What kind of person becomes an entrepreneur? What characteristics must a successful entrepreneur have? Whether people are born with some of these traits or learn them is a topic for a good debate, but what we do know from numerous studies is that successful entrepreneurs tend to have several important personality characteristics in common.

Entrepreneurs are often strong individualists, optimistic and resourceful, and they usually have a high degree of problem-solving ability. They also tend to be persistent, self-confident, self-reliant, versatile, resourceful and have a strong desire to achieve. Additional traits include being objective, realistic, open to change, and looking for and creating opportunities.

Here are some other common traits of an entrepreneur:

Strong goal orientation.
Ability to set clear goals that are challenging but attainable; ability to continually re-evaluate and adjust goals to make sure they are consistent with one’s interests, talents, and values as well as personal or business needs. Rather than being content with reaching goals, successful entrepreneurs continue setting new goals to challenge themselves.

Ability to withstand business reversals without quitting
Though perhaps disappointed, not discouraged by failure; ability to use failures as learning experiences, so that similar problems can be avoided in the future; attitude that setbacks are only temporary barriers to goals; strong capacity to build on successes.

Willingness to accept calculated risks
Ability to identify risks and weigh their relative dangers; preference for taking calculated risks to achieve goals that are high but realistic. This is contrary to the stereotype that entrepreneurs are gamblers or high-risk-takers, the risks involved are often moderate due to the amount of planning behind them.

Strong desire for independence
Genuine desire to be one’s own boss, free from external direction and control; sincere willingness and proven ability to be self-disciplined in sometimes isolated working conditions; ability to organize activities to reach personal goals. Successful entrepreneurs are not usually joiners by nature. They often join only to network: to make business contacts, further their ventures, or obtain useful information to solve problems.

Ability to handle uncertainty well
An entrepreneur must have an ability to live with the uncertainty of job security. He or she must face many crises, take risks, and allow for temporary failures without panic. Successful entrepreneurs accept uncertainty as an integral part of being in business.

Ability to apply ideas in creative ways
Strong desire to originate an idea or product, to develop something new, to be innovative, to make something happen, to imprint personality, dreams, and ideas on a concept in a unique and different way; powers of both observation and imagination to foresee possible market ideas.

Sense of purpose
A feeling of mission must motivate the person to go into business; the activity must have meaning. The mission may be to make an attractive profit, to sell some necessary and unique product or service, or to develop ideas or skills without the constraints of others’ expectations.

Did you know that you can make more money simply by asking for a better deal? Most people don’t realize that there is room for improving the financial arrangement or transaction, and therefore don’t ask. Or sometimes, people just don’t know how to negotiate or feel intimidated by the process.

The easiest way to make or save money is to negotiate the best bargain. This means knowing how the system operates and knowing how to ask. Quite simply, if you don’t ask for a better deal you won’t get one. It is a shift in attitude and approach for many people, but it will definitely reap financial dividends for you. Given the natural competitive environment of business, it is normal for companies to want your business and to bend to accommodate your needs–but you still have to make requests.

There are many opportunities to practice your negotiating skills, such as when you are buying a GIC or mutual fund, for example, or borrowing money for a line or credit or for your business.

Here are some ways to enhance your financial situation by applying various negotiating tips and strategies that work. You have nothing to lose and everything to gain–including self-confidence–if you use an informed, assertive approach when dealing with your money.

Guaranteed Investment Certificates (GICs)
When you check with your financial institution, you will find that there are many options available to you. The rate you see in the newspaper or shown in your local financial institution is referred to as the “posted” rate. You may logically assume that it is the best rate they can offer you. Most people do. However, most branch managers have the discretion to give you up to l/2 per cent or more interest than the posted rate, in order to get or keep your business. All you have to do is ask for an extra l/2 per cent. If you feel uncomfortable doing so, simply blame someone else–you could tell them that your accountant recommended that you do so, for example.

Financial institutions traditionally offer a l/4 per cent point if you put new money into a GIC or RRSP and a further l/4 per cent for transferring RRSP or RRIF funds from another institution, especially around RRSP time. However, you don’t need to move funds to get those rates. You can keep your funds where they are. In addition, ask for the full l/2 per cent or more regardless of the time of year. If you have a lot of money involved, (say, $l00,000 or more), then you can try to improve your situation by asking for a full 3/4 per cent or more over the posted rate for a fixed-term investment such as a GIC. This is especially important if you already have an established relationship with that institution.

