Consider These Costs for any Business Franchise Opportunity
When you're trying to calculate the cost of a business franchise opportunity, the first thing to realize is that not all franchises are created equal. That is, the cost of a given franchise will vary depending on a number of factors, including the size of the franchise, required equipment, and other factors we'll address here. All of these items must be considered when figuring out the cost of a franchise.
1. Franchise Size
Generally speaking, the larger the franchise, the more it's going to cost. A stand alone brick-and-mortar business will naturally require a much higher investment amount than a little vendor kiosk you see at the mall. A McDonald's restaurant, or a Meineke Muffler shop will cost a lot more than a seasonal hot dog stand.
2. Equipment
Equipment costs will factor into the overall franchise cost. A franchise requiring more equipment, for example a printing business or an auto shop, will cost more than a franchise opportunity that's less equipment intensive, like a copy center.
3. Employees
As for ongoing costs to operate your business, if your store requires employees, as opposed to a one-person operation, you'll have more costs since you have to factor payroll into your costs. A business you run by yourself if have less overhead in this regard.
4. Supplies
What supplies will your franchise business need? The more supplies, naturally the bigger the investment in terms of initial capital and ongoing costs to operate your business. Comparing a Burger King to a hot dog stand, the Burger King requires more supplies: Hamburger patties, buns, lettuce, tomatoes, fries, chicken patties, and so on cost a lot more than frozen hot dogs!
This is just a very basic overview of course, but the point is that when you are considering a business franchise opportunity, one thing you need to do is figure out what level of investment you're able to make in the business. This will help you determine the type of franchise you can afford and thus help in your overall decision about the specific franchise businesses you're able to consider. Thus, if you can only invest a relatively small amount, then you can only target the smaller franchises; larger amounts allow you to consider some of the more expensive franchises.
Remember to take into account all of the various costs of a franchise. This includes the initial startup costs, cost of the land, building, and equipment costs, and the ongoing operation costs required to run the business. A franchise buy is a long term commitment so keep that in the forefront of your mind when considering various business franchise opportunities.
Business Franchise Opportunities | 5 Key Things to Know About Franchise Buying
The five basic key things to know about buying a business franchise opportunity.
When someone new to business franchise opportunities is ready to get started and they begin their research, one thing they do is look for books. One such book might be something with a title like Franchise Buying - What You Need to Know.
There's a lot to know when starting a franchise, and a lot to keep in mind. So many people go into a franchise business with huge expectations for success in terms of sales, revenue, growth and so on. In the end, many of these same people end up pretty disappointed.
So, if you make the decision to invest in a franchise business, you need to know the truth about franchising prior to investing your money, time, and effort into it. The following items are key to remember and are often the very things people forget when getting into franchising.
First, do away with a "get rich quick" mentality and expectation if you have it. Simply buying and owning a franchise today will not make you suddenly rich tomorrow.
Indeed, you'll probably make money in your franchise (no guarantees though), but you must be prepared to put in a lot of time and hard work before you see profits. This is where a good business plan for your business franchise comes into play. The plan will help you project and see on paper your projections for revenue, profit and loss, and other key financial measures.
Next, realize that with franchise ownership, you are working for yourself - you are your own boss. But, you do in fact have others you need to report to: The franchisor from whom you bought your franchise. They will require regular reports, for example monthly, to see how your business is performing. Thus, you will answer to the franchisor, in a sense, in the same way you would answer to your boss in a traditional job.
Next, do not underestimate the amount of capital you will need to purchase your franchise opportunity and get started. Plan on paper: Figure out exactly what's required from the franchisor. Put together a clear investment plan to determine the amount of initial seed capital you'll need, and what you'll need to raise, or borrow.
As for selecting a franchise, don't just go off and choose the first franchise you think of! Do plenty of research and think about what your strengths, weaknesses, desire, and goals are. Think about your likes and dislikes and list all the jobs you've had in your career along with the positive and negative aspects of each. This exercise will help you narrow down the huge array of choices you have when looking at business franchise opportunities.
Finally, you need to realize that franchising isn't for everyone; it may not be for you. All the more reason to do a lot of research about business ownership, franchising, and your own personal profile. There are a ton of things to consider when thinking about becoming a franchisee.
Do your homework, attend trade shows, talk in depth to other franchise owners, investigate franchising companies, record all your notes, do a preliminary business plan, and then sit back and critically analyze all your data. You'll then have a solid information base from which to make a good decision as to whether getting started with business franchise opportunities is really for you.
When someone new to business franchise opportunities is ready to get started and they begin their research, one thing they do is look for books. One such book might be something with a title like Franchise Buying - What You Need to Know.
There's a lot to know when starting a franchise, and a lot to keep in mind. So many people go into a franchise business with huge expectations for success in terms of sales, revenue, growth and so on. In the end, many of these same people end up pretty disappointed.
