How to Buy a Franchise: Ownership in 11 Steps - UpFlip

Starting any business venture requires time and dedication, but the franchise process is different from starting a business or buying an existing one. In exchange for the brand recognition you get with a franchise model, you give up much of the decision-making power. You’ll also pay fees to the franchise headquarters.

You will get efficient and thoughtful service from THE MIDI..

We’ll show you how to buy a franchise with input from franchisors, franchisees, franchise brokers, and franchise consultants.

Tom DuFore, our preferred franchise development consultant, is the founder of Big Sky Franchise Team. He’s in the unique position of having experience as a franchisor, franchisee, and franchise consultant.

Together, we’ll help you understand what a franchise is and how they operate. We’ll cover the benefits and limitations of buying a franchise as well as how to buy a franchise when you’re ready. Then we’ll answer some frequently asked questions about how to buy a franchise.

You can either keep reading or click on any of the links below to jump to the section that interests you:

What is a franchise opportunity?

A franchise is a business model where the franchisor allows other business owners to run a franchise location by following their business processes. This includes using their suppliers and company name in exchange for paying franchise fees.

Tom explained that franchising has the following qualities:

• The business name is shared with multiple business owners.
• The franchise buyer uses someone else’s systems.
• The buyer pays a fee for the rights to use the business name and systems.

Check out our interview with Tom to learn more about the franchise business model:

If you already own a business and you’re interested in selling your franchise to others, contact Tom for an expert consultation.

How does the franchise business model work?

The franchise business model functions differently than many other business models. The franchisor and franchisees work together to create mutual success. Let’s look at some of the main differences between franchising and other business models.

Initial franchise fee

You’ll pay an initial franchise fee for the right to use the franchisor’s brand, systems, and intellectual property. The fee also reassures them that you have enough skin in the game to avoid damaging their brand’s reputation. Franchise fees can range from as little as $1,000 to over $1 million.

Royalties

You’ll pay ongoing royalties based on your sales for the ongoing use of intellectual property and the continued support you receive. These fees may be weekly, monthly, quarterly, or annual payments. Most are either a percentage of sales or a flat rate.

Operational guidelines

Franchisors provide detailed operational guidelines to ensure consistency across all locations. This includes everything from the store layout to customer service protocols. You’re required to follow them and can lose your franchise if you fail to comply.

Support systems

Franchisors offer voluntary and mandatory support systems for training, marketing, and human resources. They also host annual franchise meetings. Failure to participate in the mandatory events may result in additional fees or termination of your rights to operate as a franchisee.

Compliance

You must follow all of the franchisor’s standards and policies to keep the brand operating consistently across all locations. The franchisor has policies for handling violations of the agreement.

Make sure you understand the policies and strictly adhere to them. Rebels (like me) may not enjoy the strict adherence to rules that a franchise requires.

Pros and Cons of Buying a Franchise

As Mike told us, franchise ownership isn’t for everyone. Some people prefer to figure everything out, and some just want to increase their earnings without investing a lot of time learning.

Let’s look at the pros and cons of owning a franchise.

Pros

There are several clear advantages to owning a franchise:

• All systems in place
• Less to figure out
• Built-in mentors available
• More defined profit expectations
• Might have built-in customers

Steven Montgomery, the founder of ResiBrands, explained why he likes operating a franchisor and why franchises might like the model too. He told us:

The E-Myth Revisited convinced me that franchising is the best business model because it changed the product from selling painting services to selling the business model you have created.

Check out our interview with him below:

Learn more about That 1 Painter.

Cons

Owning a franchise also has its downsides:

• Higher startup costs
• Less room for creativity
• Business strategies might not work in your area
• Annual or monthly franchise fees
• Service area is often dictated by the franchisor

Keep reading to learn more about the franchise buying process.

How to Buy a Franchise

Buying a franchise works best when you follow the process below:

1. Research franchise opportunities.
2. Work with a franchise broker.
3. Find the right franchising system.
4. Review the franchise disclosure document (FDD).
5. Establish how you’ll pay for the franchise and startup costs.
6. Attend discovery day.
7. Sign the franchise agreement
8. Scout a location.
9. Prepare to open your franchise.
10. Operate the franchise

Step #1. Research Franchise Opportunities

There are all types of franchises. You’ll want to research which franchises are available.

Check out our blog about the most profitable franchises to learn more about highly successful franchises. We’ve also written extensively about franchising in various niches and industries.

Tom told us:

Over half of franchise offerings are local services. Home services are particularly doing well since COVID.

