Which Makes More Sense? Buying an Ad or PR Efforts to Support Your Franchise?

With many franchise opportunities, the responsibilities of marketing your small business are spelled out in your contract—often step-by-step. In some cases, you may be required to make routine marketing spends in your particular territory. Others may require you to utilize in-house corporate capabilities, ranging from design and print production services to shared media outreach utilities. However, unless your franchise agreement has a specific clause preventing you from marketing above and beyond your required regulations, you would do well to consider the question of ad purchases versus a public relations effort to boost your bottom line sales.

Now, when we’re talking about buying an ad, we clearly don’t mean the type you see on television during prime-time viewing hours, often which, once tallied for cost, can reach into the millions of dollars. Rather, we encourage you to look locally and frugally at all of the advertising options in your particular area. A good place to start is your local newspaper. For instance, if you happen to have purchased an automotive repair franchise, the sports section of your daily newspaper is an excellent place to investigate the purchase of an ad. Many newspaper bureaus even have in-house assistance for creating your ad. Plus, many franchises will have an advertising kit from which you can select appropriate creative (ads) that you can use in your local market.

In addition, online advertising has become so fragmented (in a good way) and inexpensive (even better), it practically begs for further investigation. Did you know that you can even advertise on Facebook for as little as you wish? You can literally create your own budget cap! Don’t be afraid to see what’s possible.

Since we’re still talking local, you may not even know how cheaply you can advertise your services on local radio stations until you contact their sales department and ask for a rate sheet. Local radio advertising is an extremely competitive business and stations are constantly coming up with ways to engage both the listener AND their advertisers. Here’s a quick tip—with the beginning of the school year here, you would do well to inquire about advertising during local high school football game broadcasts. You may be pleasantly surprised at not only the reach of your message, but the amount of local people tuning in!

Now it’s time to look at the other side of the coin. Public relations—or media outreach–is advertising’s good-looking cousin. At least according to a consistent amount of surveys which point out that a clever public relations campaign is rated three times more “trustworthy” than advertising efforts. Perhaps it’s the surreptitiousness in the effort, but advertising is designed to build awareness—while public relations builds credibility. A well-placed story in your local business section can do wonders for the walk-in traffic of your business location. And we’ve seen them all before, haven’t we? Picture two owners (maybe even a husband and wife team) standing back-to-back and facing the camera, front door of the business in the background and a catchy title: “How Mr. & Mrs. Smith Turned Their Small Dream Into a Retail Reality” (let’s assume it’s a sandwich shop).

But let the buyer beware! Public relations can be a costly investment. A cursory glance at your local roster of media outreach firms may reveal an expensive proposition. In fact, there are many professional public relations firms that will be happy to tout their success in getting you publicity. But unless you have $5,000 a month for their “retainer” fee, you won’t even get to first base.
By the same token, avoid the super-cheap, unscrupulous PR guy. There are clearly two ends to this spectrum—and you don’t want to be on either of them. Simply do your research. Make some calls. Get out, introduce yourself and see if you can’t find a reasonable fit for what you are looking for in a public relations firm.

Finding ways to boost your profile, your reach and gain an audience of future customers is something to be taken very seriously in franchising. With all reputable franchise opportunities, the bulk of these efforts will probably be spelled out for you in your contract. But if you care to go slightly above and beyond in the interest of achieving the success you desire, approach these bonus opportunities with extreme care and caution. In a nutshell, keep using the same amount of common sense that has gotten you to this point — and you’ll do just fine.

Do you feel that you’re ready to get started? If this article has inspired you to investigate a franchise opportunity, perhaps it’s time for a free consultation with a qualified and experienced franchise consultant. As it turns out, FranNet is just the place! As a franchise consultant company with a great track record of assisting individuals on their path to business ownership, make arrangements to speak with one of our representatives today.

An In-Depth Look at the Self-Directed 401K Option for Franchise Funding

Many potential franchisees, as they get further into the actual prospect of owning their own business, end up expressing surprise at the myriad of avenues available to them with regard to funding their franchise opportunity. Some have a healthy nest-egg of their own waiting in the wings, while others may rely on traditional bank loans. The United States Small Business Association (SBA) keeps a handy amount of information on hand for advising future owners of their options. But, today, we’re going to focus on an intriguing method of financing that is growing in popularity—the Self-Directed 401K option.

So, what exactly is a Self-Directed 401K option and how does it lead to necessary capital for financing a franchise? We’re glad you asked!

First and foremost, the Self-Directed 401K is meant to take advantage of pre-tax investing—in this case, the investment for funding your potential franchise. Please note that “investing” in this case is much different than “withdrawing”, per the definitions. Simply put, when you “invest” your hard-earned retirement funds into the stock of your new company, you won’t incur penalties for the use of your money. They continue to stay deferred until you retire—as originally planned in most cases.

Also in this case, the “investing” you do on behalf of your business is different than a loan. There are no monthly payments or penalties and your taxes are deferred, leaving you to potentially begin your entrepreneurship debt-free. Avoidance of traditional taxation is another key benefit of the Self-Directed 401K plan. Because this is your business and you are the employer, you will receive the same retirement benefits afforded to a corporation. Matching funds programs ensure that you can equal your contributions paid to the company. These matching dollars are tax deferred up to the allowable limits, so make sure you do your research in this particular area.

The Self-Directed 401K option also includes a nifty perk if you ever intend to sell your business—and many potential franchisees get into the industry with this idea in place for their future. If you have funded your business with the Self-Directed 401K plan, your personal retirement plan owns the actual stock in your company. And thus, the proceeds from a sale can be returned to your retirement account—tax deferred again!

As with any financial plan outline, it is best to seek the advice of a qualified and licensed financial planner or a certified accountant. Laws on taxation may vary from state to state and you’ll want to make sure you are as informed as possible about the risks and rewards of a Self-Directed 401K option. There are both pros and cons to utilizing this financing method to power up your own new business and it may not be suitable for everyone. However, this option is gaining in popularity for those who fit the profile and have the means to take advantage of its benefits.

In summation, the Self-Directed 401K option may be a good fit to help you launch the business of your dreams—through its creation and on to its possible future sale. Franchise funding can sometimes be a complicated field to navigate; however, your qualified FranNet representative should be able to offer valuable insight on this and the many other financing options available to you. As always, we recommend you do your due diligence in discovering whether or not this particular funding exercise makes sense for you and the others set to benefit from your personal franchise ownership journey.

Do you feel that you’re ready to get started? If this article has inspired you to investigate a franchise opportunity, perhaps it’s time for a free consultation with a qualified and experienced franchise consultant. As it turns out, FranNet is just the place! As a franchise consultant company with a great track record of assisting individuals on their path to business ownership, make arrangements to speak with one of our representatives today.