So, if you make the decision to invest in a franchise business, you need to know the truth about franchising prior to investing your money, time, and effort into it. The following items are key to remember and are often the very things people forget when getting into franchising.
First, do away with a "get rich quick" mentality and expectation if you have it. Simply buying and owning a franchise today will not make you suddenly rich tomorrow.
Indeed, you'll probably make money in your franchise (no guarantees though), but you must be prepared to put in a lot of time and hard work before you see profits. This is where a good business plan for your business franchise comes into play. The plan will help you project and see on paper your projections for revenue, profit and loss, and other key financial measures.
Next, realize that with franchise ownership, you are working for yourself - you are your own boss. But, you do in fact have others you need to report to: The franchisor from whom you bought your franchise. They will require regular reports, for example monthly, to see how your business is performing. Thus, you will answer to the franchisor, in a sense, in the same way you would answer to your boss in a traditional job.
Next, do not underestimate the amount of capital you will need to purchase your franchise opportunity and get started. Plan on paper: Figure out exactly what's required from the franchisor. Put together a clear investment plan to determine the amount of initial seed capital you'll need, and what you'll need to raise, or borrow.
As for selecting a franchise, don't just go off and choose the first franchise you think of! Do plenty of research and think about what your strengths, weaknesses, desire, and goals are. Think about your likes and dislikes and list all the jobs you've had in your career along with the positive and negative aspects of each. This exercise will help you narrow down the huge array of choices you have when looking at business franchise opportunities.
Finally, you need to realize that franchising isn't for everyone; it may not be for you. All the more reason to do a lot of research about business ownership, franchising, and your own personal profile. There are a ton of things to consider when thinking about becoming a franchisee.
Do your homework, attend trade shows, talk in depth to other franchise owners, investigate franchising companies, record all your notes, do a preliminary business plan, and then sit back and critically analyze all your data. You'll then have a solid information base from which to make a good decision as to whether getting started with business franchise opportunities is really for you.
Franchise Opportunities | Consider the Turnkey Business Franchise Opportunity
The turnkey business model makes it easier to get started with business franchise opportunities.
For someone just getting started in a franchise business opportunity, the turnkey business is one of the best options available. Why? Well, with a traditional franchise, the new owner has to do most if not all of the initial preparation work themselves to get the business ready to open. With a turnkey business, everything required to get going is provided.
That's the origin of the name "turnkey business". It's implying the notion that all you have to do to open the business is "turn the key", kind of like starting a car - turn the key and it goes!
And by the way: Turnkey businesses don't just exist as real brick-and-mortar walk-into-and-shop stores. They exist online as well. Instead of a physical store in a shopping center, for example, the turnkey business online gives you web store already stocked with products, ready to go.
What is included in a turnkey business? Well, usually the franchiser will select and lease the location for you, buy the equipment, and sometimes even hire your staff for you, although that’s not very common anymore. But basically what they do is they make certain that everything is done that needs to be done so that your business is ready to open to the public. For someone who is new to the business world, it can save them a lot of time and headaches.
Here's what's typically included in turnkey business franchise opportunities. The franchisor decides on a location, leases the space, sources and purchases all required equipment, and may even hire staff (though this is less common these days). The franchisor pretty much does all they need to be certain everything is done for a successful opening. This is a silver-platter solution to a new business, especially for someone new to franchise business ownership. A lot of time, money, and effort is saved.
It's a more efficient way to get the business going, and avoids many mistakes and pitfalls, since these are already known by the franchisor from experience, experience the new business owner very likely does not have.
Beware however: Not all turnkey businesses are legit. Stories are plentiful of people who've bought turnkey businesses who realize after the fact they've been scammed. Avoid this by doing extensive research. Talk to other franchisees who invested in the turnkey business. Whatever their experience has been with the franchisor, good or bad, they're likely to tell you.
As for the price of a turnkey business franchise, it's likely to be more than a regular franchise opportunity since so much is provided and done for you that you otherwise would have to do yourself. The premium you pay, however, is usually more than worth the actual extra cost since the time and effort you save allows you to open your doors for business that much sooner.
The turnkey business does offer a risk, but you’ll find that it’s a smaller risk than a regular franchise because you have someone who is an expert and who knows the business providing the things that you need to start up your business. You don’t have to worry about making mistakes.
So, consider a turnkey business as you make your way into the world of business franchise opportunities.
For someone just getting started in a franchise business opportunity, the turnkey business is one of the best options available. Why? Well, with a traditional franchise, the new owner has to do most if not all of the initial preparation work themselves to get the business ready to open. With a turnkey business, everything required to get going is provided.
That's the origin of the name "turnkey business". It's implying the notion that all you have to do to open the business is "turn the key", kind of like starting a car - turn the key and it goes!