Opening a franchise is a huge commitment, and the franchisor thoroughly reviews each potential franchisee to make sure they meet the requirements to be successful. Conducting a franchise business review is crucial to understanding the financial aspects and average costs associated with opening a franchise.

You’ll want to know about typical franchise requirements and how to find good franchises. We’ll look at both to help you find the perfect franchise to start as a small business.

Typical Franchise Qualification Requirements

Prospective franchisees should be aware of the following requirements that most franchisors have:

• Credit score: Most franchisors require a minimum credit score. If you have a 680 or better, you shouldn’t have an issue. Use Credit Karma to check your credit score.
• Net worth: Most franchise owners require a minimum net worth of at least $100K, but estimates suggest that a new McDonald’s costs $2.3 million. It’s gotten so high that they only let new franchisees buy an existing franchise.
• Liquid assets: You need enough liquid assets to pay the franchise fee without financing unless you’re approved for franchise financing.
• Other income: If you want your franchise, you’ll need outside income. It can take six months to a year to start generating revenue. During that time, you’ll need to cover the costs of opening a franchise and covering your living expenses.
• Industry experience: You may need industry experience. If you don’t have it, you might want to go work in the industry before buying a franchise.
• Management experience: Franchise owners may want prospective franchisees to have management experience. It improves the likelihood of becoming a successful franchisee.

Make sure to have documentation of your financial situation and experience ready before researching franchise opportunities. Each particular franchise has different rules. Don’t spend a lot of time applying to become a franchisee if you don’t know their requirements.

Keep reading to learn how to use the International Franchise Association (IFA) to evaluate franchise opportunities.

Check the International Franchise Association

The IFA has a database that helps people find the right franchise out of more than 1,400 opportunities across the globe. The franchise search can be sorted by:

• Industry: There are 15 choices including cleaning, business services, senior care, and food-related franchises.
• Location: Search globally or by any continent other than Antarctica.
• Investment amount: The search allows you to filter the investment amount by $0 to $1 million. Make sure to reduce the highest amount unless you have $1 million to invest.
• Opportunities for the military: Some franchise business opportunities offer benefits for veterans.

Once you search, you can view different franchise business opportunities by age, startup costs, veteran discount ranking, or alphabetically.

Be aware that some companies try to hide their franchise fee behind the total investment. There are some with no startup costs, but they might have total investments of over $400K. Meanwhile, most include their website information, startup costs, and initial investment.

I mention this because some franchised business opportunities are more forthcoming than others. It’s always easier to work with a fully disclosed management team, and I would not consider a franchise opportunity that isn’t transparent.

You’ll want to go through the franchise website and establish whether they are:

• An established brand: Look at the number of followers on social media accounts and the reviews on sites like Google and Trustpilot.
• Oversaturated: Do they have too much competition in your area?
• Transparent about their fees: Some will openly disclose their initial fee, royalty fees, and marketing fees on their site. Others won’t.
• Offering training and support: Most franchises offer some business training and support to new franchise owners. It will normally be governed by the company culture and age of the franchise.

You can also try looking at easy-to-buy franchises.

Easiest Franchises to Buy

The easiest franchises to start include:

• Home cleaning: MaidThis
• Floor care: Wise Coatings
• Photo booth rentals: Photo Booth International

Choosing a franchise with a proven business model can significantly reduce risks. You’ll be able to follow a reliable blueprint that can lead to higher profit margins and a faster break-even point. Mike Andes, founder of Augusta Lawn Care, told us:

If someone works for an Augusta Lawn Care franchise for a couple of years, they qualify to buy a franchise without paying the initial franchise fee.

Once you’ve narrowed it down to one or two franchises, you can reach out to them to request the franchise disclosure document.

Step #2. Work With a Franchise Broker

Franchise brokers work with people who are looking to invest in franchise systems. These franchise brokers or consultants don’t charge the franchisee for their services but receive a commission from the franchisors. This may mean that they place the commissions earned above your best interests.

We work with several franchise brokers at UpFlip. Each takes a slightly different approach. Depending on what you need, you’ll want to contact one of the people below:

• Steve: He works with both restaurant and nonrestaurant franchise systems. Reach out to him if you want any type of franchise.
• Jenny: She doesn’t typically work with restaurants. However, she’s the best one to contact when you don’t know what franchise you want because she’s extraordinarily helpful. She has tests to help narrow down franchise opportunities based on your skills and interests.
• Jon: Jon is the most well-established franchise broker, but he doesn’t work with food franchises. I haven’t personally interacted with him, but others on our team have. Contact Jon to find out more.