In addition, if you are moving funds from one institution to another, ask the new institution to pay for any transfer fees charged by the other institution, and waive its own setup fees if applicable.

Self-Directed RRSPs or RRIFs
If you are looking after all the investments in your RRSP or RRIF by means of a self-directed program, there are ways you can save money. Almost all types of financial institution offer the self-directed option, including banks, trust companies and credit unions. You have to place it with a trust company or an institution that is acting as a trustee. The annual management fee ranges from about $25 to $200+, depending on the institution and the nature of services that they provide. You can ask to have the fee waived or reduced. If you are being charged an extra fee for various transactions, ask to have the administration fee waived. In addition, if the financial institution is charging you for activity in your account, such as purchases, redemptions or transfers, ask to have them waived or cut in half. If there is a lot of money involved, or if you have other financial relationships with the institution, the more negotiating leverage you have for a waiver of fees. There could be different transaction fees, depending on whether it is a stock, load or no-load mutual fund. If you are transferring funds to another institution, ask the new institution to cover the transfer fee. This is a common practice, but you want to ask to make sure you get that benefit.

You may prefer to work at home and not rent office space. Or you may prefer to minimize the risk of leasing and rent an office in an executive suite business centre. However, if you decide to take the jump and rent office space and commit to a number of years, you should be aware of the variations available to you. That way you can assess the pros and cons and negotiate a lease that is suitable for your present and projected business needs.

The following types of leases are the most common ones. The name used to describe each lease may vary in your region, but the concept behind the description is the same.

Net lease
In a net lease situation, the tenant pays a flat rate which is all-inclusive of heat, light, water, taxes, common area use, ground maintenance, building repairs, etc.

Net lease plus taxes
This is similar to the net lease, except that there is an agreed-upon extra expense for taxes. Any taxes over and above the base tax rate are passed on to the tenant totally or partially, depending on what is negotiated. The extra cost for taxes would normally be passed on once a year once the tax assessment has been obtained and paid by the landlord.

Triple net lease
In this type of lease situation the base rent is a certain price (for example, $10 per square foot of area rented), but the tenant is responsible for paying his proportionate share of all the extra charges incurred by the landlord. These are normally outlined in the lease agreement. These extra costs or operating expenses could add up to the equivalent of another $6 or $7 per square foot, for example. The total monthly rental outlay would therefore be approximately $16 per square foot. The operating costs may fluctuate each year based on taxes, maintenance, insurance, administrative and management costs. When one refers to a cost per square foot for lease space, it is quoted on an annual basis; to calculate the monthly rent, you multiply the square footage of the premises by the cost per square foot, and divide by twelve.

Index lease
This type of lease is one in which the rent varies based on a formula of costs incurred by the landlord. For instance, the lease may vary every year based on the cost-of-living index to account for inflation.

Variable lease
A variable lease is one in which the annual rent is agreed upon in terms of how it is calculated, but the monthly rent may vary depending on the seasonal nature of the cash flow of the business. For example, there could be a very low or no-rent period of three or four months because business activity is slow. The rent for the remaining months of the year would be high, to compensate for the period when the business was unable to pay rent.

Graduated lease
This type of lease requires an increase in rental payment every month for a specified period of time. This is usually done to assist a business in its first year of start-up, so that the monthly payments are related to the increase in cash flow and revenue of the business. At the end of the graduated period, the rental payments by the tenant would then be at a fixed rate, usually as in a net or triple net lease.

Percentage lease
The percentage lease is commonly used in the renting of retail stores in shopping centres. The landlord therefore obtains the benefit that the tenant obtains in terms of the large traffic volume going through the shopping centre, which the landlord has established. Some of these types of leases are based on net profit and others on gross profit, with a base minimum. The landlord also requires stringent accounting and reporting controls. In effect, they have become your quasi-business partner. Such a relationship can be risky and de-motivating. It depends on the deal.

Always make sure that you have a lawyer, experienced in leases, give you objective and candid feedback on the lease terms. Leases are full of jargon that has significant legal implications. You want to understand every aspect of the terms of the proposed lease. The landlord’s lease is almost invariably one-sided in the landlord’s favour. You need to have your lawyer negotiate a more balanced lease on your behalf, if at all possible. Otherwise, take your business elsewhere.

Every type of small business requires marketing. How to budget and pay for your marketing is an important issue, of course, but more important is how effectively the money is used to accomplish your specific marketing goals.

It is important to understand what marketing is and some of the low cost ways of marketing your business while being aware of the bottom line in doing so.

