5 reasons why setting up a business in a recession is a good idea - http://smallbusiness.co.uk

5 reasons why setting up a business in a recession is a good idea - http://smallbusiness.co.uk

5 reasons why setting up a business in a recession is a good idea - http://smallbusiness.co.uk

Posted: 16 Sep 2020 12:00 AM PDT

 Start my own business written across inside pages of notebook, business recession concept

Think different: a recession can be just as much an opportunity as a threat

The impact of coronavirus has wreaked havoc on business and economies around the world. In the UK, we are now in the deepest recession since records began and the World Bank expects a global economic contraction of 5.2 per cent in 2020.

As many longstanding businesses fold and high street names fall into administration, it can be a daunting time to consider starting a new venture.

5 reasons why setting up a business in a recession is a good idea

However, a recession can also provide a fledgling business with great opportunities.

#1 – Finding gaps in the market

Often during periods of uncertainty, we find there are problems and issues which need addressing now. We saw how many companies responded to the need for protective equipment, including masks and hand sanitiser over recent months and used this compelling consumer demand to grow their businesses.

As we continue to navigate our way around this "new normal", gaps in the market will start to come to the surface. If you can identify those gaps and act to fill them, it may give you a strong head start.

>See also: 5 best ideas to start a small business post coronavirus

#2 – An agile and nimble business

As a new business with relatively small outgoings and limited financial overheads, you may have more flexibility than your competitors. If you operate online, rather than having a physical office location, and the cost which comes with that, then you may already be in a stronger, more agile position than others.

Many firms and consumers are looking at reducing expenditure during a recession so if your product or service can save them money and is equal to – or better than – what they had previously, you stand a good chance of attracting their business.

It's crucial that you have a solid grasp of what your competitors are doing and charging. How can you differentiate yourself from the crowd? You should also look at doing some break-even analysis and work out your profitability margins to ensure you have the ability to tweak prices as and when needed.

#3 – Take advantage of a deep talent pool

As we've seen here in the UK, the coronavirus epidemic has had a profound impact on people's jobs. As many companies wean themselves off the government's furlough scheme, redundancies and lay-offs will be a persistent issue. This means there is an abundance of talent ready and waiting for that next opportunity and eager to help take your business to the next level. If you know you have to make some key strategic hires in order to realise your business ambitions, now is a great time to do so.

#4 – Innovation is key

One of the common traits of some of the most successful small businesses is their ability to innovate. Those businesses with collaboration and creativity at the heart of their cultures can generate new ideas that deliver improvements in product and process and ultimately fuel their growth. We only need to look back at the last recession to find businesses that used innovation to their advantage. Uber and WhatsApp both began trading in 2009 and look at where they are now.

#5 – Business resilience

Finally, getting your company started during a recession is a sure-fire way to building a more resilient, lean and efficient business. Habits learned during a recession often stay in place through more prosperous times, helping to create a robust business much more capable of navigating future bumps in the road.

>See also: Start a New Business – setting up your business

4 legal steps you have to take

So, you've decided to take the plunge and make the most of your entrepreneurial spirit but starting a new business can seem like a logistical nightmare with a seemingly never-ending list of tasks to complete, but it doesn't have to be.

It's worth thinking about the legal steps you need to consider to make sure your business starts off on the best possible footing.

Here are four areas to get started:

#1 – Consider the structure of the business

Whether you're a limited company, a sole trader, a partnership or LLP, your new business can be set up in several different ways. Consider the best structure for your business now and in the long term.

#2 – Prepare your terms of business

This is essentially the contract between you and your customer. Terms of business are important for determining what your business is required to provide, ensuring that your business gets paid and for limiting your business's liability if things go wrong.

#3 – Support for any employee

If you've taken people on to help grow your business, it's important to have an employee statement of terms in place so that both parties know their obligations. A company handbook sets out various policies and good practice which – if followed by you and your staff – should limit any potential claims brought against the company.

#4 – Get insurance cover

If something unexpected happens in your business and you're not insured there's both a financial and a legal implication: you could be committing an offence and face penalties. So, ensure you have adequate insurance which covers professional indemnity, employer liability, building and contents cover, fleet insurance for vehicles used on business, and credit insurance to protect against non-payment. It's worth seeking out an insurance broker to assist you with this.

Louise Hebborn is a partner and specialist in commercial law at Stephensons Solicitors

Further reading

Start a New Business – getting your business going

7 Bagel Franchise Businesses to Consider - Small Business Trends

Posted: 04 Oct 2020 09:00 AM PDT

Bagels have a long history in the United States. They've been around since the late 19th century when Eastern European immigrants arrived in New York City. Today, it's a multibillion-dollar industry.

New York City remains the bagel capital of the country. The majority of franchise opportunities started in New York before spreading to other states. The food franchises are well known by both locals and visitors.

As an industry category, bagel franchises are often lumped in with donut franchises but for purposes of the list below, we separated them.

Bagel Franchise Opportunities

Here are the best bagel franchise businesses for aspiring entrepreneurs to consider:

1. Einstein Bros. Bagels

The Einstein Bros. Bagels franchise may be the largest, with more than 300 franchises in 27 states. The Einstein Bagel franchise also includes made-to-order sandwiches and extravagant desserts.

