Watch for additional articles over the next month on our new series about franchising.

It’s said that imitation is the sincerest form of flattery. If that’s true, then Jeff Johnson and the rest of the Franchise Research Institution help facilitate the metaphorical fan clubs for dozens of successful businesses. If you’re looking to jump into the business world wants the security of treading a tried and proven trail instead of blazing your own, Johnson is your man.

“If you’re a great innovator, franchising may not be for you — we need great duplicators, folks that want to get into business and duplicate what works,” Johnson said. “You need to be a duplicator of the brand, you answer to the parent company. If you get a McDonald’s franchise, for example, you don’t get to start serving hotdogs and popcorn.”

Founded by Johnson in 2002, the Franchise Research Institute studies the concept of franchising from all angles, assessing weaknesses and making note of strengths. Johnson is uniquely suited to the task. After working as a multi-unit franchisee and area developer for more than 17 years, the franchise Johnson helped grow from 200 to 750 units combusted after going public. Fortunately, some good came from the loss. Johnson discovered he’d acquired a sort of reverse engineering acumen that only comes from seeing a franchise’s structural foundation laid bare – a knowledge of what it takes to keep a franchise anchored and solid.

Jeff Johnson, founder Franchise Research Institute

The FRI’s top priority today is promoting strong franchise relationships by maintaining a line of communication between franchisee and franchisor. Its primary means of doing this is its FranSurvey service, a field-tested Internet survey infrastructure that allows franchisors to hear their franchisees’ concerns and provide the best possible guidance to see them through.

Given his extensive background on the topic, Johnson had plenty to say to those hoping to become part of a franchise. Individuals looking to get into the franchise game should be aware, Johnson noted, of the trend toward smaller franchises cropping up in greater numbers during the current economic duress.

“The most popular (franchise opportunities) right now are the smaller investments, the ones people can run from their homes instead of investing in buying land or finding long-term space,” Johnson said. “That doesn’t mean the more expensive franchises aren’t good deals; that doesn’t mean they’re not being done. It’s just harder overall for people find ways to finance them.”

Regardless of start-up costs, however, Johnson said potential franchisees should first narrow their search by gauging two key factors of each franchise: franchisee satisfaction and franchisee success.

“What to look for in a franchise, that’s a simple question with a complicated answer, (and) part of the reason the institute was founded,” Johnson said. “But look for satisfaction and success. If you see that the existing franchises work well for the people that run them – and that they’re happy running them — there’s a greater chance they’ll work for you.”

Entrepreneurs with a business idea or business owners who want to grow — especially those struggling to find funding — should circle Jan. 11, 2012 on their calendars. That’s the day Community Development Resources will host a free lending information meeting at Southeast Community College in Lincoln.

Deb Payne, manager of Alice’s Integrity Loan Fund at CDR, said the meeting will provide vital information that business owners need to get started right and head toward profitability, including information on how to qualify for loans. The meeting is at 7 p.m. in the SCC Continuing Education Center Auditorium. Representatives from the following organizations will be on hand to answer questions:

• Community Development Resources
• Alice’s Integrity Loan Fund
• SCORE
• Nebraska Business Development Center
• Entrepreneurship Center at the University of Nebraska–Lincoln
• Southeast Community College Entrepreneurship Center

“We are particularly encouraging women and minority business owners to attend,” Payne said. “We are wanting to reach those business owners often turned away by banks.”

Payne said the meeting is a great way to start the new year and will provide valuable information about many funding options business owners might not be aware of. CDR specializes in serving small start-up or emerging businesses in Nebraska with several types of loan programs and technical assistance.

Alice’s Integrity Loan Fund serves women and minorities in Lancaster County who have not been able to obtain traditional financing. The loans do not require collateral, but do require borrowers to participate in a business mentoring program.

To RSVP for the free meeting, please email Deb Payne or Dorris Miller. Questions about the meeting or lending program should be directed to Payne at 402-436-2435.

Barry Uphoff is Managing Principal at Capricorn Investment Group and has more than two decades of experience managing private equity, credit and hedge funds.  Barry earned a BA from Johns Hopkins University with highest honors and Phi Beta Kappa distinction.  He read for a Diploma in Law and an MSc in Medicine at Oxford University as a Rhodes Scholar and received an MBA from the University of Chicago, Graduate School of Business with highest honors.  Barry Uphoff is a native Nebraskan who now lives in Palo Alto.

