been downgraded then so has— in theory– the average American looking to start his own business. [Read more →]

Sensors in the inner ear can feel the pull of gravity. In zero gravity environments, such as outer space, the lack of gravity makes it difficult for humans to determine “which way is up”. On the International Space Station all of the modules have an “up” orientation and writing on the walls point in that same direction. Doing this assists the astronauts in determining which way is up.

After reading that the President was urging Congress to not let the payroll tax cut expire in December I was forced to ask myself “which way is up?”. The payroll tax cut is a reduction in the payroll taxes that employees must pay—it dropped from 6.2% to 4.2% this year. The President stated that if the payroll tax is allowed to increase back to where it was prior to this year that “middle class families are going to hit with a tax increase at the worst possible time.” In thinking through the President’s statement I am stricken with a sense of hermeneutic vertigo.

The 6.2% tax that must be paid by the employee goes to Social Security. Social Security was sold—and still is sold to the American population when convenient—as a savings plan for retirement. If that is the case then how can saving less be seen as a tax reduction and being forced to save more as a tax increase? Linguistic vertigo! The whole debate over whether to increase or decrease the payroll tax puts to the test idea that Social Security contributions reside in some inviolable account. If we can nonchalantly reduce our retirement savings in 2011 by 33% it would appear that the taxes collected by the federal government under the auspices of the 6.2% payroll deduction probably go to fund the federal government. Hmmm, wonder whether that is what FDR had in mind.

Some estimate that reducing the payroll taxes boosted workers take home pay by 120 billion. If that is the case then why not reduce it another 2 percentage points to 2.2% and put another 240 billion in our pockets, Mr. President? I am quite sure that American’s could use another 240 billion right now. Of course, when the time came to increase it back to 6.2%—the rate it has been at since 1990—then we would probably have one of the biggest tax increases in recent history. Once again, our pitiful English language seems incapable of expressing fully how saving more for retirement is a bad thing. Conversely, reducing our federally mandated forced savings rate does not seem the responsible thing to do for our country’s long term fiscal health either. Political vertigo, maybe.

So I am left to look for some coherent writing on our walls. Like an astronaut recently blasted in to space I am struggling to figure which direction is up. If Social Security is simply a tax then I am all for giving Americans a tax break in perpetuity. But if this tax break is actually impacting my savings account then I would like to know what the impact will be to my account. We have been told for years that we did not save enough. Is our Commander-in-Chief now backing away from that sentiment—at least temporarily?

If I agree with the President that we should keep the employee tax reduction in place for another year am I making that determination based on what is good for our country long term or is this truly just a short term placebo for a much larger problem? To be fair, both Democrats and Republicans alike supported the idea of the payroll tax reduction and its proposed extension. But as the leader of our country—which includes our space program– I am hoping for some clear direction from our President on “which way is up” in this debate. The writing I see now on the walls is illogical and incoherent and thus of little help.

Company President Garth Snider recently was interviewed by football great Fran Tarkenton and business educator Professor Jim Solomon about franchises.

Jim Solomon is The Entrepreneur Professor (www.professorjimsolomon.com) and he has an online mentoring program teaching entrepreneurs exactly what to do, and when to do it.

Fran Tarkenton is the former NFL Quarterback with a love for entrepreneurship. Fran’s One More Customer (www.onemorecustomer.com) is an online community for entrepreneurs to gain knowledge about running a business and to connect with like-minded entrepreneurs.

When a once-successful business dies upon whose shoulders does the blame rest? The C.E.O.? The Board of Directors? The sales people? The administrative staff? We live in a society of “somebody is to blame” so surely to blame. It can’t be that the business just followed some chaotic but predictable path to a natural death. But why can’t a business simply die? Organically rise and organically fall. After all, businesses are really nothing more than the collective skills of the humans who operate the business. So if we are all destined to die someday why to should we not expect businesses to die? And is it really such a bad thing when business do die? For out of the ashes of one business will rise another. That is arguably the essence of entrepreneurship. I began contemplating this odd-fellow thought after hearing that R.E.M. had broken up.

R.E.M. was a pioneering rock and roll band from Athens, Georgia, and last month after more than 30 years together the three original members of the band called it quits. For many of those of us who grew up in the 1980’s we marked time with the release of each R.E.M. album—sometimes I nostalgically look back and re-gather the markers of my youth with a re-listen of the album “ Life’s Rich Pageant” or “Document” or “Out of Time”. So it is with a certain melancholy that I bid adieu to a group that I honestly believe may have been the best rock and roll band of the 1980’s (Rolling Stone magazine proclaimed them as such in 1987). But it is not a sadness that accompanies a sudden loss of a dear friend; no, it is more of an itchy melancholy that presents itself subtly behind the eyes when you learn of the death of person who has been sick for a long time. You know it was coming, and to a great certain extent you had long ago prepared yourself for it, but the finality of it makes you somberly retrospective.