As with others in the bagel business. specialty coffee is a mainstay of the menu. Einstein's is called Darn Good Coffee (because it is). Einstein also offers catering.

This food franchise is looking to expand. The franchise fee is $35,000.

2. Manhattan Bagel

This bagel business is also owned by the Einstein Bros. Bagels parent company. The franchise opportunity includes locations in New York, New Jersey, Pennsylvania and Delaware.

Manhattan Bagel specializes in the traditional NYC bagel, with "boil and bake" style preparation. The business also offers specialty sandwiches.

Manhattan has been offering franchise opportunities since 1987. The franchise fee is $25,000.

3. Big Apple Bagels

No mention of Big Apple Bagels is complete with the inclusion of My Favorite Muffin, which is part of the menu offerings. Big Apple keeps the food franchise offerings varied with specialty sandwiches and salads.

Compliment any menu choice with the Big Apple signature Brewster's brand coffee. The franchise fee is $25,000.

4. NYC Bagel and Sandwich Shop

Since 1995, the NYC Bagel and Sandwich Shop has been offering franchise opportunities in the New York and New Jersey areas.

The signature touch of the NYC Bagel and Sandwich Shop business is in the preparation. The bagels are made, then left to ferment for 12 hours. After the 12 hours have passed, the bagel is boiled.

A NYC Bagel and Sandwich Shop franchise opportunity is available in those base states, and the business is likely to expand. As many of the franchises do – and it's obvious in the name – the fare includes a sandwich shop.

The NYC Bagel and Sandwich Shop franchise fee is $29,500.

Related: Sandwich Franchises

5. Brooklyn Water Bagel

You may wonder – why is Water in the name of this business? That's because the ingredients include special, proprietary water. Brooklyn Water Bagel uses an old-world recipe.

The business has been franchising since 2011, with a franchise fee of $35,000.

6. Shmagel's

Shmagel's is hugely popular with residents and visitors to Ocean City, Maryland. There are two Shmagel's in Ocean City, and the company is seeking to expand.

Shmagel's is advertising that the company is actively seeking to expand.

7. Between Rounds

Between Rounds is a bakery cafe and bagel shop. The company launched in Connecticut in 1992.

Between Rounds is known for the modern, comfortable interior of its shops, and also for offering drive-thru services. Like Shmagel's, Between Rounds is seeking to expand.

The franchise fee ranges from $22,500 to $25,000.

How Much Does a Bagel Franchise Cost?

The franchise fee is typically from $25,000 to $35,000. Although that is affordable, the cost of the initial investment can range from $200,000 to $800,000. The investment includes brick and mortar, purchase of real estate and equipment, purchase of inventory and more.

The NYC Bagel and Sandwich Shop has one of the lowest startup costs at $120,000. But this is a base cost in the industry, with many other factors at play.

Are bagel shops for sale? Yes. There are business opportunities to purchase already-established franchises. For an additional investment, the franchisee may purchase a multi-unit business.

Are bagel shops profitable?

Franchisors require that an applicant have a significant net worth, typically from $500,000 to $800,000. Bagel franchises are plums in the franchise world, and franchisors want to make sure they are connecting with the best owners.

The best owners are the ones who already have proven their ability to make money. That is proven by their net worth. Although the start-up costs are high, the return on investment for that type of franchise is also high.

How much does a bagel shop make a year?

Let's say you put up $300,000 in total cost including the franchise fee, to open the business. You should be able to make that back in two years.

BUT, it's all about location. How can you make money selling a $2 product? That depends on the number of customers you sell it to, in a day, week, month and year. If you don't open in a good location, simply put, you're not going to make money.

From 2002 to 2016, revenues for coffee and snack shops doubled. Things were booming. The businesses that adapted to a changing market remained profitable. Those businesses offered Vegan, nut-free and gluten-free choices.

Why choose a bagel franchise?

There's a whole lot to love about a bagel franchise.

For someone interested in buying a franchise in the restaurant industry, the bagel franchise offers a great place to start. Here are some reasons why:

  • The menu is simpler, in comparison to a typical restaurant. Most businesses in the bagel franchise industry also include a sandwich shop with a varied menu.
  • The store hours are better. Most franchises close by 3 p.m. daily. That's because they typically offer breakfast and lunch only, with lunch being offerings from a typical sandwich shop. Some advertise the additional offerings in the business name, such as the NYC Bagel and Sandwich Shop.
  • You won't need as many employees, most often from 7 to 12. The dining atmosphere is casual and friendly.
  • Inventive creativity is possible, not just the common NYC bagel. Why, what about the Chorizo Sunrise? That's Chorizo sausage, avocado, pepper jack cheese with a jalapeno salsa smear, on a green chili gourmet bagel. (You can get that at Einstein Brothers Bagels.) Bagel choices have come a long way since the standard NYC bagel.

The varieties are endless. Also endless are the opportunities for creative twists on the historic NYC bagel. The tasty doughy circle was everybody's favorite quick, light meal. It wasn't long before franchises like the NYC Bagel and Sandwich Shop took things to the next level. To the original tasty treat, they added sandwiches, specialty coffee, gourmet coffees, and more.

Image: Depositphotos.com


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