Starting a Business: How to Choose the Best Investment
If you’re interested in starting a business, a franchise is a good option. Previously we have discussed how you can take advantage of franchise opportunities for less than $100,000. But you must choose the best franchise for you. So, where do you begin?
Understanding the Financials
All franchises work similarly. The best franchise for you will depend on your preferences and time commitment requirements, but it’s important to understand where your money is going.
- Franchise fee: This is a one-time fee you pay from the get-go. It’s your ticket fee for entry.
- Initial Investment: These are the particulars, covering leases, construction costs inventory and anything else needed to get started in a franchise.
- Ongoing investments: These are the funds you will need to stay in business. These include any royalties that need to be paid to the franchisor for the continued use of their systems plus marketing or advertising fees.
- Financial requirements: Most often, a franchisor will require franchisees to have a minimum net worth and liquidity. The point of this is to ensure that you as a franchisee have enough money to keep your business running smoothly until profits begin rolling in.
If you don’t have the cash to cover this investment but know this is a good option, you can consider going in with a business partner, applying for an SBA loan, applying for a commercial bank loan or seeing if your franchisor deals with third-party lenders.
How to Choose the Right Franchise Opportunity
The caveat here is to do your homework and look for something you enjoy. No sense in purchasing a home painting business if you’re more of an accounting person. Find a category that aligns with your interests, your abilities and your wallet.
Once you’ve made the decision, it’s time to review franchise paperwork and evaluate the growth of the brand. Here are some things to consider:
- Are new locations opening?
- Have locations closed and, if so, why?
- What is the expected revenue growth and is the customer base improving?
- How much assistance will I be getting from my franchisors?
- Do they actually have the expertise to guide me?
- Will I have all the tools I need to grow?
- Do I want a more hands-on or hands-off approach?
You will learn much of this from the franchisor and their franchise disclosure document (FDD). This provides pertinent information about the franchisor and clearly outlines the relationship between the franchisor and the franchisee. Talking with current franchise members to glean their perspectives about the brand is another great way to determine if you would be a good fit with this franchise.
Do Your Due Diligence
Once you are serious about a particular franchise, your next step is to go through the application and interview process. You are being sized up as a potential franchisee as much as you’re researching them. The franchisor wants to be certain you will be a good fit for the brand.
Here are a few more items to think about before making that franchise decision.
- What are your goals in business and your personal life—will this franchise opportunity allow the balance you’re looking for?
- Do you like the idea of being the boss?
- Would you like to manage a few employees or work alone?
- Do you like the idea of working from home, or would you like a brick-and-mortar location?
- What are your strengths, and does the franchise you’re choosing fit into that?
RSVP Direct Mail Advertising Fits the Criteria
At RSVP, our direct mail marketing franchise opportunities are available for $100k initial investment which includes you $15k franchise fee. Our model allows you to work from home and control your own schedule throughout the work week.
As a franchisee, you’ll run an appointment-based direct mail marketing franchise with no weekends required, no equipment or inventory needed, and minimal overhead. Our B2B business model offers franchisees a steady sales stream, and we support clients throughout every phase of the process.
If you’re considering starting a business, then contact RSVP Direct Mail Advertising today to learn more about our direct mail marketing franchise opportunity.
