Category Archives: Business Finance

How To Finance Your Franchise Business Opportunity

So you decided you want to fry eggs everyday? You have found the best franchise for you and are really excited about its future and your new business. However, how are you going to pay for it? Many franchises require a significant investment and a large amount of liquid money that many individuals don’t have. Fortunately, there are a lot of financing options available to help you finance your franchise business opportunity.

Please keep in mind, however, that you should consider financing your franchise before you actually get your heart set on a particular franchise. The reason why is that financing can be a challenge and is the most important thing you should consider before actually opening a franchise. So, spend some time researching how to finance your franchise business opportunity to get a better understanding of how the entire process works.

Your Finances

First, you need to determine your financial situation. If you are not in a situation where you can afford to embark on a new business opportunity that may have cash flow issues in the beginning, then you should reconsider buying a franchise at this time. If you are current on all of your bills, have more holdings than debt, and make enough money to live on comfortably while saving then you may be prepared financially for a franchise. If not, then you might want to get your finances in order first. If you are doing well, and have some savings to invest, then a franchise may be a great opportunity for you.

Financing

There is a lot of information that you will need to provide in order to get financing. This includes your financial records from loans and debt payments to account balances and tax returns. Make sure all of this information is up to date and well organized before submitting it for financing approval. The more financial information you provide the easier it will be for lenders to determine your financial situation and subsequent financing options.

Financing by Franchisor

When you buy a franchise many times the franchisor will offer some percentage of financing to help you get started. The franchisor you are working with will heavily influence the financing options. Keep in mind, however, that just because you are buying a franchise and decide to go with franchisor financing the application process will not be any easier or more lenient. Also, you will need to invest some of your own money in the franchise because 100% franchise financing is highly uncommon.

Additional Financing

A Small Business Administration loan is a great option for additional financing for a franchise. Also, most banks are willing to finance successful franchises because they have a proven business model. Private investors may also be another option for financing your franchise opportunity.

Direct Sales Tips: Take Control Of Your Business Finances

Whether you joined your company for the additional income, the fun and products, or the tax benefits, taking the following steps will enable you to get control of your business finances for higher profits and greater peace of mind.

· Control your spending. Write down in advance what you will need for your business in the coming month. First, focus on business essentials such as catalogs and show supplies. Then be conservative for additional expenditures like buying equipment for your office or supplies for organizing.

· Be creative. Necessity is the mother of invention. Find ways to reduce unnecessary expenses by thinking creatively. Invite a prospect to your home for dessert and coffee rather than taking her to lunch at a restaurant. Make long distance calls to customers and hostesses on your cell phone if your plan includes free long distance minutes. Find new ways to save!

· Get Organized. Disorganization not only costs you time; it costs you money as well! Avoid wasting money on too many copies or duplicating forms by organizing your files. In addition, have a place in your wallet and a file in your desk where you place receipts for business expenses. Imagine the thousands of dollars in tax-deductions you may have missed simply because you did not keep a receipt.

· Track every business expense for the month. At the end of each month, total what you have spent on your business. Consultants who are maximizing tax benefits keep two totals: “Essential Expenses” and “Maximized Write-Offs” so they can see the additional benefits they are enjoying from their legitimate home-based business expenses. Write the highest total on the outside of a 9X12 envelope for each month.

· Track your income. List all your income for the month on the outside of the envelope as well. These will include Retained Profits (the 30-36% you keep from each show), Overrides (the amount earned on your team’s sales volume), and Bonuses (kit and volume bonuses).

· Compare income to expenses. Subtract your expenses from your income and evaluate the results. Keep in mind that if you are maximising your tax benefits by writing off every legitimate expenses you would incur whether you had a business or not, you may show a loss that does not truly reflect the profitability of your business. This saves you tax!

· Make necessary adjustments. How can you reduce expenses next month? Are there expenses, such as mileage that you are not taking advantage of? How can you increase your income next month? These questions will help you get greater control of your business finances and give you a feeling of confidence and success!