Step #3. Find the Right Franchising System

You’ll work with your franchise broker to narrow your options. They’ll be able to help you understand franchisors and other franchisees’ experiences. They’ll also be able to determine whether certain franchises are a good cultural and procedural fit for your personality and lifestyle.

Consider how actively you want to be involved in the business, how much you can spend on a franchise, and whether you will qualify for most franchises. Jenny explained:

When you think about how to open a franchise, you want to start with your goals and personal situation, then work from there to identify the top franchise opportunities.

You’ll want to assemble documentation like your credit score, net worth statement, and cash-on-hand documentation. This makes it easier for franchisors to establish whether you financially qualify to run one of their franchises.

Step #4. Review the Franchise Disclosure Document

This step includes gathering information that isn’t readily available unless the company is a publicly held company. The Federal Trade Commission’s (FTC) Franchise Rule requires franchisors to complete a franchise disclosure document that includes 23 items.

Necessary Elements in a Franchise Disclosure Document

• Company history, predecessors, parent companies, and affiliates
• Officers’, directors’, and executives’ professional history
• Current and past litigation involving the company and major players in the organization
• Franchisor and management bankruptcies, if any
• Initial franchise fees and what impacts their costs
• Ongoing costs such as royalty fees or marketing fees
• The initial investment to get the franchise fully operational (in table form)
• Purchasing restrictions for equipment and supplies
• List of franchisee’s obligations including a table showing where each obligation is in the franchise agreement
• Terms and conditions of financing through the franchisor (if any)
• Any assistance the franchisor will provide including advertising, computer systems, and training
• Description of the geographical territory the franchisee receives and whether it can be modified
• How the brand’s trademark(s), service, and trade names may be used by the franchisee
• How the franchisee can use copyrights, patents, and other information
• What, if any, participation requirements are expected of the franchisee
• Restrictions on products and services the franchisee may participate in
• How to renew, transfer, and terminate the business arrangement and how to dispute conflicts between the franchisor and franchisee
• Public figures that are employed by the franchisor and how much they are paid
• Optional unit financial performance information
• Location and contact information of all existing franchise locations
• Audited financial statements for the past three years
• All the contracts that will be part of the formal contract including the franchise agreement, nondisclosure agreement (possibly), noncompete agreement (likely), and supplier agreements (common)
• Confirmation of receiving the FDD

Most franchises will have a contact form on their website. Others may request an initial consultation before providing their franchise disclosure document.

While you’re considering starting a franchise, you should review all this information before going for a discovery day.

Step #5. Evaluate Your Financial Situation

The next step is to evaluate your finances. Before you pursue franchise ownership, you’ll want to understand your overall financial health.

This involves figuring out how much money you have to invest. Make sure to include your savings and any other sources of funding.

It’s also important to check your credit score and financial history to see if you qualify for financing. You’ll want to:

• Gather tax returns, bank statements, and credit reports.
• Create a budget.
• Decide how much capital you have to dedicate to a small business franchise.

A financial advisor or accountant can help you evaluate your financial situation.

Step #6. Get Funding

Buying a franchise is similar to buying a business. However, getting a small business loan is easier for a franchise because it already has a proven record of success.

The franchisor may already have a deal with a bank to offer a small business loan to their new franchisee. You should have the following documents when you apply for a loan:

• A business plan
• Documentation of personal finances
• A copy of the FDD to show lenders the average annual income and financial risk of the franchise
• Proof of any assets you want to use for a secured loan

There are multiple options for funding when you decide you want to own a franchise. Some of the most common include:

• Liquid capital: Using cash, stock, and bonds to finance your business
• Secured loans: Using assets like a home, stocks, or crypto to secure a loan.
• Business partners: May not be allowed by your franchise contract
• Business line of credit: Revolving credit that lets you borrow as needed and pay interest only on the amount outstanding
• Equipment financing: Best for large purchases like kitchen equipment
• Traditional business loans: 3- to 5-year loans to buy a business

Check out our blog for a more detailed look at how to fund a business.

Step #7. Attend Discovery Day

Discovery day is an essential step in the franchise buying process. It’s an opportunity to meet with the franchisor and learn about their systems. During Discovery Day, you’ll want to ask questions, meet with existing franchisees, and immerse yourself in the franchise’s culture.

Discovery day is often held at the franchisor’s headquarters. You’ll likely meet the CEO, marketing team, and other corporate employees who will help support you as you become a franchisee and operate a franchise. You’ll also tour the headquarters and possibly an operational location to learn how the business runs.