The Raikes School of Computer Science and Management is a nationally recognized leader in interdisciplinary computer science and business honors education.  The School recruits high achieving students and provides them with an intense and well-rounded educational experience that results in graduates that are world class innovators and leaders.

For more on this great event, you can check out an article written by Patti Vannoy over at Silicon Prairie News:

Capital Insights: From car wash client to company acquisition, Archrival founders reflect on growth

This post is from guest contributor Wade Sikkink:  After spending the first part of my professional life inside huge organizations (US Navy, Fortune 500 companies) I became interested in startups and entrepreneurship. I started dabbling in side business ventures while reading more and more about startups and the startup scene.  I’ve been involved in several business ventures, some modestly successful, some not so much and one that imploded leaving a huge crater. I’ve learned a lot along the way and want to share some of what I’ve learned.

It’s that time of year again. No, we’re not talking about holiday cheer and presents. Entrepreneurs in Nebraska always look forward to the annual Nebraska East 2 West Venture Competition hosted by Invest Nebraska. E2W is a one-of-a-kind statewide competition that features some of the most promising startups in the state. This year’s competition was held Nov. 18 at Talent Plus in Lincoln.

Although the competition doesn’t get much popular press, a good crop of six finalist companies were featured. This year’s finalists were chosen by a panel of six judges and featured a wide range of industries and stages. Companies submitted a business plan for the judges to review. The top six were invited to make a 15-minute pitch to the judges and answer questions for an additional 10 minutes.

This is a venture investment competition, so a little review on pitching is in order. Entrepreneurs usually are enamored with their product or service; however, potential investors are more interested in the business opportunity. In short, the focus needs to be on how the business will make money. Some of the companies had a handle on this. Some did not.

This might bring to mind the famous story of when legendary angel investor Ron Conway met with Larry Page and Sergey Brin to talk about their new search engine. They had no business and no clue how it would make money. But Conway was so impressed with the product that he invested and the rest, as they say, is history.

But most entrepreneurs are not Larry Page. They should stay focused on the business opportunity.

So, who were the finalists?

Pro-fit Performance Club Fitting, which has developed an innovative, patented software program for properly fitting golf clubs.

The Coloring Book Artist, which produces customized coloring books using the talents of Nebraska artists to celebrate life.

RestingSpot, which provides a unique combination of mobile and web technologies to connect the memories of loved ones who have died with the precise location of grave sites.

Ace Ortho Solutions, a custom manufacturer of orthopedic braces for dogs.

Agricultural Flaming Innovations, which develops flaming equipment for full-season organic weed control.

Mobile Truckr, which produces a mobile technology platform to handle document acquisition and transmission within the trucking industry.

Clearly, a wide range of industries were represented. The finalists ranged from ideas barely a month old to established companies with hundreds of thousands of dollars in revenue. They all also had different issues to solve in getting their businesses to grow. Some likely will face challenges scaling up to anything bigger than a hobby. Others don’t have a finalized plan for distribution. Another had a huge market opportunity, but no solid way to monetize it.

In the end, the judges seemed to go with the company that had a big market, a good way to monetize its product, established technology and a plan to scale. Pro-fit Performance Club Fitting was chosen as the winner for 2011. The company wins a $10,000 cash prize and the opportunity to negotiate with Invest Nebraska for a further $50,000 investment. This Lincoln-based business has an established technology that has been proven in the market. It is in the process of converting its Windows-based software to a web-based platform, which will allow the company to scale to golf pros nationwide relatively easy.

Attending the presentations is fun and gives you an up-close look at some of the up-and-coming companies in Nebraska.  As a bonus, there are opportunities to network and hob nob with the entrepreneurs when the competition is over. In the future, hopefully more people will learn about the event so a bigger audience can hear from another group of exciting new companies in Nebraska.

Now is not the time to rest.

In his current position as vice president of the software investment firm Nebraska Global and in his previous role as director of entrepreneurship and innovation for the Greater Omaha Chamber of Commerce, Chapman has worked with hundreds of startups, and he has seen many lose perspective on the role of funding.

