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Planning and Paying
By now, you might be asking yourself how on earth you’re supposed to pay for this. It’s true that a good share of the start-up funds will come have to come from your available capital, but there are ways you can raise money for your initial investments.
Banks are generally quite willing to lend money for franchising. Franchises, unlike other business ventures, are quite stable because you’re working with a proven business plan. You can already demonstrate that your business has been successful in one area, and you’ve established yourself as a reliable businessperson. For these reasons, banks like franchisors. They are a relatively secure investment, and you will probably have no trouble getting a bank loan.
Banks do want to see a business plan, however, so you have another document to deal with here. Business plans are like the sales prospectus but with all the unimportant information stripped away. Banks want to know how your business is doing financially, how you plan to continue that, what you think your profit will be from the franchise, and how the franchise will work. They don’t care about your company’s history or product; they are in the business of finance, and that’s what your business plan should address.
Some things to include in your business plan are:
· Anticipated costs and spending (give a conservative estimate here: remember, your goal is to make your business appear a worthwhile investment).
· Cash flow forecasts
· Evidence of past financial successes
· Evidence that you’ve planned for the future and have a financial base to fall back on (i.e., that you’re not going to default on your loan)
As stated, franchises are generally secure investments, and banks will be happy to assist you. Obviously you should avoid loans as much as possible, but starting a franchise can require a significant amount of start-up capital, and you may need the assistance.
How
To Franchise Your Business Info Guide
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