A business owner should be looking for indications of whether the franchise ownership is legit or just trying to make money with the franchise fee. Indications that the franchise opportunity may not be as attractive as it is on paper include:

• Personality clashes
• Cultural differences
• Lack of preparation at the corporate office
• Statements that aren’t in the franchise disclosure document
• Not answering questions directly
• Failing to address concerns
• Pressuring you to enter a franchise agreement

If you’re ready to move forward, the next step is to focus on how to buy a franchise.

Step #8. Sign the Franchise Agreement

At this stage, you’re ready to be your own boss. You just need to review the franchising agreement. Franchise agreements are very similar to the FDD, but they are legally binding contracts between the franchisor and franchisee.

If you haven’t already been working with a franchise attorney or other franchise consultants, you should probably hire someone who is well versed in franchise law. Any required fees will be well spent in exchange for professional help when you’re learning how to start a franchise business.

Franchising.com lists the 10 provisions in franchise agreements. These elements are the parts of the FDD that both parties are contractually obligated to follow:

• Location or territory: What are your territory boundaries and exclusivity clauses? These will impact where to implement your marketing strategies and where you can do business.
• Operations: What operating procedures do you have to follow to own a franchise? The operations policies are a major portion of why people consider buying franchises. These are the best practices that take time and money to develop when starting from scratch.
• Training and ongoing support: What training and ongoing support is provided? Who pays for it, and how much does it cost? Each program may be different, but the goal here is for you to be capable of running the business when you open the doors.
• Duration: How long is the contract valid?
• Franchise fee or investment: What is the upfront cost, and what does it cover? You should probably calculate the payback period based on other franchisors’ experiences.
• Royalties or ongoing fees: What are the terms of ongoing fees, and what do they cover?
• Trademark, patent, and signage: How are you allowed to use the franchisor’s trademark, patent, logo, and signage?
• Advertising and marketing: What advertising does the franchisor pay, and what advertising does the franchisee pay? If they require more than 8% of revenue for marketing, you might want to be cautious.
• Renewal rights, termination, and cancellation policies: How is the franchising contract renewed or terminated by each party? How are legal disputes handled?
• Exit strategies: Does the franchisee have the right to put existing franchises up for sale? Does the franchisor have to approve the sale of a franchise? Does the franchise have to let the franchisor offer a buyback? Is the only way to sell the franchise through the franchisor?

This is the last real chance you have to back out of the agreement. Review the agreement documentation against the FDD with a legal representative. If there are any red flags, you may want to consider whether the opportunity is the best franchise to own.

Keep reading for information on how to buy a business location.

Step #9. Find a Location

You’ll need to find a business location if the franchise agreement requires a physical location outside of your home. The franchisor should be able to advise you on the type of location or area of town to look for. They’ll help you with any factors that may impact your success.

Some franchises may tell you that increased foot traffic is most important, while another business system might suggest you go with the lowest cost per square foot. According to their annual report, McDonald’s owns 55% of the land and 80% of the buildings that franchisees utilize.

Different considerations will apply depending on whether you operate a retail establishment, office building, restaurant, manufacturing facility, or service and installation company. Read our blog about choosing a business location for more information.

Step #10. Prepare to Open Your Franchise

To open your franchise, you’ll need to:

1. Get training and support.
2. Build out the location.
3. Purchase inventory.
4. Set up marketing and advertising.

Get Training and Support

You’ll have to attend corporate training to learn how to operate the business. Corporate training can last anywhere from a couple of days to several weeks. These sessions typically cover:

• Where to find resources
• How to perform the customer-centric functions of the business
• The franchisor’s preferred software
• The accounting process
• Any machines that are unique to the company
• Marketing tasks

Build Out the Location

You’ll need to build out your business location. Fortunately, most of this step is just supervision. Construction crews will likely perform the majority of the work on your new location.

The layout may be driven by the franchisor or by you. Make sure you follow any requirements the franchisor has.

Purchase Inventory

The corporate office should specify the opening inventory, but you must purchase inventory. Afterward, they might allow you to make decisions about how to run the most profitable franchise in your location. They might also fully automate the inventory process.

Are you interested in learning more about retail franchise beauty care products? Contact us today to secure an expert consultation!

Set Up Marketing and Advertising

Each franchise will have different marketing and advertising requirements. Some franchisors handle all the marketing and charge you royalties, while others oversee national marketing and provide you with procedures for the local equivalent.

You may need to set up social media and search engine ad accounts. There may also be press releases and other marketing initiatives where you’ll have to represent your franchise operation.