I had prepared myself for the eventual break-up of the band when their original drummer, Bill Berry, left the band in 1997. For those of you unfamiliar with the band, the quartet slimmed down to a trio after Bill Berry left the band. Bill left the band for reasons that were sort of health related, but more for the reason it seems that he just wanted to move on. In all honesty, the preparation for the wake did not really begin until after I listened to their first post Bill Berry record. As soon as I heard that record I knew that something in the body music of R.E.M. had gone missing. Yes, the band went on to make many more records in the intervening time period between Bill’s departure and the band break-up. But none of the music was ever quite as good. Missing was not only the driving percussion that was always so central to R.E.M.’s music. Missing also was something intangibly subtle.

One would not have thought that the departure of a simple drummer could have that type of impact. There are those who still hold fast to the notion that it was not Bill’s departure that led to any demise in the music; but, rather the band followed the path of slow creative decay as the sinews of passion are broken down by the pounding of the soft hammer of success. But one cannot listen to the R.E.M. of the 1980’s—especially the mid-80’s—and not recognize that Bill was more than just a drummer. Peter Buck, R.E.M.’s guitarist, used the pounding snare of Bill’s drums to paint a tapestry of sound with his arpeggios e.g. “Disturbance at the Heron House”. To hear an example of the R.E.M.’s rhythm section at its unique and melodically best listen to “Belong”. In the years after Bill’s departure we also come to learn that he helped write the music for such seminal R.E.M. tunes as “Perfect Circle”, “Can’t Get There From Here” and “Everybody Hurts“. Listen as you may you do not hear Bill or anything approaching Bill post-1997. Which means for me at least, post-1997 you do not hear R.E.M.

R.E.M. organically rose and R.E.M. organically fell. R.E.M. was a business in every sense of the word. It was in the business of making ground-breaking music and it made music that meant business in both the most creative and capitalistic sense. So when a key member of the “management team” left did it not make perfect sense that business would suffer? Why was it not clear to everyone that the business of making R.E.M. music would one day close its doors?

Probably the same reason that most people cannot pin-point the exact moment when an established business passes through middle-age and tunnels slowly headlong into the red dirt of unprofitability. Something changes in the company. Somebody important leaves. That person is then followed by another person. But the wagons are circled and others are brought into shore up the defenses. It really never is the same, however. The creative light that led the business to success is flickering and in jeopardy of being blown out. The only people who really see it are those who do so while walking out the door. Many times those individuals have myriad reasons why they do not give voice to the truth. The truth is immutable in the long run.

So where does this leave us? It leaves us with the understanding that no matter how clichéd it may be at some point all good things must come to an end—probably more so if the things of which we speak are truly good. Creative destruction is normally reserved to describe certain facets of capitalism. It could easily be used to describe art as well. Kodak slowly dies while Sony rises. R.E.M. called it quits the same year Coldplay passed the 50 million album sold mark. The life cycle of both business and art roll slowly and inexorably down the streets of time.

Bill Berry said upon his departure that he was “ready for a life change”. So if you want to take a stab at predicting the future of a business simply look for the point in time where the “insiders” proclaim that they are “ready for a change” and so begin getting off the cycle. For it is clear by their actions that they believe that they have better things to do. Things like create again.

Creation is the quintessence of entrepreneurship. So we must not be afraid nor look down upon those who leave to find their new life. Those special people among us are the serial entrepreneurs—both in the worrld of art and world of business. These folks create and continue to create. They create jobs; they create wealth; they create memories; and they create happiness–both for themselves and for those who come within their influence. R.EM. is over. But other bands are waiting impatiently to be the markers of time for another yet unborn generation. The same way Sony will one day be eclipsed by some other company started by a yet unborn entrepreneur.

The article below is an excerpt from AIS Media’s Thomas Harpointner and FON’s W.C. Garth Snider’s white paper, “8 Critical Steps to Leveraging the Power of Social Media to Drive Franchise Sales”. To download the full white paper in PDF format, please click here.

For a franchise development manager, there’s nothing quite as painful than hearing that a previously excited potential buyer has changed his/her mind and decided not to move forward because of some negative comment they found about your franchise offering online.

Regardless of whether these negative comments are false, one-sided, unqualified, originate from a competitor, or are posted by a disgruntled franchisee with an axe to grind, the financial impact can be devastating and be a real morale killer.

As unfair as it may be, just ONE negative comment can cause a prospect to have second thoughts, silently undermining your sales efforts. What’s more, social media can cause negative comments to quickly spread like wildfire and out of control across the internet.

The longer negative comments remain unchecked, the more difficult they become to suppress and the greater the damage they can cause. In some industries, companies have reported losing millions of dollars due to a single negative comment found next to their online listing.

