Jump to Main Content
USA flagAn Official Website of the United States Government
Industry Word

Blogs.Industry Word

Register

Most New Franchise Owners Forget This

Comment Count:
61

Comments welcome on this page. See Rules of Conduct.

Most New Franchise Owners Forget This

By FranchiseKing, Guest Blogger
Published: July 28, 2011 Updated: January 3, 2013

There’s a lot of excitement leading up to the purchase of a franchise business. Searching for the right franchise business to invest in involves many steps, and they all have to be done right, in order to minimize financial risk.

One step has to do with the money; setting a budget for the franchise business, and arranging a small business loan. (Hopefully, the SBA can get involved!)

All franchise buyers need *a plan. Most forget to do the following though, even with all the planning in the world;

They forget to set-aside money for living expenses during the very predictable, and usually difficult, start-up phase.

I’m not really sure why this is. In my experience as a franchise advisor, I’ve seen most franchise buyers meticulously figure in their operating expenses when they’re crunching their numbers. They do seem to know how important that is. But, when it comes to figuring out how much money to set-aside for those all important day-to-day living expenses, they seem to enter an *alternate universe of sorts. And, it’s a scary one.

As a franchise advisor, one of my goals is to make sure that the people I’m working with don’t forget something. (Actually, that they don’t forget anything.) That’s why I always make sure to remind them to make sure that they figure in the money they’re going to need every month for the following;

  • Mortgage payment
  • Utility bills
  • Car payments
  • Kid’s braces
  • Car/house/life insurance

Those expenses can add up pretty quickly, and if they’re not accounted for, they can prove to be large enough to force a young franchisee to close their doors. That’s right;*franchise failure. Running out of money is one of the most common reasons that franchise owners end up going out of business, and it need not happen.

Investing in something as big as a franchise business requires total focus. It’s also something that shouldn’t be tackled alone, and it doesn’t have to be. There are plenty of resources available, both paid and free.

I’ve listed some of the free ones below. The point is this; choosing a franchise that makes sense for you is only one part of the process; the planning part…that’s serious stuff. Get some help. You’ll increase your chances of success, and be that much closer to reaching your goals.    

Free resources

SCORE- Get assistance from retired business owners and executives in SCORE offices located across the country

Small Business Development Centers(SBDC’s) are located in all 50 sates, and provide worshops and counseling for would-be small business owners.

SBA.gov- Several free online courses are available for people wanting to start a business

 

*Non-US government websites

About the Author:

Joel Libava

Guest Blogger

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and is a franchise ownership advisor. He shows people how to carefully choose and properly research franchises.   

Comments:

its a very awesome and fantastic article . i like to thanks. 'http://www.spotlight-seo.com'
It is very important post , every body must see and read it , its full of knowledge. http://www.spotlight-seo.com' Top Ranking
This is great advice, and I think it holds true for anyone starting a business. The first year of a business can be very difficult, with lots of cash being invested but little coming back in as revenue. Another item that a lot of business owners forget is insurance. What happens if someone gets hurt on your premises? What happens if there's a fire? What happens if someone sues your company? It's best to be prepared in this situation to give you peace of mind and financial security.
I always want to do a franchise business someday, so many things to learn, I guess I have to keep reading on how to start up my franchise hotel finder business
Hi. This is probably one of the best mentions of this topic I have seen in quite a while. It is obvious that your knowledge of the subject is deep and this made for a very interesting read... Thanks for taking the time to discuss this...
I was suggested this website by way of my cousin. I am no longer positive whether or not this post is written by way of him as no one else understand such certain approximately my trouble. You're wonderful! Thank you!
Nice Post This post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you.
Nice thought love to read the whole new thought of it which is totally a good one.
That’s why I always make sure to remind them to make sure that they figure in the money they’re going to need every month for the following;Website RankingThis post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you.
Very innovative post. cheap flights This post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you.

Pages

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!