Embracing your entrepreneurial spirit doesn’t always mean having to start a business from scratch. Many newbies, as well as experienced entrepreneurs see franchising as an opportunity to mitigate risk, capitalize on national advertising, tap into a proven system and leverage the collective power of other franchise owners in an ever changing and challenging market place.
If you’ve ever considered franchising here are a few points to consider.
An important first step in this process is taking a franchise ownership self-test like the one at www.franchoice.com. There are a number of characteristics that virtually all franchisors look for in prospective franchisees. You can rate yourself on your strengths and weaknesses including where you stand with respect to your own credit and finances. Nowadays lenders and investors alike are looking for nothing less than A1 credit and want to see that the potential owner has a significant amount of savings to contribute towards the founding of the franchise. The days of 97% financing are long gone.
Every franchisor is going to expect their franchisee to come to the table with varying amounts of seed money based on the opportunity. Don’t be concerned if you don’t have all of the cash immediately laying around in your primary checking account. There are a number of ways to finance your franchise. One alternative is to apply for a loan through the Small Business Administration who is known for typically providing the lowest payment plans around. You may also want to try www.Boefly.com. The site was recommended as the #1 Marketplace for franchise lending by the International Franchise Association. They offer a free Fundability Report in order to help would-be franchisees discover how fundable they are to franchisors based on the credit preferences of over 2200 brands. And the great part is the report will give you tips on what you can do to look more attractive.
While passion is important when seeking out a franchise opportunity, one key factor which often gets overlooked is your personality and lifestyle preferences as owner. That’s why using a site like www.franchisemart.com can help you match your personality with the right opportunity. You may be passionate about the food service industry, but if the standard requires 24-hour operation or remaining open on holidays, you have to ask yourself, “Does this really fit my lifestyle?”
Remember this is not about “falling in love” with a business at first sight. Take the time to learn about the details and nuances of the opportunity in order to fully understand its potential. Don’t make a determination just based on just what you feel. With enough research, you’ll know intellectually if you are making the right choice.
Patrice C. Washington is the Wisdom & Wealth Money Maven at www.PatriceWashington.com and author of the series, Real Money Answers. Follow her on Twitter at @SeekWisdomPCW for practical tips on wisdom, wealth & business.