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    8 Replies Latest reply on Jan 20, 2008 11:35 AM by MDF2008

    How do i evaluate this opportunity?

    WilsonLegacy Newbie
      I'm entering into a very unique opportunity and i'm not sure how to evaluate the opportunity in terms of compensation so i would like to know if any one has a suggestion for me. Here is the situation:

      A business partner and myself have been training at a retail food establishment. The establishment is a franchise that provides coffee, smoothies, food, and the like. The business employs 10-12 associates and will make anywhere from $350,00 to $1,000,000 in sales. We are training to assume complete managerial duties and operational tasks. we have not provided any start-up capital therefore our investment is purely time and experience. We each have associates degree's in business administration as well as a multitude of certificates in related feilds and 5+ years each in retail experience, which includes management. we are currently in the process of obtaining our bachelor's degrees as well.

      1) What type of compensation should we be asking for?

      2) What type of benefits and/or additional incentives should we be asking for?
        • Re: How do i evaluate this opportunity?
          Lighthouse24 Ranger

          I'd spot the salary range for managers in this type of business at around $31K - 55K per year depending on the company, the location, and your length of service. Paid vacation, medical, and profit sharing or stock options are Starbucks kinds of benefits -- nice if you can get them, but the majority of businesses like that would not offer all that. A 40-hour work week with no overtime is another SB deal, but a rarity for most retail or restaurant managers (especially ones with an ownership interest). Hopefully, this gives you something on which to base your negotiations. Good luck.
          1 of 1 people found this helpful
          • Re: How do i evaluate this opportunity?
            LUCKIEST Guide
            It does sound like you are entering into a very unique opportunity. tell us more.
            You use the word "business partner" Are you partners?? or a Corporation??
            Do you have a Business and Marketing Plan. Included in the plan would be cash flow and that is where
            Compensation and Benefits should be addressed. Do you have an Accountant.
            Under Members you list Jumpin Juice & Java. If the cash flow and operating statements project
            great numbers you can increase Comp and Benefits.
            Good luck, LUCKIEST
            1 of 1 people found this helpful
              • Re: How do i evaluate this opportunity?
                WilsonLegacy Newbie
                The business is being opened with capital from two owners of a current store. A colleague and i will be assuming the same position in a joint manner again with no capital contribution. There is a business and marketing plan but it was created by the two current owner's who have been selective thus far with infotmation they share. What we do know is that the store they operate pulled in $350,000 in sales in a small town environment and we're opening in a city three times that size both in population and net per capita income. My early feelings were that we would like to receive 15% of profits and no less than $25,000 to $30,000 in wages. What do you think?
                  • Re: How do i evaluate this opportunity?
                    LUCKIEST Guide
                    It sounds good tom me, Maybe the following will help, LUCKIEST

                    h3. 6 Steps to Small Business Success

                    1. Start Smart
                    2. Plan Ahead
                    3. Set up Systems
                    4. Seek out Sales
                    5. Aim for Growth
                    6. Leverage Opportunities

                     

                     


                    1. Start Smart.
                    Identify a niche. Don't compete to be the lowest cost provider. Look
                    for what makes your product or service unique and adds a special value
                    for the client and charge for that value. Every business has many
                    facets. Start with what you know and like; start a business that has
                    meaning to you. Keep in mind that we don't know what the future holds,
                    many of the jobs and businesses of tomorrow don't exist today. You can
                    create your own success.

                     


                    Now is the time to dream. To start smart, you should like the idea of
                    the business. The way to earn a good income and build wealth is by
                    serving clients well, making their life better in some way-it's more
                    than filling a need in the marketplace. To succeed you want to test the
                    idea to make sure your potential clients like the idea too. Test your
                    ideas.

                    2. Plan Ahead.
                    People often ask me why bother with a business plan? Look at the
                    lottery as an example. You may get lucky and get the winning ticket,
                    but the odds are against you when you rely on random chance. I'm a risk
                    taker...but not that much, minimize the risk of going into business and
                    maximize your potential for success. Take the time to write a plan of
                    how you get from point A to point B. A plan gives you a clear future
                    focus and increases your chances of success.