Marketing involves a wide range of factors which impact on the public perception of your business. These factors will influence the desire of the potential customer to deal with you or not. It is simply not possible to succeed in business without marketing. The types of factors which could affect the perception of others when assessing your business include: your personality, business name, business location, business cards and stationery, the clothes you wear, the personnel you hire, how your phone is answered, and how quickly you respond. Other influencing factors include: the nature and form of your advertising, promotion, staff image, sales presentations and contracts, quality of sales and service, site management and customer relations, and problem solving.

Here are some low-cost effective options to consider:

Word of mouth
It is a cliché; but an accurate one: word of mouth is the best form of advertising. The more people promote your business because they know you or are satisfied customers, the more sales you are going to make. Personal testimonials are very persuasive and credible. Attempt to cultivate positive and respectful customer relations at all times. Remember, the customer is always right, even when the customer is wrong. One dissatisfied customer can taint your goodwill to many other people. You should therefore deal with any customer complaints in a prompt and efficient manner.

Brochures
Brochures and posters can be very effective and relatively inexpensive. Some of the advertising uses of a brochure are: leaving it with a prospective customer; distributing it at a seminar, presentation, trade show, or other distribution location; sending it as part of a direct mail campaign; and mailing it after a written or phone request for further information. Always obtain competitive quotes on brochure production and printing, as prices can vary considerably. If you want colour printing done, ask the printer to do it at the same time as they are doing the same colour run for others. This should save you money, if you can wait for a few days.

Classified and display ads
You may wish to consider advertising in the classified sections of newspapers, magazines, or newsletters targetted to your market. Display advertising can be expensive and is not appropriate for everyone, although it can be very effective if properly targetted. A larger ad does not always bring in a greater response. You may want to test the market by placing classified ads in selected community or daily newspapers, and tracking the response. You may then want to test a display ad in those newspapers that produced a good response.

Co-operative advertising with suppliers
Many manufacturers and suppliers will pay for a portion of your ad if you use their name or logo in some way in your ad or other marketing promotion. Do your research and talk to your suppliers and their suppliers. The savings to you could be 50% or more.

Teaching courses and seminars
Teaching adult education classes is an effective way to make business contacts, meet prospective customers, obtain public exposure, and enhance your reputation as a credible expert in your business. In addition to being paid, teaching also has the fringe benefit of keeping you current in your areas of interest. Contact the continuing or adult education program coordinators of school boards, colleges and universities in your area. If you don’t feel comfortable speaking in public and want to develop that skill, you can take courses through school board or college adult education programs and/or join a local Chapter of Toastmasters.

Website
Having your own website is expected by your customers, and can be a cost-effective marketing and client/customer acquisition program. If you are selling products, it can also be a highly profitable e-commerce tool.

Before you decide what forms of marketing to consider and the time, energy and financial resources you wish to commit, make sure you do a marketing plan in writing that you can understand and use. This should also include a marketing planning calendar and the tracking procedure to monitor how effective each form of marketing is to you.

One of the joys and realities of being in business is the prospect of needing money, either in your start-up or during growth or expansion. With a pragmatic understanding of the dynamics of the loan approval process, you can greatly enhance your prospects of success.

Once you start negotiating with the financial institution, you must sell the lender on the merits of your business financing request. However, as in all sales presentations, consider the needs and expectations of the other party – in this case, the loans officer. A loans officer will be interested in the following:

Your familiarity with the business concept and the realities of the marketplace, as reflected in your business plan.
Your ability to service and pay back the debt with sufficient surplus to cover contingencies, including interest charges, so that you eventually repay the debt in full. This would be demonstrated in your cash flow forecast and projected income statements.
Your ability to provide security to the bank for the loan.
Your level of commitment, as shown by your equity in the business or cash investment in the particular asset being purchased.
Your secondary source of repayment, including security in the event of default or other problem, and other sources of income.
Your reasons why the money is needed and how long you need it for, and how much you need.
Your track record and integrity, as shown in your personal credit history, your business plan, and business results or past business experience.
Your businesslike approach. Remember, a lender is in business for the same reason you are – to make a profit, and to minimize or eliminate bad debts. They are not venture capitalists.
Your judgement in supplying information. Be sensible with the number of documents you provide at the outset. You do not want to overwhelm the loans officer with material.
Your personal appearance. You should present yourself in a manner that projects self-confidence and success.
Your consideration in allowing sufficient lead time for approval. The lender needs a reasonable time to assess your proposal. Also, the loan may have to be reviewed at another level within the financial institution.
Your credit rating. It’s a good idea to review your credit rating periodically, as there may be errors or blemishes to correct in your file. Note your positive and negative points, so you can discuss these when raised by the lender.

