One of the easiest ways to succeed in business is buying a franchise because the franchisor has already established the business model and essential partnerships. To become a successful franchisee, you must ensure you have the proper funding secured for all your startup costs and cover bills while gaining momentum.
Talk To the In-House Expert
Franchisors will usually have financing options for franchisees to help sell and spread the brand to more areas and new markets. Talking to the in-house expert about your options can help give you a good idea of what to expect with franchisor financing and let you know what other options you have available. Remember that the franchisor will consider your financial contribution a sign of commitment, so this funding option will usually only cover part of the costs.
Consider Government Programs
Veterans, displaced disaster victims and others can qualify for grants and loans through government programs, including the Small Business Administration loan programs. Your franchise may be eligible for these options because of the efforts of international groups to support small businesses and startups.
Consult a Business Finance Specialist
Consulting with a financial specialist before starting any business is a good idea. He or she can help you determine which financing options are the best for your business model and growth goals, help you navigate the application and approval processes, and even help you determine how much you will need to get started on the right footing.
Network Your Circle
It is often said that in business, it is not what you know but who you know that counts. The same is true in financing your startups. By networking in your professional and personal circles, you can find angel investors and business partners to help get your company the financing it needs to open. This means learning how to sell yourself as an excellent investment to those in your circle and convince them that you will make them more money than their initial investment.
Never Give Up
It is common in business to be denied the first time you apply for a loan, and in some cases, you will need to have been denied for one financing option to qualify for another. For instance, many SBA loan programs require being initially rejected for a loan before qualifying to have the government guarantee a portion of it to the underwriters. If you give up after the first refusal, you will not likely find the financing you need.
Potential franchise owners will need to secure financing to open and grow successfully. There are several options from the franchisor, traditional banks and even government programs designed to help franchisees succeed.