If you’re looking into franchise opportunities, then you’ll be happy to know that there are many ways to finance your shift to entrepreneurship. Not everyone has the cash on hand to get started, but you can take out a home equity line of credit, use credit cards, get a Small Business Association loan, sign up for franchisor financing, dip into a retirement account, borrow from a business partner or take out a bank loan. Once you’ve decided what you can afford, you’ll need to scour the internet for franchise information to get the ball rolling.
You’ve always loved Subway, so when a franchise opportunity became available in your area, you jumped on it. To qualify, you needed $250,000 in the bank and another million dollars to cover the building’s lease, equipment and start-up costs. You already had 40% of that cash lying around and the other 60% was secured through a small business loan, which was pretty easy to get. The franchising fee was around $45,000, which went directly to Subway. This is the only real upfront fee.
Then you’ll spend the next nine months learning how Subway operates so you can adhere to certain quality, service and menu standards. You’ll need to stick with their recommended location, dress code and training manuals, but you’ll be able to capitalize on these proven strategies. A Subway field consultant will check in on you periodically to ensure your success and you’ll pay 4% of your sales to the corporate entity. Technically, you’re not your own boss and you don’t really own the business, but you’ll own the assets you’ve purchased.
Franchise opportunities are the backbone of our economy, constituting 35% of all retail and service revenue in the US. According to the Small Business Association, more than 50% of small businesses fail within the first year, with the vast majority crumbling due to weak management. By contrast, only 5% of franchise businesses fail because proven managerial strategies come with the territory, offering a fail-safe business plan. This risk-free safety net is probably the biggest advantage of the franchise opportunity. Additionally, you’ll have easier access to loans and supply discounts than if you had started your own business.
Selecting from among the franchise opportunities available is critical to your success. These business endeavors range from sports and restaurant franchises to travel and retail franchises. You’ll need to consider what sort of environment you’re interested in. For instance, fast food franchises may have you working late into the night, managing continuing turnovers of employees, dealing with the public and smelling like food when you come home.
Or fitness franchises could require you to purchase tanning beds and workout equipment, scout for qualified dieticians and fitness trainers and recruit new clients. Writing down some of your likes, dislikes and goals is a great start. Next, you can hit the web and research the franchises available at your investment level and geographic location.