Step #11. Operate the Franchise

Once you reach this stage, you’re just operating a business like any other. You’ll be serving customers, managing employees, and handling business tasks like accounting.

We’ve conducted a ton of interviews with franchise owners. For instance, Sanford Booth runs a successful Big Frog franchise and makes over $500K a year printing T-shirts. Check out our interview with Sanford for more insights on how to own a franchise:

How UpFlip Can Help You

UpFlip helps small business owners succeed in a number of ways:

• We provide franchise information based on our own independent research. We also conduct interviews about low-cost franchises and profitable companies.
• We highlight preferred franchises such as Wise Coatings and Photo Booth International.
• We offer referrals to franchise brokers to help you buy a franchise.
• The UpFlip Academy includes startup courses taught by successful business owners.
• We’ve partnered with Big Sky Franchise Team to offer franchise development opportunities if you’re ready to become a franchisor.

Buying a Franchise FAQ

Should you buy an existing franchise?

Yes, if it’s profitable. When you buy an existing franchise, remember to ask a lot of questions.

Some franchises, like McDonald’s, will only let new owners buy an existing franchise. They want successful, experienced franchisees to open new stores.

Ask the following questions before buying an existing franchise:

• Why are you selling your franchise?
• How long have you owned the franchise?
• Why did you originally buy the franchise?
• What’s the annual gross revenue? Is it growing or shrinking?
• How much profit have you made over the years? Is it growing or shrinking?

We include these questions and more in our blog about questions to ask when buying a business. I suggest reading it for more information on why it’s important to ask questions.

What investment costs and franchise fees should I consider?

Initial investment costs occur before the franchise earns revenue. Meanwhile, franchise fees are what you pay directly to the franchisor. Initial investment costs can include:

• The franchise fee
• Forming an LLC or corporation
• Business licensing
• Buying or renting a location
• Remodeling
• Purchasing equipment
• Purchasing inventory
• Software not provided by the franchisor
• Furniture for the franchise location
• Insurance
• Marketing
• Travel costs

What if I want to buy a franchise without money?

Most franchisors won’t let you. They expect some actual investment. If you find one, let us know, but franchises have requirements for:

• Credit
• Net worth
• Liquid assets

If you have a high net worth but low liquid assets, consider getting a secured loan or creating a corporation with a rollover business startup.

How much does it cost to buy a McDonald’s franchise?

According to the McDonald’s annual report, total development costs to open a new restaurant were approximately $4.4 million. McDonald’s pays that and rents the equipment and land to the franchisee with a 20-year agreement.

McDonald’s doesn’t sell new franchises to new franchisees because they believe it protects their business to have experienced franchise owners open new locations. You’ll find a ton of answers online pointing to their $45,000 franchise fee and the requirement to have $500,000 of liquid assets.

In addition, you’ll pay 4% per year in royalties to purchase a McDonald’s.

How much money can I make by owning a franchise?

Each year, most franchisees make between $50,000 and $100,000 for every franchise location they own.

How should I prepare to buy a franchise?

Learn as much as you can before approaching the franchisor. Then prepare your financial statements that prove your credit score, net worth, and liquid assets are appropriate.

How does buying a franchise save money?

Buying a franchise removes most of the learning phase of business development. The franchisor has already:

• Created a business plan
• Designed branding
• Conducted market research
• Conducted product research
• Created business systems
• Developed a successful marketing plan
• Proven that the business model is successful

All you have to do is find customers in your area and follow the rules.

How is a franchise different from a chain?

There are several important differences between a franchise and a chain. A single business entity typically owns a chain, while multiple different business entities own franchises. A franchise may also have corporate stores.

For instance, Augusta Lawn Care’s founder Mike Andes owns multiple corporate locations and offers franchises. He told us:

I use my corporate stores to test new processes before passing them on to the franchisees.

Check out the video below that explains the differences between buying a franchise and starting your own business:

Where can I find the laws governing franchising?

Franchises are governed by the Federal Trade Commission. They specify the features of a business that qualifies as a franchise:

• Promises to provide a trademark or other commercial symbol
• Promises to exercise significant control or provide significant assistance in the operation of the business
• Requires a minimum payment of at least $500 during the first six months of operations
• Outlines the laws franchises must follow
• Provides the necessary items included in the franchise disclosure document
• Abides by the items included in the franchise agreement

It’s crucial to consult with franchise attorneys to understand the legal requirements and documents involved in franchising. Make sure to also read the FTC guidance before buying a franchise.

Live Wealthily Ever After

At this point, we’ve discussed everything from choosing a certain franchise to writing a business plan. We also explained more about the documents you’ll see when buying a franchise.