If your request for financing is approved, make sure you understand and can live with the conditions before you commit to them. Depending on the amount of money involved, you may wish to ask your accountant and lawyer to assist you in the loan application in advance and to review the bank’s approval. Remember that it is a highly competitive lending market place, so consider at least three comparative quotes.

If your request for financing is not approved, find out why. Use the lender’s experience to your advantage. Lenders handle many requests for financing, and have experience in the financial aspect of many businesses, even if they do not have personal business management experience. If there is something wrong with your financial proposal, see if it can be corrected and then reapply. Otherwise, use this knowledge when approaching other potential lenders, or on future occasions when seeking funds.

Some of the reasons for a loan rejection include: being outside bank policy, business idea considered risky or unsound, insufficient collateral, perceived lack of financial commitment, poor business plan or purpose of loan not explained or unacceptable.

Now that you know the factors that lenders take into account when considering a loan application, evaluate your situation based on those criteria. Adopt a positive, self-confident and selective approach. Remember, you are doing the lender a favour by agreeing to give them your business, not the other way around.

Have you considered borrowing or obtaining money from people you know best, who are closest to you, people who believe in you, and whose most natural inclination is to want to help you be happy and successful? More than 50% of people have gone that route. This type of financing is considered as “lovemoney”.

“Lovemoney” financing, although attractive, is not without its perils. It is most important to consider all the implications for you and your family and friends before approaching them for investment monies or loans. It is a cruel fact of life that relationships are almost always damaged when money is lost. Even when the prospective investor or lender has confirmed in advance that he or she can afford to lose the money, and is willing to take the risk of doing so, when it actually happens it is quite another thing.

In a complex, frenetic and impersonal world, our family and friends are the safe refuge with whom we can seek comfort, solace and sanity. You may feel extremely confident and enthusiastic about your business potential, but go slowly and thoughtfully before bringing your family and closest friends into your business deal. How will you feel if you let them down? How will you feel if they never look at you with quite the same degree of trust and respect again? Or if permanent estrangement occurs or you cause them serious financial hardship and stress? While people can forgive, few will ever forget. Parents are generally the most forgiving of financial loss, while friends tend to be the least.

If you are still determined to access financing from family and friends, here are some recommendations to temper the outcome in a worst case scenario.

Borrowed money
Attempt to give security for the loan and always put the terms of repayment in writing and give a promissory note. It shows good faith, responsibility and concern. Security could be in the form of collateral security on assets of your business or a collateral mortgage on your home, if you have one. By securing the loan, your family or friends would be secured creditors and would be paid off from assets before any unsecured or general creditors.

Investment money
If you are asking friends or your family to invest in your business, by putting in equity capital in your enterprise and becoming shareholders then there are additional options to consider. You could structure the money received as a shareholders loan in part or in full, with flexible terms. That way the investors would be paid back their investment money tax-free from your business. Before they invest, show your investors your business plan, including risk factor and suggest they have it reviewed by their accountant, lawyer or outside consultant to receive an independent opinion. Have a shareholder’s agreement prepared. A carefully written agreement that sets out the possible upside and downside, the risks and benefits, the rights and remedies, is essential to attempting to maintain good relationships with your investors when things go bad, or at least are off target as can frequently happen. Finally, make sure you report to your investors on a candid and regular basis, to keep them fully informed. Do so at least once a month and as any problems develop. This is against the inclination of most entrepreneurs, who optimistically believe, or at least hope, that the solution to a problem is around the corner. Most investors however, can accept your failure and their financial loss if they know that you have kept them fully and honestly informed, and you have done your best to make the business work.

There are pros and cons to some of the options covered, so make sure you get good legal advice before structuring your business financing relationship.

Whether you currently have employees or not, the chances are that as your business grows, so will your need to have employees. At the outset, you will probably be playing the role of manager, in addition to the other roles you play.