“They run hard to get capital, then stop and take a breath,” Chapman said.  “The goal is to grow a great business. Capital infusion is only part of the process.”

Chapman preaches perspective to new business ventures, and perspective begins by answering some fundamental questions.

Why?

The formula for starting a new business is often reduced to great ideas plus money equals success, but entrepreneurs, Chapman said, need to understand the purpose that capital will play in their venture.

“Most entrepreneurs don’t know why they want capital,” Chapman said. “They should ask why.”

Some startups will need research and development capital and others will need funds for marketing or to build a team. Some entrepreneurs will need all three, but before applying for any type of capital, businesses should understand exactly what they want that money to do for their company. When that is clear, they can move on to figuring out how many dollars it will take to accomplish that purpose.

How much?

The question of how much money a startup will need is not easy to answer and the costs of getting it wrong can be high. In a 2004 study of why businesses fail, published by Jessie Hagan of U.S. Bank, 79 percent of businesses that failed reported that they started out with too little cash and 82 percent said that poor cash flow management contributed to their demise.

Tom Chapman.

Once again, perspective is important, Chapman said. ”In bringing a product to market, there are always more problems and challenges than you can begin to predict,” he said. Investors like Nebraska Global, experienced business people and financial advisors can be a valuable resource in determining capital needs.

“We can give strategic advice,” Chapman said. “We can look at plans and say this is going to take twice as long as you think.”

He acknowledges it isn’t always easy for entrepreneurs to accept advice or perspective from others.

“Entrepreneurs can have ‘pretty baby syndrome,’ where they think that their baby is beautiful,” Chapman said. “In reality, something brand new is rarely pretty. Use other people for a sounding board and listen to what they have to say.”

When?

Timing is another important consideration. When a startup should seek funding depends on the type of business and the stage of the development cycle. Chapman admitted that investors like Nebraska Global prefer entrepreneurs to come to them with more answers than questions, but he acknowledged that getting to those answers sometimes requires an infusion of cash.

Chapman has seen startups fall in ditches on both sides of the timing question. Some ventures rush into funding before they are ready, but others try to perfect a product or idea before they get the cash infusion they need to move ahead.

“You have to balance a sense of urgency with making a product pretty and absolutely perfect,” Chapman said. ”I’m not saying to put out a bad product, but sometimes you just have to get it to market.”

Some new businesses also wait for the right economic climate to ask for capital. If that’s the case, Chapman said, the time for Nebraska startups to ask is now.

“Entrepreneurship is getting a lot more attention (in Nebraska),” Chapman said. ”It is part of the conversation and capital has increased in both its availability and its transparency.”

Who?

Finding the right investment partner is key to shaping the future of a business. Startups may need investments from several different sources at different times.

“Family and friends, venture capital and angel capital all might be part of the answer,” Chapman said. Regardless of the funding source, entrepreneurs should communicate clearly and make sure they understand their investors’ goals.

“Lots of venture capital is based on the idea of a quick return,” he said. “The returns are based on the idea of growing something quickly, then selling it.”

Entrepreneurs have to decide whether that’s what they want for their company. Other investors, like Nebraska Global, are willing to take a more patient approach and invest in something that will grow over time.

After the Check is Cashed

After the questions are answered and the cash is on hand, Chapman said the real work is just beginning. The goal is never to just create an idea or product, but to take that idea to the market and build a robust business.

“People underestimate how hard it is to get sales,” he said. ”They think if they put a product out there people will be beating a path to their door.”

So to those with cash in hand, Chapman would say, “Get back to work.” To those considering capital, he would say, “Answer the fundamental questions — then make the ask.”

[Shane Farritor's Innovation Seminar series was filmed live at the NET studios in Lincoln, NE. This series is designed to change the way you think about business and engineering. It is designed to encourage you to work with imagination, to improvise, and to try unconventional approaches.]

“Orbiting the Giant Hairball,” on Nov. 3rd, gives entrepreneurs strategies to avoid being bogged down in fixed practices and techniques. In addition, the discussion introduces tools to use within the creative workplace environment.