You now have the information to start buying a franchise. Once you’ve got a few years under your belt, you can start thinking about how to expand, hire more people, or buy more franchises.

What franchises would you like us to interview in the future?

On a shoestring budget (and what entrepreneur isn't?), it really pays to scrimp and save. Just in case you've forgotten the value of a hard-earned penny, we've come up with a slew of money-saving ideas to boost your business's bottom line-from cutting your legal bills to inexpensive ways to draw in customers. Though some tips will save you more money than others, the end result of your overall spendthrift strategy could add up to a bundle.

Penny-Pinching Promotions

1. Piggyback your advertising. Including advertising material in other mailings, such as in invoices, saves postage and other costs, says J. Donald Weinrauch, co-author of The Frugal Marketer. Likewise, make the most of your point-of-purchase opportunities by tucking coupons, newsletters or other promotional fliers in the bag with customers' purchases.

2. Be a good neighbor. Split advertising and promotion costs with neighboring businesses. Jointly promote a sidewalk sale, or take your marketing alliance further by sharing mailing lists, distribution channels and suppliers with businesses that sell complementary goods or services.

3. Ask the people you know for help. The kind of support you'd most like to get from your contacts is referrals-the names of specific individuals who need your products and services. So go ahead and ask! Your contacts can also give prospects your name and number. As the number of referrals you receive increases, so does your potential for increasing the percentage of your business generated through referrals.

4. Got a happy customer? By telling others what they've gained from using your products or services in presentations or informal conversations, your sources can encourage others to use your products or services.

5. Make a special TV appearance. Local cable TV stations often have very reasonable advertising rates at time slots throughout the day and night. Though you won't necessarily reach prime-time viewers, you will make an impression where it counts-in the comfort of potential customers' homes.

6. Offer expert advice. Teaching a class, speaking at a community meeting, or writing an article for a local paper not only makes you look like an expert but garners low-cost attention for your business.
Read more online here.

Internet Ideas

7. Start your search engines. Research your market and find potential visitors for your Web site by looking through Usenet newsgroups (forums on the Internet where people post messages for public viewing) and special-interest groups related to your target market, product or service. Or, if you have America Online, visit their Small Business Center, which includes libraries of small-business information you can download at no charge.

8. Cut costs when setting up your online store. Think going online has to cost an arm and a leg? You can start out by selling items for next to nothing on online auction sites like eBay and Yahoo! Auctions . If you want to create a professional storefront, there are several "Web site in a box" solutions available, usually for a low monthly fee.
Read more online here.

9. Start chatting. Find newsgroups that cater to your audience, and join the fray. "I didn't start [participating in online discussion groups] to generate business, but as a way to find information for myself on various subjects," says Shel Horowitz, owner of Northampton, Massachusetts-based Accurate Writing & More and author of several marketing books, including Grassroots Marketing. "But it turned out to be the single best marketing tool I use. It costs only my time. [One] list alone has gotten me around 60 clients in the past five years." Always include your URL in your signature, but don't do any hard selling-most groups will ban you immediately. Instead, provide useful information that'll make people will want to click on your site.

10. Spread the word yourself. Are you letting people know what your URL is? Try putting it on your letterhead and business cards and in signatures-wherever potential visitors are likely to see it. Include it on employee uniforms, any promotional items you give away, all press releases, in your Yellow Pages ad and on company vehicles.

Location Logic

11. Get a suite deal. You don't have to run your office full-time from an executive suite to benefit from its services. Many homebased entrepreneurs find executive suites meet a range of needs, including access to a private mailbox and a receptionist to answer or forward calls to your home office. Visit the Office Business Center Association International Web site for more information.

12. Be mobile. While the costs of establishing a permanent retail location can be steep-you may spend up to $100,000 or more, with leases spanning three to 10 years-carts, kiosks and temporary spaces can be an easier way to get a foot in the door with a lot less risk. The upfront investment for a kiosk or a cart ranges from just $2,000 to $10,000, according to Patricia Norins, publisher of Specialty Retail Report. License agreements for carts and kiosks are shorter and are usually renewed every month up to one year depending on the location. This arrangement makes it easy for entrepreneurs to "come in, try it out for a month, and if their product isn't working, shift to a new product line or close up shop and move to a new location," Norins says.

Office Overhead

13. Buy recycled printer cartridges. Check Google or your Yellow Pages for a local recycled printer cartridge supplier. Or if you want to mix your charitable instincts with your printing needs, visit www.lasermonks.com , a remanufactured printing supply company run by a group of monks in Wisconsin who, after business expenses are paid, donate their profits.

