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As you might have guessed, your net worth is a pretty big part of the equation when it comes to Canadian franchisor approval. While the net worth requirement will vary by franchisor, there is normally no way around meeting it if you really want to be a franchisee.
While the idea of building your net worth to meet the minimum needed for your preferred Canadian franchise might seem daunting, it is necessary. As you work toward qualifying for your dream brand, consider the steps below for building up your net worth.
Create your own balance sheet
You need to know exactly what you owe and what you have. It may sound basic, but it is the necessary starting point. Your balance sheet will act as your "scorecard" for your net worth progress, and it is also how a franchisor will evaluate you.
Review the balance sheet again
Many people underestimate what they own, so you need to re-check your balance sheet after you make it. There are many things of value that are easy to overlook, including money you are owed, valuables and even old bank accounts. While true net worth does lie in the liquid assets, your balance sheet should still show all of your assets.
Acquire some assets
It's easier said than done, of course, but acquiring assets is one solid way to grow your net worth. When you can buy something for less than it is worth, you will increase your net worth. If, for example, you find and buy a car for $30,000 but its value is actually $35,000, you just increased your net worth by $5,000.
Sell other assets
Consider turning some of those non-liquid assets into cash. Your coin collection that you rarely touch anymore, for example, may be on your balance sheet, but you do want to boost your liquid asset figure. Selling that collection will help you meet that goal.
Go back to the basics
There are also some tried-and-true ways to boost your net worth. Increasing your income, for example, will boost your net worth. Now is the time to ask for that raise or take a training course that will entitle you to a higher salary. Reduce your spending wherever you can, especially in discretionary areas such as vacations, entertainment and dine-out food purchases. Last but not least, now is the time to save as much as you can. Saving more while spending less will help increase your net worth.
Naturally, it's also wise to make sure you are looking at a brand with a realistic net worth requirement for you personally. If you are shy by a reasonable figure in the net worth department, you can certainly use the steps above to reach your goal. However, if the net worth requirement would take you many years to reach, it may be time to look for another brand with a lower requirement.