Managing employees is cited as being the biggest problem to small business owners. This is because employers very often don’t know how to handle employees. Effectively managing employees is a skill acquired through training and practice. Many books have been written on the subject, and courses are regularly offered through educational institutions. If you are hiring or managing staff, you should spend some time reading and taking courses on this topic. By applying some basic principles of respect and encouragement in the development of each staff member as an important individual, you will reap the rewards of loyal, trustworthy, and dependable staff. The following sums up the course on human relations (source anonymous):

The 6 most important words: “I admit I made a mistake.”
The 5 most important words: “You did a good job.”
The 4 most important words: “What is your opinion?”
The 3 most important words: “If you please.”
The 2 most important words: “Thank you.”
The 1 most important word: “We”
The least important word: “I”

Leadership style
A leader is one who is in control, takes charge of a situation, and is decisive. A good leader or manager is fair, firm, and consistent, as well as flexible. Being flexible doesn’t mean that you have to change your personality. You can be firm and still be friendly; you can be decisive and still be polite. You can give someone more freedom without giving away the company. The better you are at knowing how to treat your employees, the more effective you will be as a manager. And the employer-employee relationship will be more satisfying to both parties.

Hierarchy of needs
Many theorists believe that people have different need levels in their work environment. They progress from one stage to the next, although some people “plateau” or stay at a certain stage for a period of time before advancing on. Briefly, the stages follow:

The basic or survival level is the starting point. In order to accept a position, a person needs to be assured that the wages offered are sufficient to meet his/her basic needs for survival (food, shelter).

A person’s security needs relate to job, financial, and health security. These are most often addressed by an employer in a benefits package. Examples include: training and development, tuition fees for night courses, seniority systems, wage incentive plans, profit-sharing plans, insurance, pensions, medical/dental plans.

Having satisfied the basic and security needs, a person then seeks to satisfy his/her social needs. Having an opportunity to learn new skills, to make suggestions on his/her area or department, to interact with other staff, to attend staff meetings and be called upon for input are examples of how social needs may be met.

Professional advisors are essential to small business success. Your team of professional advisors should include a lawyer, a tax accountant, and ideally a consultant or mentor experienced in small business ownership. They can provide knowledge and expertise in areas which you have little experience. They will round out your management so that your business is operating most efficiently, with minimal risks and good, sound information. It is important to recognize when it is necessary to call in an expert to assist you.

Because of the costs associated with hiring a lawyer or accountant, some business owners are inclined to try the do-it-yourself approach. This can be a shortsighted decision and detrimental to your business. For instance, the person who processes his or her own income tax return rather than hiring a tax accountant may miss out on small business tax exemptions that could save much more than the cost of the accountant’s time. Or a person who signs a lease or a contract without having it reviewed beforehand by a lawyer may regret it for many years to come.

You should be very selective in your screening process. The right selection will enhance your prospects for profit and growth; the wrong selection will be costly in terms of time, money and stress.

There are many factors you should consider when selecting advisors. For example, the person’s professional qualifications, experience in your specific area, and the fee for services are factors you will want to consider. It is helpful to prepare a list of such questions, plus others relating to your specific needs, and pose these to each of the prospective advisors. Some people may feel awkward discussing fees and qualifications with a lawyer, for instance, but it is important to establish these matters at the outset before you make a decision to use that person’s services.

The most common selection criteria include qualifications, experience, compatible personality, confidence and competence in the area concerned, and fees. Having a comparison of a least three advisors is the ideal approach before you select the one for your needs

Qualifications
Before you entrust an advisor with your work, you will want to know that he or she has the appropriate qualifications. These may include a lawyer’s or accountant’s professional degree, a university degree in the area of expertise, or some other professional training relative to the area of work.

Experience
It is very important to take a look at the advisor’s experience in the area where you need assistance. Such factors as the degree of expertise, the number of years’ experience as an advisor, and percentage of time spent practicing in that area is critically important. The amount of reliance you are going to place on their advice and insights is obviously related to the degree of experience they have in the area. For example, the fact that a lawyer might have been practicing law for ten years does not necessarily mean that the lawyer has a high degree of expertise in the area on which you are seeking advice. Perhaps only 10% of the practice has been spent in that specific area. It would be prudent to have a benchmark of at least 50% of the practice time in the area of law of your need. An accountant who has had 15 years of experience in small business accounting and tax advice will certainly provide you with a depth of expertise about small business in general. If that accountant also has specialized experience in your industry, this is an additional factor that could assist you. Enquire about the degree of expertise and length of experience in the specific area. If you don’t ask the question, you won’t be given the answer that may make the difference between mediocre and in depth advice.

If you own a small business, you work very hard for your money. You want to make sure that you have used every legal means possible to save on tax, to enhance your after-tax net income.

