Dreaming of owning your own business can be quite overwhelming. From coming up with an idea, to developing a brand, to getting your operations off the ground… Sometimes it can seem like too much work and put you off starting in the first place. But, have you considered a franchise?
A franchise can be a great way to start working for yourself, with a lot of the hard work already done for you. Buying a franchise lets you skip many of the difficult parts of starting your own business. The branding and marketing have been established, the operation procedures are clearly documented, all workplace policies have been developed, the products and services have been devised. The hardest part for a new purchaser is usually deciding which franchise to purchase, then becoming familiar with the existing foundations. Starting a business from ground zero can be costly when you consider developing and testing your ideas and products, and doing all this work yourself. But when you purchase a franchise, you are not alone. You are trained and supported throughout the process.
If you are ready to start being your own boss and want to take the next step to creating your own success, a franchise might be the right option for you. While not as difficult as starting from scratch, purchasing a franchise is still not easy, and you will need to secure franchise finance, so we have put together this handy three-step guide to help you on your way
❶ Research is key
Don’t rush into your franchise decision. Do some research on the options that are available to you, the industries you are interested in, and the track record of your potential franchisor. Franchising fees vary greatly depending on a number of factors, and you need to be comfortable with what you are paying for. Some established franchises cost a lot, but have a high yield, and include a lot of expenses within the fee. Others may charge much less but offer less support. Think about what you most want in a business, and shop around for the franchise that suits you. A research process that works to match your needs to the business, rather than the other way around, will have a higher chance of success and will be an easier lifestyle adjustment.
Once you know what you want, you will need to research finance and decide how you are going to fund your new project. If the world of franchising is new to you, it is not necessarily advisable to seek finance and complete a purchase alone. The more external advice and assistance you have, the more prepared you will be for any challenges that come your way. Make the most of the services of those who have done this countless times before, and save yourself time and energy trying to bumble your way through the application process alone.
For instance, private lenders can be very useful to engage when preparing your finance application because they are independent that work on your behalf and understand the finance industry extremely well. Moreover, private non-bank lenders are a great alternative to commercial finance brokers, because they offer very competitive rates and don’t work directly for the big banks. Indeed, working with a strong network of partners like institutional lenders, investment banks and private HNW investors, private lenders have often safe and flexible finance options that you should consider. Their extensive network and access to products and services ensures that their clients’ needs are matched with the most appropriate financial solution. Non-bank lenders negotiate for you and securing you the best interest rates and fees. They also have a simple application process with fast approval.
However, make sure you choose a lender you can trust. If you know anyone else who has been through the process before, you might ask for advice on who they worked with, or look for customer testimonials. In any cases, every client’s lending requirements are different and require to be listened carefully in a discussion, in order to provide you the most appropriate lending solution for your specific needs.
Now that you have settled on the business you want to buy and the lender you want to work with, you need to plan out what the future of your project is going to look like. Banks and private lenders are going to want to see that you have a clear vision for your business and will use this to decide whether to approve your finance application.
A business plan is a vital part, not just of finance applications, but of business operations. You can use a business plan template to map your ideal plans towards success and growth. Your franchisor might even have a preferred template they can give you, so be sure to ask. A business plan shouldn’t be rushed. Spend some time working through each aspect and thinking about every alternative, so that when various situations arrive over the course of running your new business, they don’t come as a surprise to you. Your potential lenders will be impressed by a well-thought-out business plan and can discern the difference because they have seen many before. A good business plan will help you secure funds and move onto the next step towards owning your own franchise.
❸ Securing finance
Once you have done your research and have all your plans in place, it is time to apply for finance. This step can be lengthy but doesn’t need to be difficult if you are prepared. Collect your identification documentation, your finance records, and be ready to provide your work and finance history to your lender. Your lender will help you throughout this process, but they need to have the appropriate paperwork from you; unfortunately, they can’t do that part on your behalf! Once your papers are lodged, your lender will see the hard work and coordination that has gone into your application and will be able to recognise that the decision to purchase a franchise isn’t one you are taking lightly. With any luck, they will swiftly approve your application and you will be able to transfer funds to your franchisor and agree on a date to commence handover and begin operations.
Now that you are aware of the steps required to purchase a franchise, you can see that it is nowhere near as fraught as starting a business from scratch but still requires careful preparation. Every decision to change or start something anew can be daunting, but if you ensure that you do your research, have solid plans, and stay organised throughout, you can take a lot of the fear and anxiety out of the process so that you can start looking towards your future with optimism and excitement.