14. Fill it out for free. Instead of buying forms at your local office supply store or spending time creating them yourself, you can find tons of free forms online that you can download, customize and print. Our free forms on Formnet can get you started.

15. Get free software. Visit Download.com to try hundreds of software products for free through trial downloads, freeware and limited versions of the full product. Another tip: If you haven't found what you're looking for through Download.com or our software guide, check out the manufacturer's site. Most offer free trial downloads.

16. Buy used equipment. Save up to 60 percent by buying used computer equipment, copiers and office furniture from stores such as the nationwide Aaron Rents & Sells chain. Auctions and newspaper classifieds are other good sources of used equipment.

Insurance Intelligence

17. Save by association. When looking for insurance, check with your trade association. Many associations offer competitive group insurance.

18. Be prepared. Buying appropriate insurance upfront saves money in the long run, says Jeanne Salvatore of the Insurance Information Institute , a nonprofit organization in New York City. Consider what situations would be catastrophic to your business and protect yourself with adequate insurance. "Disaster recovery," says Salvatore, "is one area where business owners shouldn't scrimp."

19. Make a foul-weather friend. By arranging for an alternative place to run your business in case of a major disaster, you may be able to save on business interruption insurance, advises the Insurance Information Institute. For instance, you could arrange with a firm in the same industry to use their facilities in case of damage, and vice versa.

20. Check up on your medical insurance. Before choosing a medical insurance carrier, ask for information on past claims and the loss ratio of paid claims to premiums, advises the Council of Better Business Bureaus in Arlington, Virginia.

21. Raise your deductible. Raising the deductible on your insurance usually lowers your premiums. Even if you end up having to pay the deductible, it's likely to be less than the amount you save.

Employee Economics

22. Aim to lease. Employee leasing-in which you turn over your work force to a professional employer organization that leases your employees back to you-can save you substantial cash on employee benefits, says Bruce Steinberg at the American Staffing Association (ASA). For referral to a leasing company near you, visit the ASA online at www.staffingtoday.net .

23. Go with the flow. Rather than paying for employees who sit idle when business is slow, consider hiring temporary employees to handle surges in business.

24. Make experience count. Get free or low-cost help-and give local college students a chance to learn the ropes-by hiring interns.

25. Use independent contractors. Employers generally don't have to withhold or pay any taxes on payments to independent contractors. But be very careful that your independent contractors fit the definition provided by the IRS or you could face penalties.

26. Commission your sales force. Overhead, salaries, incentives, training costs, fringe benefits and expenses add up when you're hiring your own sales representatives. Contracting independent manufacturers' sales reps, paid on commission only, is less expensive-and often equally effective.

Shipping Savings

27. Clean up your mailing list. The U.S. Postal Service will clean up your mailing list for free, correcting addresses, noting incomplete addresses and adding ZIP+4 numbers so you'll be eligible for bar-code discounts.

28. Prune that mailing list even more. The Direct Marketing Association offers this checklist of cost-cutting ideas. Eliminate nonresponders and marginal prospects; print "Address Correction Requested" on the face of your mail; investigate co-mingling your mail with that of other small mailers to take advantage of discounts available mainly to large mailers; and stockpile mail to build up larger volumes.

29. Be an early bird. Send mail early in the day, and you can usually expect to get one- to two-day delivery for the price of a first-class stamp.

30. Shop around for an overnight courier. Overnight delivery rates for the major couriers are competitive; however, if you're willing to wait a few hours-or even an extra day-you could save.

Tax Tactics

31. Mind some petty pointers. Don't get careless about your petty cash account. "Though you don't need receipts for expenses under $75, you should still track these expenses since they can add up," advises Holmes Crouch, author of 18 tax books.

32. Hire your children. If your children are at least 14 years old and pay their own taxes, it pays to take advantage of their lower tax bracket. "You can essentially transfer income from your business to them [to save money]," says David L. Scott, author of The Guide to Saving Money (The Globe Pequot Press).

33. Take a stand on taxes. If your business is new in the neighborhood, you may be at a higher tax rate than those who have been there longer. "Go to city hall to determine what your neighbors are paying, and use this to negotiate a better rate," says Pete Collins of New York City-based PricewaterhouseCoopers LLP. "Expanding businesses can often negotiate with community authorities, who want them to stay in town rather than move and take jobs elsewhere."

