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Casual Articles - Five Important Questions to Ask About Franchises
Are you getting the desired results from your business vision statement? If not, here are a few ideas to help you successfully bring your vision to life:Get the perspectives of your employees and your customers to gain valuable insight and support for the business vision statement.Be sure your enterprise's vision statement is clear and specific; inspiring statements are great, but people interpret words very differently.Implement the business vision statement with professional input, a strategic plan t
How much available cash do you have to put towards the franchise?
Evaluate the assets that you can liquidate to meet your initial and ongoing expenses. Franchisors require prospective franchisees to have a certain net worth going into the venture, and they will probably require you to have good credit. As you determine the cash you have available to invest in a franchise business, don’t forget that you still have to pay your own living expenses until the business begins to show a profit.
What financing can you get to make up the difference between your expe
Starting a business can be a rewarding experience, but it
can also be very time consuming and difficult. Many
resources are available to assist you, but information
overload can cause you from moving forward.Keeping it simple is often the best way of maintaining the
momentum necessary to get your business started. There are
a series of steps to ensure success.The first step toward getting your business going is
deciding on a name, for example "New York Landscaping."
Any name that you do business under other than your own
give
How much initial investment will you need to buy the franchise?
Your startup costs will include a franchise fee, an initial cash investment, professional fees, insurance, employee training, operating licenses, inventory, equipment, rent, utilities, moving expenses, furniture, equipment, decor, signs, architectural fees, computers, and computer accessories. The franchise fee buys you the right to use the franchisor's trademarks, business methods, and distribution. The average franchise fee is $20,000 to $100,000. The amount of the franchise fee will be determined by how well known the franchisor is and the size and location of the franchisee's territory.
Do your own calculations to determine your start-up and ongoing expenses. Franchisors may underestimate these expenses in order to make the franchise more attractive as a possible investment. If you rely on the franchisor’s estimates, you could have insufficient funding for the necessary start-up expenses and ongoing expenses. Consult with realtors, contractors, insurance agents, and other service providers that you expect to use and do your cost analysis of these initial expenses.
What are your ongoing expenses until the business starts showing a profit?
Ongoing expenses will include royalties to the franchisor, advertising fees, equipment maintenance, employee costs, insurance, rent, professional fees, and inventory. The royalty fee will be a percentage of your gross sales, and the franchisor will require you to keep an accurate accounting of your sales. Because it is based on gross sales rather than profits, you have to pay this expense whether your business is profitable or not.
Most businesses do not earn a profit for at least the first year. You have to plan for this lean period and have other funding to keep your business operating. Always estimate your expenses high, because unexpected things always occur. Hardly any new business starts out with too much money for its expenses, and you should expect a shortfall for the first year of operations.
How much available cash do you have to put towards the franchise?
Evaluate the assets that you can liquidate to meet your initial and ongoing expenses. Franchisors require prospective franchisees to have a certain net worth going into the venture, and they will probably require you to have good credit. As you determine the cash you have available to invest in a franchise business, don’t forget that you still have to pay your own living expenses until the business begins to show a profit.
What financing can you get to make up the difference between your expen
Effective advertising is an investment in your business. Ineffective advertising is a liability and a waste of money. Here are the top 5 things to avoid making sure you advertise effectively.1. Don’t advertise at allIf you are in business and you don’t do some kind of advertising you are not doing business. The only excuse for not advertising is that you have more business than you can handle and then you should expand, raise yoru prices, and advertise more.This is not to say that you should buy advertising that you cannot affor
Do your own calculations to determine your start-up and ongoing expenses. Franchisors may underestimate these expenses in order to make the franchise more attractive as a possible investment. If you rely on the franchisor’s estimates, you could have insufficient funding for the necessary start-up expenses and ongoing expenses. Consult with realtors, contractors, insurance agents, and other service providers that you expect to use and do your cost analysis of these initial expenses.
What are your ongoing expenses until the business starts showing a profit?
Ongoing expenses will include royalties to the franchisor, advertising fees, equipment maintenance, employee costs, insurance, rent, professional fees, and inventory. The royalty fee will be a percentage of your gross sales, and the franchisor will require you to keep an accurate accounting of your sales. Because it is based on gross sales rather than profits, you have to pay this expense whether your business is profitable or not.
Most businesses do not earn a profit for at least the first year. You have to plan for this lean period and have other funding to keep your business operating. Always estimate your expenses high, because unexpected things always occur. Hardly any new business starts out with too much money for its expenses, and you should expect a shortfall for the first year of operations.
How much available cash do you have to put towards the franchise?
