Business Information for Entrepreneurs by an Entrepreneur

The number of home-based businesses is on the rise. 2009 has seen a sharp increase in entrepreneurship, and 2010 looks to be an even bigger year for new entrepreneurs. Interestingly, the largest segment of these numbers is in the category of “lipstick entrepreneur.”

Who is the lipstick entrepreneur? No, it’s not those who sell fashion makeup from home. Rather, it is the term coined for the growing number of independent businesswomen.

Booming Numbers of Female-Owned Companies

The numbers of women entrepreneurs have risen sharply in the last few years. According to a report by The Future Laboratory, a leading European trend forecasting firm, there has been significant growth in women-owned businesses over the last 12 month period. More than 1 million women are solo entrepreneurs in the UK, and the report expects that trend to double by the next decade.

In the US, the new book by Michael J. Silverstein and Kate Sayre, Women Want More, states that the number of women-owned businesses are expanding at twice the rate of those started by male entrepreneurs. These numbers point to the trend that not only are women starting businesses to help meet expenses, but they are seeing an available place in the general market that have been left by male entrepreneurs.

Raising Kids and Making Money

The old paradigm of women staying home simply to take care of the children is long gone. Rather than just give up working completely when they decide to have kids, women have started forming home businesses to continue working for themselves while they remain home with the young ones. Whether it is part time or full time, women entrepreneurs are finding that they can have a job and raise kids too.

Whether it is to break the proverbial glass ceiling, or just prove that they can make a difference at home, women-owned businesses are definitely the trend setter in home-based opportunities. Look for these numbers to rise in the next few years, and for the lipstick entrepreneurs to become a monumental part of business in America during the next decade.

Cold Stone Creamery has grown to become a popular franchise, but one that has seen its share of ups and downs. With a top ranking of #14 in 2007, it dropped to #90 in 2008, but has risen back to #35 in 2010, according to Entrepreneur Magazine’s annual reports.

Interestingly, what captures our attention is the drop in the number of Cold Stone Creamery franchises. In 2008, Cold Stone had a peak of 1,394 stores, but in one year, saw a drop down to 1,221 in 2009. From the Cold Stone Creamery in Santa Ana, California to the location in Fenton, Michigan, these delicious stores have shuttered their doors. Why has this popular brand of ice cream dwindled?

The Ravages of the Economy

By and large, the most common factor is the economy. Cold Stone Creamery offers delicious frozen products and “the ultimate ice cream experience,” but it does so at a price. For over 20 years, Cold Stone has offered creative and unique ice cream products using only the highest quality ingredients and a “signature process.” What customers enjoy is a great-tasting product that is priced at expendable income levels.

With the economy slump beginning in 2007, many people have simply stopped paying for luxury items such as the Cold Stone process ice cream. Ice cream can be bought much cheaper in the grocery store or at other locations.

High Overhead

In addition, many of the new Cold Stone locations opened at the height of the real estate boom with overinflated rents. When the market imploded and rents dropped to more reasonable levels, many new franchise owners were stuck in a long-term lease that they simply could not afford.

Heated Competition

Another reason Cold Stone numbers are dwindling could also be increased competition. Dairy Queen has been a long-term staple that offers reasonable priced ice cream products similar to the Cold Stone process. Why would consumers pay more for Cold Stone when they can go down the street and to Dairy Queen for a cheaper and similar product, or find a cheaper and healthier frozen yogurt alternative such as Pinkberry?

It is true that consumers still like their ice cream, and many consumers are loyal to their brands, especially when it comes to Cold Stone. However, Cold Stone will need to see better management of locations and competition to see them become a favored franchise once again.

From tutoring centers to fast food outlets, the types of available franchises can be dizzying. There are hundreds, even thousands, of potential franchise opportunities, each with their own strengths and weaknesses.

Which are the franchises that continue to lead the pack? According to Entrepreneur Magazine, who has just completed their annual ranking of the top 500 franchises, here is a look at the top five franchises that you might see in 2010.

Subway

Subway has been in existence since 1965, and it has offered franchise opportunities since 1974. There are currently 22,525 franchise locations in America and almost 9,000 in foreign markets worldwide. Costs for starting a Subway franchise can be anywhere between $85,000 and $260,000, and the franchising fee can be financed. Subway has been the top-ranked franchise for the last five years.

McDonald’s

Since 1955, McDonald’s has offered successful franchise opportunities with a streamlined business model and process, as well as obvious worldwide branding. In 2009, there were over 12,000 American franchises and over 13,000 franchises around the world.

While McDonald’s is still seeking additional franchises, expect to have plenty of capital available if you wish to start one. Typical startup costs are about $1 to $2 million for a single store with no in-house financing available.

7-Eleven

7-Eleven Inc was founded in 1927 in Dallas, Texas and began franchising in 1964. Today 7-Eleven has over 30,000 stores worldwide, with 6,378 in the U.S in 2009. Franchisers must have a net worth of at least $127,000, and depending on whether the store is rented or newly constructed, startup costs can range from about $40,000 to $775,000.

Hampton Inn & Suites

Hampton Inns started in Tennessee in 1984 and found a niche with their affordable 2-room suites. Franchises in the U.S. total 1,595 in 2009. Although there are no net-worth qualifications, an entrepreneur must still have industry or general business experience, as well as $3.7 to $13 million for startup costs.

Supercuts

Supercuts have offered quality, streamlined hair salon services since 1975 and franchise opportunities since 1979. Its popularity continues to grow with over 1,000 units in the U.S. in 2009. Although this appears to be a seemingly simply retail franchise, expect to have $300,000 in net worth with high liquidity, as well as an ability to invest in startup costs of $111,000 to $240,000.

The one common trait of the top five franchises ranked by Entrepreneur is that they have all stood the test of time, generating revenues for decades. While their proven track record may translate into higher franchise fees, these top five franchises are also more likely to prove profitable for you in the long-term.