And by the way: Turnkey businesses don't just exist as real brick-and-mortar walk-into-and-shop stores. They exist online as well. Instead of a physical store in a shopping center, for example, the turnkey business online gives you web store already stocked with products, ready to go.
What is included in a turnkey business? Well, usually the franchiser will select and lease the location for you, buy the equipment, and sometimes even hire your staff for you, although that’s not very common anymore. But basically what they do is they make certain that everything is done that needs to be done so that your business is ready to open to the public. For someone who is new to the business world, it can save them a lot of time and headaches.
Here's what's typically included in turnkey business franchise opportunities. The franchisor decides on a location, leases the space, sources and purchases all required equipment, and may even hire staff (though this is less common these days). The franchisor pretty much does all they need to be certain everything is done for a successful opening. This is a silver-platter solution to a new business, especially for someone new to franchise business ownership. A lot of time, money, and effort is saved.
It's a more efficient way to get the business going, and avoids many mistakes and pitfalls, since these are already known by the franchisor from experience, experience the new business owner very likely does not have.
Beware however: Not all turnkey businesses are legit. Stories are plentiful of people who've bought turnkey businesses who realize after the fact they've been scammed. Avoid this by doing extensive research. Talk to other franchisees who invested in the turnkey business. Whatever their experience has been with the franchisor, good or bad, they're likely to tell you.
As for the price of a turnkey business franchise, it's likely to be more than a regular franchise opportunity since so much is provided and done for you that you otherwise would have to do yourself. The premium you pay, however, is usually more than worth the actual extra cost since the time and effort you save allows you to open your doors for business that much sooner.
The turnkey business does offer a risk, but you’ll find that it’s a smaller risk than a regular franchise because you have someone who is an expert and who knows the business providing the things that you need to start up your business. You don’t have to worry about making mistakes.
So, consider a turnkey business as you make your way into the world of business franchise opportunities.
Business Franchise Opportunities | Business Plan Overview
Basics of the Business Plan to Help You Succeed With Your Business Franchise Opportunity
If you are just getting started with your first business franchise opportunity or you're a seasoned pro with several franchises under ownership, a solid written business plan can not only help you get started and operate the business, but in many situations it's required.
Help with your business plan is one benefit many franchisors provide to their franchisees. On the other hand, you may be left on your own to develop your own business plan. But you'll still need to approach your franchisor since some parts of the plan will require information that's only available from them.
The business plan is extremely useful as well to you personally as it literally can help you plan to get your franchise business started and help keep you on track as you run the business.
I'm not going to go into great detail here; the purpose of this post is to provide an overview. With that in mind, your franchise oppotunity business plan should have the following key components:
Abstract
This is the prologue to your plan. Here you discuss briefly the scope and purpose of the business plan.
Summary
The business plan summary section includes a description of the company and related information about the business.
Franchise Overview
In this section, the franchise is discussed. You can include an industry analysis here as well, describing how the franchise fits within the overfall industry.
Market Analysis
Here you write about the current market and competition your franchise will be up against.
Marketing Plan
The strategies you plan to use for marketing, advertising, and promotion are covered in this section.
Management
Here you discuss the background and qualifications of you and/or your management staff and other key business operations personnel you plan to have in the business.
Financial
Discuss your financial plan and projects in this section. This includes proposals and forecasts for revenue, profit and loss statements, cash flow statements, and balance sheets going out two to five years.
Exhibits
In this section, include all supporting documents needed for the various sections of your plan.
Starting and running a business franchise is no different from a "traditional" non-franchise business in terms of learning, understanding, and using proper business fundamentals and personal skills.
Business franchise opportunities give you a tremendous head start in terms of starting a business, but you still need a business plan to help you make critical and prudent business decisions before, at, and after the start up phase.
If you are just getting started with your first business franchise opportunity or you're a seasoned pro with several franchises under ownership, a solid written business plan can not only help you get started and operate the business, but in many situations it's required.
Help with your business plan is one benefit many franchisors provide to their franchisees. On the other hand, you may be left on your own to develop your own business plan. But you'll still need to approach your franchisor since some parts of the plan will require information that's only available from them.
The business plan is extremely useful as well to you personally as it literally can help you plan to get your franchise business started and help keep you on track as you run the business.
I'm not going to go into great detail here; the purpose of this post is to provide an overview. With that in mind, your franchise oppotunity business plan should have the following key components:
Abstract
This is the prologue to your plan. Here you discuss briefly the scope and purpose of the business plan.
Summary
The business plan summary section includes a description of the company and related information about the business.
Franchise Overview
In this section, the franchise is discussed. You can include an industry analysis here as well, describing how the franchise fits within the overfall industry.
Market Analysis
Here you write about the current market and competition your franchise will be up against.
Marketing Plan
The strategies you plan to use for marketing, advertising, and promotion are covered in this section.
