Tag: franchise funding

Financing the Start of Your Franchise

Deciding to start a business is exciting and scary. There are many considerations but depending on your business plans and overall goals. Choosing to buy a franchise can help solve many of the problems when starting a new business, especially if it is an established brand with a loyal consumer base. It does not solve then need for financing. You may still need to find financing. Here are several options and we are here to help you find the one that works best for you.

Franchisor

A great option for financing is from the franchisor directly. Granted, this is not offered through every franchise, but a growing number of reputable businesses are offering this potential funding solution. In fact, several companies even help to guarantee the loan in case of franchisee default. If interested in franchisor funding, then look under item 10 of the FDD to see if it is offered.

SBA Loans

The Small Business Administration offers partial guarantees to third-party lenders to help reduce the risk of lending to new ventures or franchise developments. Many franchisors are approved by the SBA, meaning that the loan process is streamlined, not guaranteed. The 7(a) loan program is the most beneficial program for franchisees and has a cap of $2 million.

Family and Friends

While it is a nice idea to partner with family or friends in a business venture, it is vital that the details of the partnership are laid out in a legally binding agreement. These agreements offer clarity and specify obligations, which help to avoid potential personal and professional conflict later.

Online Lenders

Many online lenders may be happy to work with a new franchisee, but not everyone is aware of this potential marketplace. There are several websites available that act as intermediaries between lenders and borrowers. Essentially borrowers create a loan request, the intermediary site then posts the request to its pool of potential lenders to find a suitable loan match, which can be a line of credit, bank loan, SBA loan, etc.

Retirement and C Corporations

One of the last options available to a franchisee is to use their retirement accounts. Now, since there are penalties for removing these funds early, they can establish a C corporation, which would then be the owner and operator of the business. The franchisee can then roll their retirement accounts into the corporate account, investing it into the newly formed company.

A franchise can be a great opportunity and funding may be difficult, but we are here to help you navigate all the challenges of business ownership and financing.

It is possible for networking to improve your quality of life?

A study by Network Wise (see below)  has shown that networking can improve quality of life. Having a strong social network is an indicator of psychological, emotional and physical wellness. The lack of a social network is connected to poor health and increased risk of mental and physical ailment.

Strong and healthy networks lead to decreases in:

  • Dementia
  • Breast Cancer
  • Premature Death

There is more to networking, and technology is changing everything.

We traditionally think of networking as a chamber of commerce meeting, where you meet in the evening for free drinks, exchange business cards, hanging out and maybe look for a new job. Or people think it may be getting as many LinkedIn connections as possible.

Networking is changing. Network Wise has discovered that networking is used for more than getting a new job. New business opportunities are uncovered, leads are being exchanged, new scientific discoveries are being made. Technology is driving the change. With sites like LinkedIn and Alignable, we can extend our professional networks beyond our local area and with sites like Facebook and Twitter, we are able to drastically increase our social networks.

The are three types of networks: Operational, Personal and Strategic. Operational allows us to engage with people who are central to our business success. Personal allows for socialization and we can seek out mentors and share ideas with Strategic networks.

Online or Face-to-Face?

The answer is both. Even though technology has allowed us to create more far-reaching networks, face-to-face networking is still important. Online networking can increase the size of your network, but face-to-face networking can help you build more meaningful relationships. The goal of an online connection is to gain a face-to-face meeting.

Is there an opportunity to make money?

Networking’s importance increases every day. It is creating more opportunities, growing businesses, and creating jobs. The franchising industry has a way for you to get involved and develop your own groups. Network In Action is disrupting the networking industry. It is using technology to help its franchisees build long-lasting and valuable relationships. They have developed a system that has a low investment and a quick ROI. They give their franchisees the ability to give back to the community and help all its members grow their businesses and not have to sacrifice time.

Click Here to learn more about Network In Action or to start your own networking groups.

 

 

The Art and Science of Networking

Source: NetWorkWise

What is Stopping Your from Buying A Franchise?

Question about buying a franchise

The answer could be fear.

As a franchise broker, we often ask this question and we hear answers such as “There is a lot of competition in this market” or “I don’t know if people are interested in these services” and most commonly “I don’t know if I can make enough money to live on.”

When the smoke clears, it is not about the product or services that are being sold or even the money – it is about fear. The fear of failure. We tell our clients that if you don’t have a little fear, we would be worried. But too much fear can cause decision paralysis. Fear can be a good thing and it has it place – in moderation. Don’t let fear keep you from your dreams.

There are ways to overcome your fear of failure and be able to forge ahead. First, face your fears in order to change your attitude. Secondly, make a plan for success.

