Tips on Securing Funding to Start Your Business
Congratulations, you have identified a franchise that fits your skill set, your experience, and your passion. That is an excellent and critical step, but there is still a bit of work to do when starting a franchise. One important step is to secure adequate funding for your new company. This can only be done by doing some research and putting together a strong business plan to show investors and lenders you are serious and know what you are doing. At Best in Class Education Center, we help you identify sources of funding and provide other areas of support. Here are a few vital steps to take.
Develop a Sound Business Plan
A business plan is an essential document when looking to make a franchise investment. This not only helps you know where you stand but also provides vital information for investors, as well as the franchisor company you are hoping to buy into. A business plan is often a key to raising capital. Each plan is different, but it usually contains these elements:
- A market analysis
- An executive summary
- A managerial blueprint
- A demographic study of potential clients
- A marketing plan
- Financial projections
If your plan shows there is a need for your services, and there are paying clients available, you may find it easier to get funding. If not, it may be difficult to raise funds.
Know Your Costs
You should also pinpoint the costs of the franchise such as the franchise fee, startup costs, and royalties you will be charged. This is the cost of your investment. You may also have to meet minimum requirements for liquid capital as well as total net worth.
Look for Lending Sources
Once you have a viable plan in place and are dealing with a successful franchise company, you will need to look for appropriate funding. You have several options. You can go to your local bank and ask for a traditional business loan. This is the most common avenue available to small and midsized companies. Another opportunity for lending is going through the Small Business Administration. This route is often easier to qualify for but may require more work on your part.
A third route is to work with your franchisor, as it may have a relationship with lenders. This can be a promising pathway to funds that will cover startup costs, fees, and other expenses. Finally, venture capitalists, crowdfunding, and other sources may also be available.
Starting a franchise with Best in Class Education Center begins with a vision and then moves on to finances. Contact us today to learn about how we can support your application.