Management
Here you discuss the background and qualifications of you and/or your management staff and other key business operations personnel you plan to have in the business.
Financial
Discuss your financial plan and projects in this section. This includes proposals and forecasts for revenue, profit and loss statements, cash flow statements, and balance sheets going out two to five years.
Exhibits
In this section, include all supporting documents needed for the various sections of your plan.
Starting and running a business franchise is no different from a "traditional" non-franchise business in terms of learning, understanding, and using proper business fundamentals and personal skills.
Business franchise opportunities give you a tremendous head start in terms of starting a business, but you still need a business plan to help you make critical and prudent business decisions before, at, and after the start up phase.
Franchise Opportunity | How To Start A Franchise - A Quick Guide For Beginners
Beginner's Quick Guide To Start a Franchise
If you're just getting started in business for yourself and looking into franchises in particular, you need to do your homework. Solid research is key to getting started on the right foot. This beginners quick guide to franchise opportunities will get you going in the right direction. And the best place to start your research? The Internet.
Franchise Trade Associations
Look online for trade and business associations geared specifically for franchise business owners. One example is The International Franchise Association (IFA) is a membership organization that contains information to franchisees, franchisors and suppliers to help you with all aspects of franchising. With a database of over 800 franchise opportunities for you to consider and complete step-by-step guides for beginners, this is a great place to start your learning.
Franchise Opportunities Websites
There are a number of comprehensive websites that offer lists of franchise opportunities for sale.
One such website is Bison.com. It's designed for people who want to get serious about their franchise opportunities. Use their search feature to find the business franchise you desire. Read their ratings and reviews of various franchises, browse their franchise directory, get franchise advice and free consultation, read the latest news articles about franchising, and join the franchise financing forum.
Another website to look into is FranchiseDirect.com. This too has a ton of information about franchise opportunities for beginners. Included is a searchable dirctory of business franchise opportunities for sale and the ability to browse hundreds of franchises by industry category.
Top Beginner's Tip: Look at Existing Franchise Businesses
The best franchise opportunity for a beginner is probably one that is an already set up and establish business in which all you have to do is take over ownership. There is much less involved in this type of franchise and you don’t have to worry about set-up at all. You can just delve right into the business of running the franchise. Some popular examples are:
Key Points to Consider When Choosing a Franchise
When choosing a franchise for yourself as a beginner, here are some things you should find out about the potential franchise:
So check out the franchise business organizations, key websites, and know the basic items to look at when deciding on a franchise. For a beginner looking to start a franchise, these steps are vital.
If you're just getting started in business for yourself and looking into franchises in particular, you need to do your homework. Solid research is key to getting started on the right foot. This beginners quick guide to franchise opportunities will get you going in the right direction. And the best place to start your research? The Internet.
Franchise Trade Associations
Look online for trade and business associations geared specifically for franchise business owners. One example is The International Franchise Association (IFA) is a membership organization that contains information to franchisees, franchisors and suppliers to help you with all aspects of franchising. With a database of over 800 franchise opportunities for you to consider and complete step-by-step guides for beginners, this is a great place to start your learning.
Franchise Opportunities Websites
There are a number of comprehensive websites that offer lists of franchise opportunities for sale.
One such website is Bison.com. It's designed for people who want to get serious about their franchise opportunities. Use their search feature to find the business franchise you desire. Read their ratings and reviews of various franchises, browse their franchise directory, get franchise advice and free consultation, read the latest news articles about franchising, and join the franchise financing forum.
Another website to look into is FranchiseDirect.com. This too has a ton of information about franchise opportunities for beginners. Included is a searchable dirctory of business franchise opportunities for sale and the ability to browse hundreds of franchises by industry category.
Top Beginner's Tip: Look at Existing Franchise Businesses
The best franchise opportunity for a beginner is probably one that is an already set up and establish business in which all you have to do is take over ownership. There is much less involved in this type of franchise and you don’t have to worry about set-up at all. You can just delve right into the business of running the franchise. Some popular examples are:
- Subway
- Curves
- Jackson Hewitt Tax Services
- UPS Store
- 7-11 Convenience Stores
- Duncan Donuts
- Sonic Drive-Thru
Key Points to Consider When Choosing a Franchise
When choosing a franchise for yourself as a beginner, here are some things you should find out about the potential franchise:
- What kind of experience is required?
- How much time and commitment is required to run the business?
- What is the background of the franchisor and their history?
- Are you able to obtain information on how other franchisees in the system are performing?
- How much will it cost you upfront? Are there recurring charges and fees?
- What products or services are you required to purchase from the franchisor?
- What are the contract details and obligations?
- What are the terms and conditions on getting out of your contract?
- Are you able to obtain current financial information about the system?
So check out the franchise business organizations, key websites, and know the basic items to look at when deciding on a franchise. For a beginner looking to start a franchise, these steps are vital.
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