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	Need a speaker for your next event? Contact Steve! He is one of the world's leading business experts, a popular speaker on the business lecture circuit, and is sure to leave any audience thrilled. A columnist for USA TODAY, lawyer, and author, his latest book is The Small Business Bible: Everything You Need to Know to Succeed in Your Small Business. You can sign up today for his free newsletter, "Small Business Success Secrets!" at his business web site- www.MrAllBiz.com.
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Is there some trait or skill or something that you think separates the better small businesses or franchise from lesser ones? I would like to know what it is I don't know. Thanks

Interesting question. Of course the answer could be any one of many things: Business skills, financial acumen, marketing savvy, following the system, great products, and so on, but for my money, I think the thing that probably separates really successful franchises and other businesses from the rest of the pack is ... the ability to reduce the risk involved in entrepreneurship to the extent possible. I know, I know, that's not a glamorous or sexy idea, but it is an important one.

While an entrepreneur is someone willing to take a risk with money to make money, one thing I have learned in the years since then is that the best entrepreneurs reduce that risk as much as possible. That way, when things go wrong, because things do sometimes go wrong, these small business people are less exposed to danger and are thus free to sell another day.

But what does that really mean, to reduce your risk? It could be almost anything:

Knowing your numbers. I can't tell you how many entrepreneurs I meet who have gotten in over their head because they got some idea or whim and dropped a bundle of money on an idea or expansion that was not fully vetted.

I was tangentially involved in an enterprise a few years ago when one of the guys unilaterally decided that the best thing they could do was to commit to an ad campaign in a major magazine. The campaign was a bust and the business was stuck with almost $50,000 in advertising debt.

Know your numbers. Crunch your numbers. Make projections. If you can't afford it, don't do it.

Doing your homework. By the same token, the enthusiasm and energy which define many a franchisee can be a detriment if it takes you down a risky, untried road.

Do your research and look before you leap. Test the waters. Think it through. Consider worst-case scenarios. Thoroughly analyzing an opportunity or idea before implementing it will mean that the chance of investing too much time or money on a bad idea will be less likely.

Incorporating. If things do go south, the corporate shield that protects your personal assets from corporate debts will make a huge difference. Without running your business as a corporation or LLC (limited liability company), you risk your personal assets. Most franchisors require that you incorporate, but if you are not incorporated, fix that.

Don't put all of your eggs in one basket. Yes, those big clients or customers are great, but by having a few big customers means that you are very dependent upon their loyalty. What if you lose one or two of those golden geese? You'll have egg all over your face, that's what.

Bringing in help. We like to think we know it all, but we don't, yet thinking we do can lead to costly mistakes. Consider the business owner who did his own accounting and taxes every year, even when his business grew large enough to warrant a CPA. The audit that ended up costing him $10,000 extra ended that.

Whether it's hiring enough staff to free you up to do what you do best, or bringing in a strategic partner with contacts you don't have, or hiring consultants to figure out where you can improve, expert help reduces your risk and makes your life better.

The upshot of all of this is that great franchisees know their strengths, and weaknesses, think ahead, and plan accordingly.

About Steve Strauss

Need a speaker for your next event? Contact Steve! He is one of the world's leading business experts, a popular speaker on the business lecture circuit, and is sure to leave any audience thrilled. A columnist for USA TODAY, lawyer, and author, his latest book is The Small Business Bible: Everything You Need to Know to Succeed in Your Small Business.
You can sign up today for his free newsletter, "Small Business Success Secrets!" at his business web site- www.MrAllBiz.com.

Submit your question for Steve Strauss to answer. Please include your name, address, phone number and e-mail address. Selected questions will be answered every other Monday. Ask Steve a question