[Shane Farritor's Innovation Seminar series was filmed live at the NET studios in Lincoln, NE. This series is designed to change the way you think about business and engineering. It is designed to encourage you to work with imagination, to improvise, and to try unconventional approaches.]

The “Brainstorming” installation of the series, held Nov. 1, examines the role and effectiveness of traditional brainstorming activities. Farritor presented examples of efficient and productive alternatives that generate ideas.

“I abhorrently say it’s not a networking group,” Hagemoser said. “I call it a trade association for entrepreneurs.”

According to Hagemoser, L5, so named for its five founding Lincoln-based companies, provides much more than just a locale for meet-and-greets and referral passing. It’s a forum for Nebraska entrepreneurs to come together to share ideas and build a community that strengthens everyone involved through the shared experiences, struggles and triumphs that can only be learned from the school of hard knocks that every successful entrepreneur must eventually graduate from.

“The real value of L5 is bringing people together to build … significant relationships where they feel comfortable sharing things that are going on in their business that they probably don’t want everybody in the world to know,” Hagemoser said. “Those kinds of connections and the ability for people to share those kinds of information only happen once you get to know someone more than the surface stuff that happens at business networking events.”

Before a typical meeting L5 meeting, members receive a topic and a video clip via email usually accompanied by a blog post on the group’s Facebook site. Topics range from hiring practices to stock option and healthcare plans for employees to venture capital and bank financing.

L5 tries to provide a more intimate connection between entrepreneurs. If members don’t want to discuss a topic with the group at large during a meeting they can always split into a smaller group of like-minded people, or split off yet again and talk to each other one-on-one.

Dialogue at the actual meeting is important, but the real goal of L5 is to get members to connect with each other in a meaningful way so that they can learn from one another. The group is composed almost entirely of entrepreneurs so it’s easier for L5 members to relate with one another within the meetings, but L5 goes a step further in promoting member engagement by encouraging member entrepreneurs to meet with someone new from the group each month over coffee or lunch.

“That’s definitely beneficial,” L5 member Bart Dillashaw said. “In any big group meeting where there are a lot of people you may be fluctuating from conversation to conversation. It’s not the same sort of one-on-one or one-on-two direct conversation you could have with someone by following up later.”

This emphasis on connecting members with like-minded individuals also helps to deal with another common problem in entrepreneurship.

“Entrepreneurship is lonely,” Hagemoser said. “What do you do about that when you’re in the four walls of your business with your head down? How do you make sure that you don’t feel like it’s you against the world?”

Hagemoser’s company has changed a lot since the original Lincoln five asked each other how they could help Lincoln entrepreneurs engage with and learn from one another. For starters, L5 has grown from its original core to an eclectic mix of 27 entrepreneurs drawn from a host of different professions. Whether you have decades of experience and dozens of employees, or you’re brand-new to the game and you have an idea that needs to be vetted by knowledgeable professionals, there is a place for you in L5, according to Hagemoser.

“Every one of them has something to share and something to learn,” Hagemoser said.

But the changes go deeper than just an expanding membership, according to Hagemoser. L5′s business model is dynamic, and because of that the group has evolved and adapted to meet the needs of its members continually since its inception.

Many of Hagemoser’s initial assumptions about what entrepreneurs wanted to get out of L5 were proven wrong. Initially he wanted to match up entrepreneurs as mentors and mentees and also to have curriculum taught by experienced entrepreneurs. Both of those were a no-go: Experienced entrepreneurs didn’t have the time to teach and younger entrepreneurs didn’t have the time to listen. It was a sobering experience for Hagemoser.

“I had made an assumption and it was proven wrong in the marketplace,” Hagemoser said. “That was frustrating.”

When the marketplace disproved his initial assumptions Hagemoser had to adapt. L5 meetings are now more like a group discussion among entrepreneur peers rather than classes taught by entrepreneur instructors. The group is also looking to continue its expansion and to host more events in Omaha to cater to its Omaha-based entrepreneurs. Hagemoser said he would like to see the group expand to 50 members or more in the near future. L5 isn’t done changing either. According to Hagemoser, the group will continue to adapt as it grows in an attempt to better suit the needs of the Nebraska entrepreneur community.

