When you’ve weighed the pros and cons between traditional start-ups and franchises, and you’ve made your decision that a franchise makes the most sense for your business goals, then it’s time to consider the financial investment you will need to be successful.
Consider All Costs
Before you make a firm decision, it’s important to consider all the costs associated with running a franchise, including any start-up fees, cost of franchise license, royalty fees, cost of renting or purchasing space, furniture and equipment costs, salaries, insurance, utilities, inventory, etc. A good rule of thumb is to never invest more than 75% of your cash reserves.
Determine Your Net Worth
Before approaching a lender, determine your net worth with a personal balance sheet, which lists your assets and liabilities. Assets include things like cash, savings accounts, real estate, automobiles, and other property. Liabilities are things like bills, credit card balances, loans, and mortgages. Lenders will consider your income, job situation, credit history, and how long you’ve resided in an area, as well as your net worth.
Find a Lender
Commercial banks are a logical place to start when you’re seeking a loan. Do a little research to ensure you’re getting a fair interest rate. The Small Business Association (SBA) offers loans to franchisees as well as traditional start-ups, and they are insured by the government and typically less risky. If you’re a veteran, the Department of Veterans Affairs has a program called Patriot Express, which has a faster approval time and offers lower rates. Many franchisors offer debt financing options, so be sure to inquire with the franchisor about what’s available to you.
Once you have the right financial plan in place, now it’s time to make the commitment. Do your homework and carefully research any franchise opportunity you’re considering. We invite you to consider Ori’Zaba’s Scratch Mexican Grill. Ori’Zaba’s has all the ingredients for success, including an established brand, comprehensive training, and delicious, healthy, made-from-scratch recipes that keep people coming back for more. Contact Ori’Zaba’s today for more information!