Hiring The Right People
Many franchises - such as food, hospitality and...
Franchise ownership is a significant financial investment. It's one you will need to plan for, whether you have enough assets to handle the cost of starting the franchise yourself or you need to finance via a lender or other entity.
Before you begin your franchise, make sure your financial ducks are in a row. This will help you qualify for any financing you may need and start your business off on the right financial footing.
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Clear your credit
Make sure your credit history is as clear and accurate as possible. Mistakes here can cost in terms of borrowing, since errors on your credit history will impact the score lenders use to determine your creditworthiness.
If you find any errors on your credit report, report them to the credit bureau who provided you with the report as soon as possible.
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Tighten your spending
Having enough money to start and acquire the franchise is not going to be enough. You'll need to have sufficient funds saved to pay yourself and keep your franchise going for at least one to two years. Like other businesses, franchises are normally not profitable in the beginning, so you have to be able to weather this time period.
Cut down on your personal spending to ensure you're saving as much as you can. The more you save, the better off you'll be once your business is up and running.
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Look into potential funding sources
There are other franchise funding options besides going through a financial institution. Consider pitching to any investors you know or are able to find through research if you're comfortable having investors in your new business. Look for any business grants you may be eligible for.
You can liquidate some of your own belongings--such as cars or properties--to help prepare your franchise fund. Before you do this, consider whether you can really live without the asset you're planning to liquidate, and what the impact of the loss of the asset will be on your life and your finances overall.
If you're not certain about your financial readiness for your franchise, work with a financial professional. They can review your current financial situation and offer you advice based on your goals. Look for a professional with experience in franchises; they will be able to help you more accurately estimate how much money you are going to need.
