There are many reasons people decide they want to by a franchise business and each of these reasons involves a variety of considerations. In the mind of most people contemplating such a decision, there is one overriding factor: Security! If you’re considering buying a franchise, you should be asking yourself a number of significant money-related questions. Here’s what we consider important:
- How much total investment will this franchise require?
- How much will I need in operating capital reserves to cover losses after opening the franchise until it reaches the break even point in terms of cash flow?
- How much extra cash do I need to cover living expenses while I’m starting my franchise?
- How long will it take my new franchise to reach break even?
- How much of my total investment (including capital reserves) do I need to have in cash?
- What standard financing options exist for me?
- What alternative financing options exist?
- How much money can I make in this franchise?
- What are the ranges in financial performance of the existing franchisees?
- How financially strong is the franchise company?
You should know the answer to each of these questions before you decide to invest in any franchise opportunity. If you do, and assuming the answers are acceptable to you, you can minimize some of your concerns about money as you build your new business. Ask a business expert at your franchise source.