• Use a tool or a service that continually monitors the sentiment related to your domain, your brand and franchise offering.
• Take immediate action to suppress negative comments before they spread out of control across the internet.
• Identify and engage with key influencers.
• Uncover relevant communities, target discussions, and conversations.
• Foster positive word-of-mouth advertising.
• Suppress negative comments and reviews through active engagement and content creation.

The article below is an excerpt from AIS Media’s Thomas Harpointner and FON’s W.C. Garth Snider’s white paper, “8 Critical Steps to Leveraging the Power of Social Media to Drive Franchise Sales”. To download the full white paper in PDF format, please click here.

LinkedIn is the world’s largest professional network with over 100 million members and growing. While Facebook is viewed as a more casual and fun environment aimed at consumers, LinkedIn is all business – offering you the opportunity to connect with executives, join discussions about franchising, and reach prospects who might otherwise never have considered your offering.

Your LinkedIn presence can help boost prospective buyers’ confidence and streamline the due diligence process as they explore your LinkedIn connections, read endorsements, and discover what you’re saying and what’s being said about you in LinkedIn Groups.

• Set up a personal LinkedIn profile, complete with a professional profile picture and full biography.
• Carefully choose your connections; assume prospective franchisees will browse your connections and judge you by your associations.
• LinkedIn is a professional network so keep all of your communications professional.
• Join and participate in LinkedIn Groups that relate to your industry to demonstrate knowledge, reputation and thought leadership.
• Seek endorsements from professionals with whom you’ve done business.
• List publications that have featured you or your franchise offering.
• Integrate your blog and link to your business Twitter account.

Make sure all of your contact information is up to date and consistentWhile both Facebook and LinkedIn enable you to create groups, LinkedIn rules supreme in business to business use. Creating a LinkedIn Groups specifically for your franchisees promotes thought leadership, creates a thriving community, can help drive website traffic, generate leads and foster advocacy among your franchisees.

• Set up a LinkedIn group.
• Post questions and lead conversations.
• Send weekly messages to group members.
• Manage members and moderate content.
• Create subgroups for specific geographic markets or franchisee levels.

The article below is an excerpt from AIS Media’s Thomas Harpointner and FON’s W.C. Garth Snider’s white paper, “8 Critical Steps to Leveraging the Power of Social Media to Drive Franchise Sales”. To download the full white paper in PDF format, please click here.

Social media can transform satisfied franchisees into brand advocates, amplify their voice and automate word-of-mouth marketing. Encouraging feedback from franchisees within a social media medium can simplify comment sharing and delivers positive reviews at the precise moment in the discovery process when it matters most.

• Encourage and incentivize positive feedback from existing franchisees via social channels.
• Develop and distribute case studies via social channels to maximize their visibility and reach.
• Encourage franchisees to share your content on their social media channel of choice.
• Single out and highlight your superstars and transform them into brand ambassadors.

The article below is an excerpt from AIS Media’s Thomas Harpointner and FON’s W.C. Garth Snider’s white paper, “8 Critical Steps to Leveraging the Power of Social Media to Drive Franchise Sales”. To download the full white paper in PDF format, please click here.

Trust is the back bone of any business relationship. Trust is particularly important in the decision stage for the prospective franchisee. A well-thought out and well executed social media strategy can foster and further trust in both the franchise’s brand and its management. This will, in turn, greatly increase the likelihood of a successful franchise unit sale. Chances are, prospective franchisees are already engaging in conversations about your offering. Joining and proactively leading those conversations helps build prospects’ trust and confidence, thus gently influencing sales. It’s estimated that only about 20% of prospects actively engage in online discussions. The majority are influenced by the comments and reviews of others.

• Identify and enter into social conversations.
• Address questions and concerns.
• Share relevant content.
• Engage with key influencers.

The article below is an excerpt from AIS Media’s Thomas Harpointner and FON’s W.C. Garth Snider’s white paper, “8 Critical Steps to Leveraging the Power of Social Media to Drive Franchise Sales”. To download the full white paper in PDF format, please click here.

Since the content aimed at prospective franchisees is unique from that of your brand’s customers, create unique social media channels with content specifically aimed at this audience.

• Create branded social media properties specific to franchise development.
• Facebook, Twitter, LinkedIn, YouTube, blog.
• Integrate social media icons into your franchise development specific website and cross-link to social properties.
• Post pictures and videos specific to your franchise offering.
• Develop creative Facebook promotions that entice visitors with special content, which becomes available to them after they “Like” or become a “Fan” your page. Be certain to have these promotions integrated with any franchise portal advertising you may be doing.
• Promote special events such as webinars, discovery days, trade shows and conferences. While at the shows and conferences, be prepared to interact with the attendees using social media. Develop your trade show and conference “presence” with social media in mind.
• Integrate social sharing functionality to display user generated content and encourage visitors to share brand franchising information with friends and colleagues.
• Aggregate socially created content oriented from your brand’s franchise community.
• Cross-promote social media channels and content; integrate YouTube videos, your blog, and your tweets into your Facebook page.