Tips for Entrepreneurs: California’s big secret

Some techniques to help cut down on many of those hard-to-find tidbits that make starting or reinventing a business much easier.

Book 521 (photo credit: Courtesy)
Book 521
(photo credit: Courtesy)
When was the last time someone told you something in an offhand, casual way that made you groan, “Now you tell me?” Chances are you spent weeks or months learning that information on your own. It happens to all of us if we live long enough.
Starting any new endeavor can be difficult for many reasons, but the most challenging for most of us is simply learning the ropes. Even if you’re already in business and simply want to change directions, there are things to learn.
In this column, I want to give you some resources and techniques that will help you cut down on, and possibly even eliminate, many of those hard-to-find tidbits that make starting or reinventing a business much easier.
Here goes: Your competitors don’t want you to have information that will make it easier for you to compete with them. That doesn’t mean the information isn’t out there, or that it is hard to find. It’s not, when you know where to look. So let me share three powerful strategies that will help you find the information you seek without investing all your time, energy and money in acquiring it: Let’s use a pizza store as a metaphor. You are the supplier of pie cutters and metal pizza pans. If you supply the corner pizzeria with pie cutters and metal pizza pans, unless they are part of a franchise, it’s unlikely that they’re going to introduce you to other pizza stores that might be competing with them for well-cut, well-baked pan pizza.
However, you are not the only supplier this pizza store owner has. He also works with another supplier; the guy who sells him cheese. And that cheese supplier, I’d bet, has a long list of other pizza stores that he sells supplies to. They are prospects you can be introduced to without any fear of competition.
• Tip No. 1: Don’t ask the competition for direct information about their competitors.
If you want information about their competition, go to the press page on their website. It’s likely that media articles that mention the company mention others in the industry as well.
Those are the companies you want to talk to for insight.
One of my clients is in the travel business. When they looked into launching a travel site on their own, finding out who was “the supplier behind the suppliers” was proving difficult. But once we got some information from a vendor website that said, “We integrate with the following vendor’s back-end systems” and followed that list, it was as simple as calling those same vendors and saying, “Hi, what software platforms integrate with your system?” Bada bing! More valuable information then we could have imagined poured forth.
• Tip No. 2: UFOC.
What is UFOC? Uniform Franchise Offering Circular, of course! What that means in layman’s terms is that when a company wants to sell a franchise, they need to have an offering plan. An offering plan is similar to the information provided when a public, or soon to be public, company goes out to raise funds from private investors.
This plan outlines all the potential of the company – but it also mentions all the different downsides or risks that you could lose your money on if you invest. So why does this matter to you if you’re not investing or buying that company? When researching any business, even if you aren’t planning to open a McDonald’s, reading the UFOCs of McDonald’s and other, similar businesses would be helpful and eye opening if you want to know why they have made the decisions they have. Their decisions and the resulting outcomes can help you educate yourself for free before you jump in and make the same or similar mistakes.
You get to learn from their mistakes without paying the tuition in the school of life they had to pay. You essentially leverage the millions they’ve spent learning expensive lessons.
When I was reading the offering circular of one of the major hotel brands, I learned a tremendous amount about different brands, or “flags” as they are known in industry lingo. They also provided (gasp!) a list with contact information! On that list were people who had been franchisees of that hotel brand in the past.
Some of them had entered litigation with that company. Imagine how much insight you could get from someone with a history like that – someone who had actual experience in the very thing you were looking into! Some companies will give their UFOCs to you just for asking.
Others, that realize the value of the information, will make you jump though hoops to get them. There are ways to get around the hoops by paying companies online for instant access. But for my loyal readers there’s an even better way, and I’m willing to share it with you, just as I share it with my clients during a strategy consultation. I’ll tell you something valuable and little known.
The State of California requires that every franchise being offered in California submit a copy of their UFOC to a certain division in the state. No exceptions. And that one resource is available instantly to anyone with an Internet connection. It’s a way to get most UFOCs you might need absolutely free. Now you can find the flags in your own business or in the business of your competitors.
How do I know they are called flags, something that impresses people in that industry that I deal with in business? The UFOC of course.
And that brings me to my final and unadvertised fourth tip.
• Tip 3: Know the jargon.
Knowing the jargon slang or buzz words of an industry helps keep you from looking like a newbie when you’re first starting out. It’s okay to be new, but you can keep from being taken advantage of if you at least sound like you know the industry. You wouldn’t show up at a soccer game talking about “making a home run” when you score a point. Learn the language of the business. It will allow you to learn even more than you thought possible.
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Issamar Ginzberg is a rabbi, businessman, public speaker and marketer.