34. Homebased? Don't overlook crucial tax deductions. In addition to being able to deduct a portion of your rent or mortgage interest and utilities as a business expense, you can also deduct a percentage of various home maintenance expenses, along with a portion of the cost of services such as house cleaning and lawn care. Check out the IRS's Web site , or check with a knowledgeable tax advisor for more information.

35. Get out on the town. If much of your business is conducted at restaurants or you find yourself driving to clients' offices, make sure you take those deductions. If you entertain clients or potential clients to discuss a current or future project, you can deduct a portion of your entertainment costs. To qualify for this deduction, you must maintain a log of entertainment-related expenses you plan to deduct. For mileage, you can deduct 37.5 cents per mile in . This figure usually changes annually, so check with your accountant at the beginning of each year.

Financial Focus

36. Make credit comparisons. If you tend to run unpaid balances on your credit cards at the end of the month, shop for a card with a low interest rate. If you pay in full, it's more important to avoid an annual fee and look for a longer grace period. "Often credit card issuers waive the annual fee or reduce the interest rate if you ask," says Scott. "Just tell your credit card company you've had several solicitations from other companies with more favorable interest rates or no annual fees, and ask if they will reduce yours."

37. Avoid cash advances. "Credit card companies usually charge an upfront fee of up to 2 percent of the advance, with interest accruing immediately," says Scott.

38. Bank on an early deposit. Make bank deposits early enough in the day so you get credit (and start earning interest) that day.

39. Get checks in the mail. Ordering your checks from a printing company often costs less than getting them from a bank. Options include Checks in the Mail and Designer Checks .

40. Form a buying alliance. Join with another business or a trade association for bulk purchasing discounts.

41. Take it with you. If you're near your suppliers, pick up your order yourself-or perhaps have a friend or family member do it for you, suggests Sarah Williams Steinman, president of Casco Bay Herb Co., an herbal soap manufacturer in Cumberland, Maine. For example, Steinman's husband travels throughout the Northeast. "He keeps me updated as to when he might be near one of my suppliers," she says. "He often travels through the town where my olive oil supplier is, and he'll pick up a few hundred pounds of oil on his way home. That saves me about $75 in shipping." Caution: Pick up supplies yourself only when it truly saves you money. If it's taking you away from a revenue-producing activity, you're not really saving.

42. Be reluctant to give credit. If you do extend credit, thoroughly check the client's credit background, says Collins. For less-than-creditworthy accounts, Collins advises considering the following actions: Collect cash in advance; send partial shipments; request letters of credit, personal guarantees and a pledge of assets; take out credit insurance; or think about factoring (see below).

Professional Policies

43. Query your consultants. The professionals you work with regularly are often easy to bargain with, thanks to the rapport you've developed with them. Ask your insurance agent, accountant or attorney how you can cut back on their costs. You'd be surprised at the suggestions they might offer on ways to cut your premiums, reduce billable hours or avoid huge retainers. You might also barter your services.

44. Be a legal eagle. When hiring an attorney, make sure you have a written fee agreement to prevent surprises. It should include an estimate of the time to be spent on your case and specify what's covered in the fee-including typing or copying-and what is not.

45. Learn something new. Rather than pay a consultant to write your press releases, for example, hire one for an hour or so to show you how to do it yourself.

46. Run from the law. "Avoiding lawsuits is a big factor in business success," says tax book author Crouch. "Even arbitration can get expensive." The best alternative: Try to work out any problems before they grow to the point that attorneys get involved. "Don't ignore any written or complaints."

Buying Brainpower

47. Stretch your budget with barter. Swapping one product or service for another is a good way to avoid cash outlays-and unload slow-moving inventory. If you'd rather not bargain with other businesses directly, hire a commissioned barter broker (listed in the Yellow Pages under "Barter"), or join a commercial barter club or exchange. The National Association of Trade Exchanges (NATE) is a clearinghouse for member exchanges across the country, allowing business owners to swap just about anything with anyone. Participants typically receive "trade dollars" for their goods or services, which are brokered across cities nationwide with the help of NATE. Visit NATE at www.nate.org.

48. Time your payments. Ask suppliers if they give discounts for early payment. If not, it's to your advantage to pay your bills-including utilities, taxes and suppliers-as late as possible without incurring a fee, advises Scott. "The longer funds are under your control," he says, "the longer they're earning a return for you rather than someone else."

49. Join an association. Many trade and business associations have reasonable membership fees and offer discounts on everything from insurance, travel and car rental to long-distance service, prescriptions and even golf course fees.

50. Seek at least three bids on everything. Even mundane purchases merit shopping around. If you quote a competitor's lower price, a supplier or vendor will often match that price to win your business.

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