                     


                    The first rule of a start-up is put some of your own money in the
                    business. As the owner you must be willing to capitalize the business.
                    The second rule is put as little of your own money as possible in the
                    business. Prepare your plan and look for funding for your business from
                    multiple sources, which can include a business loan or business line of
                    credit.

                     


                    Don't go it alone. Plan ahead now to build your team. Your team may
                    include a CPA and an attorney that you work with as needed. Add a
                    mentor from your industry and get a SCORE mentor to help you plan for
                    success. No one has all the answers. You get more ideas and information
                    by building a success, support team that can help you plan ahead.

                    3. Set up Systems.
                    The most basic system every business should have is a good financial
                    system. Ask yourself how am I going to generate enough income to
                    support myself and my family. Begin here. Put together a personal
                    budget, so you know what it costs you to live. Now, you can move on to
                    the business budget and sales planning, so you can see how many sales
                    you need to break even and make a profit. The start-up expense plan,
                    operating budget and your accounting software are vital to your
                    success.

                     

                     

                    4. Seek out Sales.
                    The daunting question is how do you go about seeking out your first
                    sale. Recognize that since you don't have a big ad budget to be seen by
                    everyone, you need to target a niche and get connected in your market
                    community, be it local, regional or national. You need other people
                    selling for you-not employees-goodwill referrals. Get out and talk to
                    as many people as you can. Join organizations that would have clients
                    for your product or service. Become a visible part of your market, and
                    then ask for the sale. You begin the sales process with people that you
                    know. Yes, it's okay to start with friends and family as your first
                    customers, and then broaden from there.

                     

                     

                    5. Aim for Growth.
                    The basic tenant of creating a company is that you own the company. You
                    are not just creating a job for yourself. It's less risk and less
                    investment to get a job. Building a business is creating a company that
                    is more than the job itself. Think about the future. How large do you
                    want the company to be in terms of sales, net profit and employees?
                    Your answer to each of these questions will influence how you grow.
                    There are varying costs and profits associated with growth. It's
                    important to make a deliberate choice early about how you want to grow
                    your company.

                     


                    6. Leverage Opportunities.
                    Good luck. Good fortune. Good timing. All play a part in business. As a
                    business owner, be very clear about your core focus for the business
                    and how it serves clients. Your core business is what pays the bills.
                    Then, as an entrepreneur you are about opportunity. When you see a
                    potential opportunity or stroke of luck measure it against your core
                    business focus. Good fortune is great, when it matches your vision for
                    the business. Always consider if a good opportunity is the right fit
                    for your business. If something looks great, but it's not in sync with
                    your long-term plan and budget, think carefully before committing your
                    company's resources.
                • Re: How do i evaluate this opportunity?
                  DomainDiva Ranger
                  I am looking at the projected sales numbers 350,000 - 1M. That is a huge spread.

                  Besides the good advice on salary and benefits would there be any considerations for a bonus for increasing revenue? For coming up with an inventive marketing scheme?
                    • Re: How do i evaluate this opportunity?
                      WilsonLegacy Newbie
                      Any type of bonus is something that i'm, at this stage in my career, still very unfamiliar with. To this point i have been experience mining and typically have been hourly. My goal for posing this question is to hopefully find a package that i feel comfortable with presenting to the owners when we sit down to discuss compensation in about ten days. The reason for the large spread is because we havn't had access to as much of the information as we need to this point. When we begin negotiations all of that data will become transparent to us. It is indeed an extremely unique opportunity and i esnure everyone that my colleague and i also have back-up plans if we feel that we aren't being treated apropriately.
                    • Re: How do i evaluate this opportunity?
                      MDF2008 Wayfarer

                      Keep this simple.
                      1. Do you have a business plan completed? If no you need to do that first.
                      2. What do you and your partner want? Write it down and agree and sign.
                      3. Ask the other two owners what they would like to see. Then make a counter offer
                      on what you and your partner want to make it all happen.
                      4. Request a buy out at some point in time from the two owners; becuase you store
                      will turn bigger numbers.
                      5. Scaled numbers are needed based on the location.
                      6. Manage the risk factors and list them with your partner.
                      Like you said they are just offing the dollars not running the operation.
                      Management operations is key......there is alway money available.
                      So how good are you and your partner in making a $ ROI for the operation.
                      7. Ask for other locations options and first right of refusal too.
                      Best of Luck 2008.