Evaluate the assets that you can liquidate to meet your initial and ongoing expenses. Franchisors require prospective franchisees to have a certain net worth going into the venture, and they will probably require you to have good credit. As you determine the cash you have available to invest in a franchise business, don’t forget that you still have to pay your own living expenses until the business begins to show a profit.
What financing can you get to make up the difference between your expe
Over the past several years the use of web-based collaboration tools, such as web conferencing services and extranets, has grown dramatically in support of the increasing number of work groups with geographically dispersed members.These tools have allowed organizations to tap the resources of employees, consultants and vendors in real-time, regardless of their location. Additionally, they have dramatically decreased the cost of serving clients and made more accessible a larger universe of prospective customers.But at what cost? The dan
What are your ongoing expenses until the business starts showing a profit?
Ongoing expenses will include royalties to the franchisor, advertising fees, equipment maintenance, employee costs, insurance, rent, professional fees, and inventory. The royalty fee will be a percentage of your gross sales, and the franchisor will require you to keep an accurate accounting of your sales. Because it is based on gross sales rather than profits, you have to pay this expense whether your business is profitable or not.
Most businesses do not earn a profit for at least the first year. You have to plan for this lean period and have other funding to keep your business operating. Always estimate your expenses high, because unexpected things always occur. Hardly any new business starts out with too much money for its expenses, and you should expect a shortfall for the first year of operations.
How much available cash do you have to put towards the franchise?
Evaluate the assets that you can liquidate to meet your initial and ongoing expenses. Franchisors require prospective franchisees to have a certain net worth going into the venture, and they will probably require you to have good credit. As you determine the cash you have available to invest in a franchise business, don’t forget that you still have to pay your own living expenses until the business begins to show a profit.
What financing can you get to make up the difference between your expe
Technical competence alone does not make you ‘referable’, no matter how good you are.My friend Treva recently experienced a car breakdown in Los Angeles. Her vehicle was towed to a nearby service station where the manager put her at ease with his comfortable style and obvious expertise. He promised to call her the next morning with an evaluation and an estimate.She took the bus home. The next morning, he did not call. She called him in the afternoon. He apologized and agreed to call her back by the end of the day. But he didn’t. She re
Most businesses do not earn a profit for at least the first year. You have to plan for this lean period and have other funding to keep your business operating. Always estimate your expenses high, because unexpected things always occur. Hardly any new business starts out with too much money for its expenses, and you should expect a shortfall for the first year of operations.
How much available cash do you have to put towards the franchise?
Evaluate the assets that you can liquidate to meet your initial and ongoing expenses. Franchisors require prospective franchisees to have a certain net worth going into the venture, and they will probably require you to have good credit. As you determine the cash you have available to invest in a franchise business, don’t forget that you still have to pay your own living expenses until the business begins to show a profit.
What financing can you get to make up the difference between your expe
An interesting combination of factors at this time in history may be the reason so many women are turning to franchising to fulfill their entrepreneurial desires. Women’s increased financial power, better education, and corporate experience, combined with their desire for more autonomy and desire to connect with others who share their values make franchising a great fit for many women.Women are better educated now than ever. They have accumulated considerable corporate experience. After years in the corporate world they are tired of being
How much available cash do you have to put towards the franchise?
Evaluate the assets that you can liquidate to meet your initial and ongoing expenses. Franchisors require prospective franchisees to have a certain net worth going into the venture, and they will probably require you to have good credit. As you determine the cash you have available to invest in a franchise business, don’t forget that you still have to pay your own living expenses until the business begins to show a profit.
What financing can you get to make up the difference between your expenses and cash investment?
After you determine how much you can personally contribute to pay your expenses, you will have to get financing for any additional amounts required. Some franchisors provide financing, but you should explore the financing options to be sure you get the best rate and the best terms. Any lender will require the loan to be secured by real and/or personal assets, and they will require you to personally guarantee the loan.
What Help Does a Franchisor Provide to Franchisees?
A franchisor usually offers financial assistance, location selection, employee training, operations manual, standards and specifications of the franchise, specific job descriptions, employees’ roles and performance, management standards and training, advertising, ongoing support, human resources, accounting, technical support, insurance advice, and other support relating to the operation of the franchise.
Jo Ann Joy, Esq., MBA, CEO The future of your business starts here!
You may contact Jo Ann by phone at (602) 663-7007, by fax at (602) 324-7582, by email at joannjoy@Indigo Business Solutions.net, and by mail at 2313 East Ocotillo Rd., Phoenix, AZ 85016. I have many published articles, and I will send any article to you free of charge. Most consultations are free.
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