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How to Find and Assess the Business Part 2

Preparing to meet the owner By this stage you have hopefully had a chance to have a quick look around, and no doubt a number of questions will already be in your mind. Make a list. The agent will have sent you particulars. Having read these, no doubt you will have some general questions. Add them to your list.

5 Questions to Ask the Franchisor before buying

Franchising has become one of the most important and effective business growth strategies in the past quarter century. Although franchise system development dates back centuries to the times when monarchs awarded territories to tax collectors, current franchise business systems date back decades to the Singer Sewing Machine strategy of granting rights to individual business people to sell Singer products in various regions.

How to assess a franchise?

Buying a franchise is like buying any business: you must do your homework. Franchises are not always what they seem. All franchisors begin by sending you an information pack. This pack should set out all the major features of the franchise, and should be carefully read before any meeting is arranged.

What is the cost of franchise and what types of businesses are franchised

What does a franchise cost? There is an initial franchise fee, followed by a commission usually calculated as a percentage of sales.

Looking at Franchises

Buying a franchise can be the right initial business for people who have never run their own business before, but like all business purchases it must be approached with caution and a lot of careful thought. This article will give you a good overview of how to approach choosing a franchise. It is possible to buy a brand-new franchise from the franchisor, or to buy an established one from an existing franchisee who has decided to sell. This article begins by assuming you are setting up a brand-new franchise outlet, and concludes by dealing with buying an established franchise business. Let's deal with the theory first, and then tackle how to check out an individual franchise opportunity to see how good it is in reality.

Presentation and Marketing of the Business

Any new business will take a year to reach its full potential from a running start, and an established business needs a lot of TLC to effect a smooth changeover. So, before you take the reins, make sure you have budgeted adequately for marketing and promotion as a very real expense in the first twelve months. How you elect to market your business depends very much on what you are selling a commodity or a service. But the basics are still the same: to put your business in the face of all your potential customers and make it stand out from the rest.

VAT - an Overview

Value Added Tax is a very wide subject which, in its detailed implementation, affects different businesses in different ways. It is not, therefore, possible to present a complete guide here and you should take expert advice, normally from your accountant, to check how it applies in your case. However, the basic system is always the same, and the following is an overview of the general principles which will give you a good understanding of how it works.

Paying for Stock and Debtors

Stock is changing on a day-by-day basis, so it is normally paid for separately on the day of takeover when it is normal to bring in an independent firm of stocktakers to do a full stock take and calculate value.

Arranging Contracts

Unless the transaction is very small you will need to appoint a solicitor to act for you, in very much the same way as for buying a house.

Raising debt finance

There are many ways of arranging business finance apart from going along to your local high street bank. For anybody who is not particularly financially aware, some good advice is going to be needed. However, bear these two very important overriding considerations in mind from the start: • Financial institutions lend money because they are confident in the ability of the people running the business. • Financial institutions these days are fiercely competitive for good business.

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About the Author: Timur Sultanov

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More from Timur Sultanov
Types of Finance
Presentation and Marketing of the Business
Paying for Stock and Debtors
Choosing your premises
5 Questions to Ask the Franchisor before buying

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