Franchising and Your Financial Game Plan
Franchising and Your Financial Game Plan
1. Be sure you are investing within your financial limits. That does not imply investing 100% of your net worth. It means figuring out how much you can afford to invest. You need to take into account the initial investment and the estimated amount of operating capital you will need until the business sustains itself. You also need to add the amount of money you will need to cover your living expenses until the business can support you.
Most people should not invest more than 50% of their net worth. By maintaining your investment at a level you can afford, you minimize the risk of being overextended.
2. Estimate out how much money you will need.
Hope is not a strategy for success. Do your homework. Speak with franchisees. Find out how much they make, and understand their answers. Do they pay for their Smart Car through the business? How about their spouse’s Mercedes? Wining and dining customers? Home phone bills? What else? This is difficult for many prospective franchisees to figure out. For detailed franchise information on this subject, review Chapter 12 of my book.
When you know what you can invest and what you are likely to make, you need to determine if the franchise you are considering will give you the potential to achieve your financial objectives.
3. Know the price of growth.
First check if the franchise you are investigating is scaleable - not all franchises are. If the franchise is scalable, you’ll need to determine the cost of growth. Growth might mean additional store fronts, more equipment, more employees, etc. You need to be able to estimate how much that will cost. Plug these numbers into your 3-, 5- or 10-year business plan. This will help you determine your long-term potential in the franchise, and will help you determine if you are willing to reinvest some of what you make.
4. Choose how you will deal with the money you make.
When your business makes money, there are three things you can do with the money.
1. Pay down your debt - thereby increasing your future cash flow;
2. Invest in business growth - thereby increasing you future gross income
3. Take the money home - thereby maintaining or increasing lifestyle.
Your preliminary decision on how you will treat the profits should tie into your long-term goals. If you choose to grow the business, you can’t buy a new home or a new boat. If you decide to purchase a new boat, you cannot invest as much in the future growth of the business. This is a zero sum game and you need to know your priorities.
When you own any business it is decisive to understand the financial aspect of it. This is unknown territory for many potential franchisees, but with some studying and a good strategy, you will be on the right track to reaching the goals you set for yourself.
Franchising and Your Financial Game Plan - To learn more about this author, visit Rick Bisio's Website.
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Here are a few tips to help you invest wisely.
1. Be sure you are investing within your financial limits. That does not imply investing 100% of your net worth. It means figuring out how much you can afford to invest. You need to take into account the initial investment and the estimated amount of operating capital you will need until the business sustains itself. You also need to add the amount of money you will need to cover your living expenses until the business can support you.
Most people should not invest more than 50% of their net worth. By maintaining your investment at a level you can afford, you minimize the risk of being overextended.
2. Estimate out how much money you will need.
Hope is not a strategy for success. Do your homework. Speak with franchisees. Find out how much they make, and understand their answers. Do they pay for their Smart Car through the business? How about their spouse’s Mercedes? Wining and dining customers? Home phone bills? What else? This is difficult for many prospective franchisees to figure out. For detailed franchise information on this subject, review Chapter 12 of my book.
When you know what you can invest and what you are likely to make, you need to determine if the franchise you are considering will give you the potential to achieve your financial objectives.
3. Know the price of growth.
First check if the franchise you are investigating is scaleable - not all franchises are. If the franchise is scalable, you’ll need to determine the cost of growth. Growth might mean additional store fronts, more equipment, more employees, etc. You need to be able to estimate how much that will cost. Plug these numbers into your 3-, 5- or 10-year business plan. This will help you determine your long-term potential in the franchise, and will help you determine if you are willing to reinvest some of what you make.
4. Choose how you will deal with the money you make.
When your business makes money, there are three things you can do with the money.
1. Pay down your debt - thereby increasing your future cash flow;
2. Invest in business growth - thereby increasing you future gross income
3. Take the money home - thereby maintaining or increasing lifestyle.
Your preliminary decision on how you will treat the profits should tie into your long-term goals. If you choose to grow the business, you can’t buy a new home or a new boat. If you decide to purchase a new boat, you cannot invest as much in the future growth of the business. This is a zero sum game and you need to know your priorities.
When you own any business it is decisive to understand the financial aspect of it. This is unknown territory for many potential franchisees, but with some studying and a good strategy, you will be on the right track to reaching the goals you set for yourself.
Franchising and Your Financial Game Plan - To learn more about this author, visit Rick Bisio's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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