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A common question that many visitors to Franchise Direct ask themselves as they consider taking the plunge and purchasing a franchise is: do I have the personality to be a successful franchisee?

For many, it’s a ‘chicken or the egg’ question. You won’t really know if you will be  successful at running your own franchise until you actually purchase one. And, even though you will be investing in a proven business plan, much of your businesses success will depend on our ability to become its catalyst.

Franchise Direct’s CEO Sean McGarry weighed in with his feelings on what makes a successful entrepreneur in a recent edition of the Business Insights video series.

Interestingly, some analysts feel that many of the traits people attribute to successful business people can be counter-productive for entrepreneurs. Thus, career coach Dr. Steven Berglas recently introduced the world to the Humpty-Dumpty entrepreneur, a business person who’s destined to failure.

Dr Berglas identifies the following two traits to identify Humpty-Dumpty entrepreneurs:

Workaholism: The desire to work ceaselessly might be a prerequisiti for some bosses, but Dr Berglas considers it a failing in entrepreneurs. He feels people who are solely driven by their work 365 days a year do so to purposely evade social contact, and the best entrepreneurs that he knows are all ‘affable charmers’. Successful entrepreneurs, it seems, also have the ability to switch off and enjoy life outside of work.

Narcissism: Dr Berglas feels that all entrepreneur should possess some sense of humility, and small-business owners driven by a sense of their own greatness are doomed for disaster.

Dr Berglas also worries for “the person who thinks, ‘I made a fortune in my previous career and now I want to buy a fledgling business so I can run the show.’”

The most important thing to do before investing in a franchise, it seems, is to take a long, hard look at yourself and try to understand what’s driving your ambitions to becoming an entrepreneur. Your ability to work with others, as well as to lead, will determine your future franchise success.

Franchise Direct CEO Sean McGarry has previously discussed entrepreneurship and ways to identify business opportunities. Now that you’ve got your business idea, you’ll need financing to get your business off the ground.  Sit back and listen to Sean’s tips to getting funding.

Download Business Insights #3 or view in the player below.

“Every idea in business, whether they are big ideas or small ideas, needs funding of some sort. And in the present environment, the entrepreneur has never faced a more difficult time in terms of getting banks to finance small businesses,” Sean says.

Sean tells aspiring franchisees to diversify when seeking funding.

“Don’t limit yourself to one financial institution. One banker may have had a bad experience with your particular idea in the past and may be biased. Make a point of visiting maybe three to four different institutions,” he says.

When the time comes to sit down with a financial institution, be sure you have a clear idea of how to explain your business.

“I mentioned the importance of being patient. Make sure you’re able to clearly put forward the idea of the business and always bear in mind that the banker will always want to get down the figures. You’ve got to clearly set out how much money you need.”

When discussing your business idea with banks, it’s very important to be able to separate the financing you’re seeking.

“You can divide that money out in two ways. One can be for the fixed assets- perhaps pieces of equipment or machinery or furniture. These are assets that are tangible and easily identifiable. More difficult is the area of the working capital, the day to day funding that you might need to keep the business running. These two areas coming together will make up the funding of the business.

“The critical thing for the bankers is going to be: ‘you need X amount of money, how do you pay it back?’ It’s what we call repayment capacity. You need to be able to clearly demonstrate that to the banker. Another thing is to match the funding to the life of the particular asset. If you’re buying something that has a life span of say, three years, it’s no use looking for funding for that for a 10 or 20 year period.”

Sean also reminds entrepreneurs that franchising continues to remain a solid investment in the economic times.

“One of the areas where people can find funding at the moment is the franchise sector. That’s because a large number of franchises have a very close association to particular funding organizations or indeed can help in the funding itself.”

In summation, Sean urges entrepreneurs not to despair. Banks still need to lend money to make profit. Follow his tips and you might improve your chances of getting your business off the ground.