“If you’re an entrepreneur and you’re trying to better yourself and you’re struggling with the normal things entrepreneurs struggle with, let’s create a dialogue,” Hagemoser said. “I’m open to suggestions. I would love to tailor L5 to the way that people want to learn and want to connect.”

Entrepreneurs interested in joining L5 or attending the next event should contact Kevin Hagemoser at: L5group@yahoo.com.

If you plan to enter, be sure and come with your sleeves rolled up. A tagline on Invest Nebraska’s website proclaims, “Competition is the whetstone of talent.” According to Dan Hoffman, of Invest Nebraska, Nebraskans have a long history of competition to draw on: competition in sports, competition in business and competition with the environment itself for early pioneers. “All businesses have to compete…we (Nebraskans) realize we have to compete to survive based on raw hard work and talent,” Hoffman said.

Hoffman added that Nebraska is a “beacon of light…we as a state are moving forward.” He said that whereas many state and international business arenas have fallen stagnant, Nebraska has maintained strong growth. Hoffman attributed this partially to the small population of the state, pointing out that with a population of about 1.8 million, most entrepreneurs are only two degrees of separation away from the business contacts that can help them jump forward.

Invest Nebraska wants to be one of those contacts. As a nonprofit venture development organization, Invest Nebraska helps supply advice and investment opportunities for budding businesses in the state. Besides the East 2 West competition, Invest Nebraska also hosts the yearly Hormel Business Competition in McCook, occurring this year on Nov. 4. The organization helps match businesses to angel funding, and is always available to advise with free and in-depth reviews of business plans.

Scott Kleeb, CEO of Energy Pioneer Solutions, was the winner of last year’s East 2 West Competition. Kleeb agreed with Hoffman about Nebraska’s unique potential to create conditions favorable for entrepreneurship.

“Vision and insight are deep within people in our state,” Kleeb said, adding that it took courage and vision among early settlers to “create something that simply wasn’t here before.” Kleeb said that Invest Nebraska is going to re-highlight the kind of things Nebraskans think about, and how those thoughts and ideas fit with the larger picture of international business. Kleeb believes in Nebraska as a place to start and grow businesses that have an impact beyond state borders.

About winning the competition in 2009, Jimmy Winter, founder of RockDex, said that Invest Nebraska’s equity investment “has been invaluable in providing us the resources we needed to develop our product and grow from a seed stage idea to a company with paying clients.” Winter also cited the assistance his company received from Invest Nebraska in arranging meetings with contacts who could help the business expand into social monitoring with VoterTide, the way RockDex monitors trends in the music industry.

Kleeb noted the assistance his company received from Invest Nebraska in making contacts, saying that participating in the East 2 West Venture Competition allowed Energy Pioneer Solutions access to “individuals who could help us grow, and relationships with towns and business leaders in and out of state.” He said that the 2010 competition put a spotlight not just on Energy Pioneer Solutions, but also on other homegrown businesses that deserved attention from investors.

The 2011 East 2 West Venture Competition will be held at Talent Plus in Lincoln. The deadline for entering the competition is Nov. 8. The competition is open to any new or existing business in Nebraska as well as businesses willing to relocate to Nebraska. The winning business will walk away with a cash prize of $10,000 and the potential for an additional $50,000 in investments.

There are six judges for this year’s East 2 West Competition: Gary Hamer, deputy director of the Nebraska Department of Economic Development; Scott Kleeb, 2010 East 2 West winner, of Hastings; Marcus Tooze, founder and CEO of GIS Workshop; Jeff Vaske of Charter Hill Partners; Kimberly Rath, president of Talent Plus; and Kent Knudsen, senior vice-president of investments for Mutual of Omaha and Invest Nebraska director.

Why does Invest Nebraska host competitions for and about Nebraska business? A direct quote from the Invest Nebraska website says it all: “Because we are confident that your success can be Nebraska’s success, and a community that encourages innovation, optimism and entrepreneurship is a community that will never stop thriving.”

For more information about Invest Nebraska, or the East 2 West Venture Competition, go to

http://www.investnebraska.com/access-to-capital/ne-new-venture-competitions/

Other links of interest:

http://www.energypioneersolutions.com

http://www.starherald.com/articles/2011/10/13/business/doc4e93afb5dfffe772666053.txt

http://rockdex.com/