Hiring The Right People
Many franchises - such as food, hospitality and...
Financial Comfort: How to Achieve Balance When First Opening Your Franchise
One of the biggest concerns of new Canadian franchisees is having enough money to stay comfortable. "Surprise" expenses are likely whenever you are starting a new venture, and it can become overwhelming fast when you're facing a whirlwind of sudden costs you never anticipated.
This scenario is, of course, par for the course for a new business, and you should one day have enough money coming in to outweigh the expenses. However, it can be a tricky balance in the beginning, which is why being as financially prepared as you possibly can be before you open your doors is the right move.
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Save, save and save some more
As you transition into Canadian franchise ownership, it's very likely you still have an outside job. Now is the time to cut all unnecessary expenses and set aside as much money as you can for the future. Look at where you are spending unnecessarily and cut those costs for now, such as eating out or making impulse purchases.
Consider getting a part-time job, if possible, for extra income, or work more hours at your current job if they're available. You don't have to do this forever; just bringing in extra income to save toward your franchise for a few weeks or months before you step into your new business full-time will put you in a far stronger financial position.
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Borrow some extra money
If you are using investors or taking a loan out to fund your franchise, consider taking out a little more than necessary. If this money isn't used, you will have it sitting in your bank account to simply pay back.
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Work ahead of time
You can help your future self by getting a head start on your franchise now. If there are things you can buy--such as licenses you will need--handle them earlier on, provided they won't expire before you need them. This will save you time and allow you to spread some of your expenses out.
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Look for deals
Now matter how you are funding your franchise, it's always wise to make the moves that are the most friendly to your budget. While some areas are going to be set costs you can't change, such as franchise fees, there are some other areas where your decisions will impact the price tag. This includes remodeling, redecorating and overhead stocking.
Last but certainly not least, make sure you have a buffer fund in place before you open your franchise. You never know when your franchise may have a "rainy day," so being prepared in advance will give you a better chance of success.