In summary: in going out and looking for money at the moment, make sure that you’re clear in the amount that you’re asking for, make sure you have a clearly set-out cash flow which demonstrates your repayment capacity.

“And always remember that even in times like today, banks have to lend to people like you. That’s how they make their profit.”

Drop in next week where Sean will describe how to bring equity into your own business.

For all of the talk about the economic meltdown, many franchisors are still successful and  currently eyeing new opportunities. For the truly ambitious franchisor, an international leap remains a tantalizing, and potentially lucrative, challenge.

An interesting article in the latest issue of Franchise Times recounts the discussions that took place at the Faegre & Benson International Summit in the  Twin Cities late last year. Many of the pertinent aspects of bringing a franchis outside America were talked about, and they’re worth a second look.

The first thing franchisors eyeing an international move should keep in mind is that such a big endeavor should not be used to mask business problems at home.

“International won’t fix domestic problems or generate enough cash,” warned Kay Ainsley, partner with Michael Seid & Associates (MSA). “That one-time fee goes to the bottom line (just) one year.”

Equally, patience in an international launch may bring its own rewards.

“When I was with Domino’s, we’d let Pizza Hut go in first and educate people about what pizza is and then we’d go in and say, ‘we deliver,’” she said.

The article points out these other questions that franchisors must ask themselves before opening foreign branches:

• Is there a demand for the product?
• Can the ingredients be sourced locally?
• What will it cost to go there?
• What will the market look like?
• Do you want company units?

Also worth considering are subtle culture differences that may make the difference in your company’s success. Mo Sawda of Buffalo Wild Wings described a moral problem his company faced when it eyed expansion in Saudi Arabia. The Middle Eastern country bans females from eating in restaurants, but the Buffalo Wild Wings president is a woman. What’s a franchisor to do? It’s likely foreign franchising will throw up similar conundrums when you plan to expand.

The overarching sentinment from the summit seems to be that international franchising, if done properly, can be profitable and fulfilling. Franchisors, though, are strongly urged to do as much homework as possible before making the leap outside of North America. It’s a big world out there, and educating yourself is the only way to guarantee your future success.

These days, everyone in franchising seems to have a few ideas about which businesses will thrive during the recession and which will falter.

We’ve certainly posted our ideas in the past for franchisees considering franchises for sale. Now Entrepreneur magazine has weighed in with their choices for recession-proof franchise industries. Some of their choices are predictable, others are new.

Have a read of them and make up your own mind. One bold selection from the writers: frozen yogurt.

“Thanks to a growing number of people who are conscious about healthier lifestyles but don’t want to sacrifice trends and tastes, we have seen a large demand for frozen yogurt,”  says Caroline Yi, franchise coordinator.

It’s an interesting choice. Franchise Direct has a few frozen yogurt and ice cream franchise opportunities if you’re interested.

Yesterday we blogged about how an Obama presidency might affect franchising and small businesspeople. It’s time to get to know a person who will have a large say on this administration’s policy towards franchises and small business: Karen Gordon Mills, the new head of the Small Business Association.

Ms Mills, who is yet to be approved for the position, is a Harvard MBA with Chicago roots and is currently president of the MMT Group, a Maine-based private equity firm. In a recent Businessweek profile, staff writer Jeremy Quittner pointed to Ms Mills’s experience as a co-founder of Solera Capital with two other women partners as a sign that her role with the SBA with will encourage female entrepreneurs.

“I think she will serve very well in regard to women,” Maine Governor John Baldacci told Businessweek, which is good news for females considering franchise opportunities at the moment.

Many analysts feel that the SBA floundered during the Bush years, and there is hope that Ms Mills will be able defend the rights of small businesspeople, franchisees, and franchisors as President Obama tries to figure out how to stimulate the economy.

“America’s spirit of entrepreneurship is one of our greatest assets, as we compete in the global economy,” Ms Mills said in December.

At least we know her heart is the right place.