Facing your Fear of Failure

When it comes to business, the biggest fear is that you will lose all your money and possessions. Another fear is shame, which can elicit feelings like anger, frustration and regret. Failure does not make you a bad person nor does it physically change you. The fear of losing all your possessions/money is not very likely. You are able to structure your business in a way to limit liability and protect yourself. You will need to know how much money you are comfortable losing in the worst-case scenario. Nothing is ever guaranteed.

There are two things you can do: face the fear and focus on aspects you can control.

Face the fear. Accept that failure makes you afraid and ashamed. Find advisors you can trust and bring these feeling to the surface with them.  This will help prevent your unconscious from sabotaging  your efforts and it will get assurance from them that can bolster your self-worth and minimize the threat of disappointing them.

Focus on the aspects that you can control. For example, worrying about whether people will want your product or service. A franchise can minimize this fear because they have already forged a process that has proven successful to others.

Make a Plan for Success

You already know how to fail by doing nothing. You need to learn how to succeed.

  • Do your research – While you cannot possibly have every piece of information, collecting the most important data will help you make a smarter decision and help alleviate the fear of failing. A franchise has already completed a lot of this information and has used it to makes its franchisees successful. As a broker, we will help you in gathering all the data and information to help you make a smart decision.
  • Create a Plan -Writing a business plan is not easy but it is worth the time and effort. The business plan can act as a roadmap to success. Many franchises have already created business plan templates you can use, you will just need to customize it to your market.
  • Make a Plan B – Making a Plan B is NOT setting you up for failure. It shows that you are a smart business owner. Starting a business is taking a measured risk and by planning accordingly, you can build your confidence in your decisions. Your Plan B does not have to be an alternative course that you take if you fail. It can be a tool to help you consider alternative paths.
  • Get Support – When to starting a business alone you can get stuck in your own self-doubt. You will need a support system to help you on your journey. This is the beauty of a franchise, you are in business for yourself but not by yourself. You are buying into an already existing and successful support system.

My point is that fear is not a bad thing. It can help you be more successful. It can take outside your comfort zone to learn something valuable. Owning a franchise can be one of the most rewarding experiences of your life and we would not want you to miss out just because of a fear of failure.

Our role is to help you through this process and to help you face those fears. As franchise owners for 16 years, we have faced those fears. We had our doubts. But in the end, it was the best decision we ever made.

Our personal journey to buying a franchise

Mike and Laura

We never looked back.

We would like to share with you our journey to buying our first franchise with this three part series.

We bought our first franchise (YTD we have owned 6) back in 2001 pre 911. The economy was about to go through a Tech Bubble and we lived in Northern Virginia – just about a perfect storm. There is never a perfect predictor of how outside conditions can influence your outcomes.

I knew my job at US Office Products was going to disappear as we were purchased by Corporate Express and I did not fit their corporate mold and Mike knew his days were numbered as the Tech Startup he worked at was cutting fat in order to be sold (laying off employees with false stock promises). This was in May of 2001.

At that time we began to look at our resumes riddled with jobs that lasted 3 to 5 years and the thought of having to look for another job every few years was most unappealing. That was the beginning of the “new economy.” We needed to break the cycle.

We took inventory of our skills and experiences. We did a SWOT analysis. We searched the internet. We visited some franchise brick and mortars. We researched and researched and then we asked my Dad for advice. We bought a book about franchising and read that cover to cover. Then we began to trust our instincts.

Our First and Only Corporate Visit

At the time it seemed to be a waste of time. We understood the concept – non-medical in home care for seniors. We knew it was going to involve managing a lot of people. We knew they had a system in place and other franchisees were successful even though it was a new franchise. We jumped in our car and decided to take a road trip out to Dayton, Ohio to visit Comfort Keepers. Why not combine seeing America and have a little fun on the way (I fell in love with the city of Pittsburg, it is really a neat city).

We drive up to the office building excited. We were not sure of what to expect and what type of dog and pony show we were about to see. Clustered together with some other couples we were herded into the conference / training room and the founders began to talk about how their company started and the need the fulfilled in their community. We began to relate their experiences with our own family members and saw how we can make a difference in the lives of others. SOLD.

More Research

Were we being too hasty? We had only visited 1 franchise and there was one more like it we knew about. Why not look at the competitor? What was their corporate culture like? We seemed to fit in with Comfort Keepers. Calls were made to some of the franchisees, we asked my Dad, who is a CPA to look at their Profit and Loss and Balance Sheet for us and to give us questions to ask about the soundness of their company.

We still had jobs. We were beginning to hate what we were doing and how we were being treated. The thoughts of taking control of our lives was dominating our conversations. The fear of doing something new would always bring us back to the fact that we still had jobs. One by one our colleagues began to disappear. Mike and I realized the clock was ticking faster and it was time to say yes.

If you would like to begin your journey, we are here to help. Take the first step and complete a no obligation application. We will work closely with you during the entire process to help ensure your selection of the franchise that is right for you.