Here are some tips to help you achieve that objective. In all examples given, make sure that you speak with a qualified professional advisor with expertise in the area. This could be a professional accountant (such as a CA or CGA) and in some cases, a lawyer as well. The comments given here are general guidelines only, and it is advised that you obtain current tax regulations and strategies.

Income-splitting
This is a classic way of saving on taxes. Basically, it means that you arrange your income to have it divided amongst other family members (spouse and/or children). That way, each of the individuals will be paying less taxes, because of lower marginal tax rates. The aggregate taxes paid will therefore be less than what you would pay if all the money went into your hands. Here are some examples:

Spousal RRSP
Remember that the deadline is the end of February . You want to try to reach the maximum of your “earned income” for RRSP calculation purposes. Rather than put the RRSP in your own name, you can put up to l00 per cent of your RRSP annual contribution into the name of your spouse (assuming that your spouse has less taxable income than you do). You take the tax deduction from your taxable income. The advantage of this arrangement is that when the time comes to collapse the RRSP (take out the funds), it will be taxed in the name of your spouse, who presumably is still in a lower tax bracket and will therefore pay less tax.

Corporate shares
By splitting your shares with your spouse and children, you can reduce the amount of tax paid in aggregate because the lower the income (from dividends) the lower the marginal tax rate. This point was covered above. For example, you could have 5l per cent of the shares, while your spouse and children share the remaining 49 per cent. You can deal with the issue of control by having Class A voting shares for yourself, and Class B non-voting shares for your spouse and children. You also want to have the right to buy back the shares at any time from the other shareholders at the original, or some other set share value. There are various formulas you can consider. You also want to get professional advice if your children are minors and don’t pay fair market value for their shares–their dividend income could be attributed back to the business owner for tax purposes.

Family trusts
If you set this arrangement up carefully, and there are several options, you can keep more tax-free money in the family unit. For example, if your spouse and children are holding shares in your company through the means of a family trust, and have no other family income, they could each receive up to approximately annually in dividend income totally tax-free. Sounds rather attractive doesn’t it? Normally, it is structured so that you hold Class A shares (voting) in your own name, while the Class B (non-voting) shares are held in the name of a family trust. This can be set up through the assistance of your lawyer and accountant. If you own an incorporated company that intends to pay or currently pays dividends to a spouse or children who are not actively involved in your business, ask your professional accountant, make sure you receive skilled tax advance.

When contemplating the purchase of a franchise, first you need to review your personal and business goals. How will a franchise benefit you in attaining your goals compared with starting a business from scratch? Are you motivated by the challenge of doing it all yourself? Or does that concept cause you more than a little worry and apprehension? Perhaps you have specialized skills which you would like to turn into a business operation, but all the peripheral aspects of starting a business are somewhat overwhelming and intimidating. If this is the case, then buying a franchise may be well suited to your personal and business needs. Some entrepreneurs prefer to have the security and support provided by a large and experienced company.

Statistically the survival rate of franchises is very high, especially home-based franchises. The reason tends to be because of the formalized and tested business plan and support systems offered by the franchisor including training, advertising and promotion, computer and/or other management and administrative systems, and ongoing monitoring of performance. At least 25% of franchises and distributorships are targeted to people who want to work from their homes.

Licensing is another option. It means having the right to distribute or manufacture a product within agreed-upon stipulations. The owner of the licence retains ownership of all product or service rights, then receives a royalty or fixed fee from the licensee.

Where to get further information
There are good and bad franchises and licenses, and any potential investor should be cautious. Check the reputation of the franchisor through the Canadian Franchise Association (CFA) (Toronto) and the Better Business Bureau. To obtain information about home-based franchises and licences, you should consult various publications, such as Canadian Business Franchise, Franchise Annual, The Franchise Yearbook, and other publications. Also check on line by doing a Google search.

The CFA has a kit of information available for prospective franchisees, including a booklet entitled Investigate before Investing.

Pros and cons of franchising
If you are a potential purchaser of a franchise, you have to evaluate a prospective franchise relationship by looking at both sides of the issue clearly.

Here are some of the advantages and disadvantages to the franchisee (the person buying the franchise from the franchisor).

The key benefits are:

being associated with an established company
having a proven and successful business system
having a reduced risk of failure
having an increased chance of profitability within the first few years
easier to access financing (banks, suppliers, franchisor)
having reduced costs of supplies and materials
having access to extensive advertising (national, regional, local)
having continuing managerial assistance

Here are some of the drawbacks: