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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Dr. John OdaJohn Oda Ph.D NLP is a business peak performance expert, an author, and speaker frequently called upon to provide corporate training, workshops and seminars for many companies in the United States. He is an expert in coaching sales and business professionals in overcoming the behaviors and obstacles that may impede their sales results and affect their bottom line. Since 1995, John has created a speaking bureau such topics, which include: time management, sales training, human diversity, leadership programs and etc. He provides companies with a strategic plan to increase their bottom line by over 25 percent yearly. - Visit Dr. John Oda'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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Bernard ReberBack in late 1992, MS Access hit the streets. About that time the company I managed needed new software to handle their growing client base and I decided to try this new product. I had little difficulty writing and adapting a database to suit us and discovered a hidden talent for programming. A business was born. With business studies and 25 years of management experience in three different countries under my belt, I could offer a unique combination of skills and my customers agreed. From these humble beginnings my software 'invoiceit' emerged in 1999 and has since been taken to 49 states (hello Wyoming, won't you join us?), all across Canada and more than 70 other countries. From the very beginning the program included cashbook accounting, the simplest form of keeping financial business records. The Dictionary.com defines 'cashbook' as "A 'book' in which to record money received and paid out". For 'book' substitute 'simple software' and that's what I'm about. Now I have published Simple Accounting, an inexpensive spreadsheet solution which even you can master. For just $14.95 it costs less than a takeout meal! More at http://www.scrambled-card.com/simple_accounting_main.htm - Visit Bernard Reber's Website |
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 Rick Bisio (Visit Rick's Website) As one of the most respected franchise consultants in the United States, Rick Bisio has guided thousands of people to great decisions regarding business ownership and franchising. Rick has owned both franchised and non-franchised businesses. He has bought, sold and invested in businesses and worked as an advisor to others seeking the same. (Full Bio) Mr. Bisio is also the author of the acclaimed franchise book. (Learn more – The Educated Franchisee). The Educated Franchisee is an extension of the work that Mr. Bisio does on a daily basis in his franchise consulting business. In this book Rick freely shares his experiences and advice regarding business ownership and franchising. Rick also authors a monthly newsletter. (Sign up– The Educated Franchisee Newsletter.) Rick is a regular speaker on the topics of business ownership and franchising and currently lives on a small resort island in Florida with his family. If you wish to speak directly with Rick Bisio in order to discuss franchising, please feel free to Rick at (941) 778 4660 or email at rbisio@educatedfranchisee.com. Always remember – there is nothing more expensive than ignorance.
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