Edmonton Accounting Firm | Analyze Franchise Opportunity
Often, many people dream about becoming an entrepreneur says Edmonton accounting firm. Because they see it as a way of controlling their own life. As well as being able to accumulate wealth, and give the family things that they were not able to give them as an employee.
And when people start thinking about becoming a business owner. Owning a franchise can seem extremely attractive. Because they can see it as purchasing a business, that already has a known brand. And customers who already like their products and services.
However, while many people think that the value of a franchise is in how well-known the name is. This is not the case. And the value of the franchise is in the systems and the processes that come with it. That can help a business owner learn exactly what they need to do, in order to be successful.
This is why some of the most well-known franchises in Canada. Have such an extremely high franchise fee. Because it is very uncommon to hear about these franchises not being successful. Because they have such well-defined systems and processes.
In fact, while Canadian small entrepreneurs have a 50% failure rate in five years. Statistics show that only 14% of franchises fail in the same amount of time. Therefore, people need to understand that the reason why franchises are more successful. Is not name recognition. But those processes.
This is why Edmonton accounting firm says when people are considering a franchise opportunity. They need to look at multiple franchises at the same time. And while they may not be interested in purchasing the other franchises. Looking at multiple opportunities can help them be very objective.
This will help people understand what comes with the franchise fees. such as understanding if they get marketing campaigns paid for, such as national television, or magazine advertising included in the franchise and royalty fees.
An understanding what systems and processes come with the business opportunity. Because while the power of the franchise is the systems and processes. Not all franchises have all of the same systems created.
Because of that, what might look like a great opportunity on the surface. Is not a great opportunity, when looking at it objectively. Also, business owners should look at things like what the cost would be to have a website, or if that is included in the royalty fees. And if not, how much extra it would be.
Some franchises specify that websites are mandatory, but are and additional fee. And the same with their marketing opportunities. As well as having to use as supplier for packaging. And what might look like a great opportunity, when examined by an Edmonton accounting firm.
They realize that it is not as good an opportunity as they think. And they will spend all of their money on advertising that is mandatory, having a corporate websites ads and exorbitant rates. And having to pay a supplier a large fee. Even if they can get the same products elsewhere for cheaper.
And while there are many great franchises out there. There are also many franchises that have extremely high franchising fees, without the support that business owners need to make them be successful.
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Often, people look at franchises as a way of purchasing into a business says Edmonton accounting firm. And while there are lots of great franchises out there. Michael Gerber, author of the book the E myth said. “If your business depends on you, you do not own a business, you have a job. And it is the worst job in the world, because you are working for a lunatic “
a lot of franchises have a lot of specifications. Saying that owners will work a certain number of hours per week, days per week, or will only take off a certain amount of time. And that is to ensure that they are running the system as it is designed to be run.
However, this is not going to help a business owner have more control over their life. And if that is one of the reasons why they went into business ownership. They might not be very happy. Therefore, business owners should all get help from an accounting firm.
To help them analyse any of the opportunities that they have two buy a franchise. To ensure that what they are hoping to get out of business ownership. Because if they buy a franchise with the hopes of being able to take vacation whenever they want, some franchises might not let them do that.
Another thing that they need to keep in mind, is understanding the royalty fees when it comes to a franchise. Because some people think that a royalty fee is a flat fee. And in some cases it is, but in other cases, the royalty fee is a percentage of overall sales.
Which means if a business owner is successful in increasing the business significantly. They are going to have to increase the amount that they pay the franchise and increasing amount indefinitely for the life of their business. Which may not work for all business owners.
Also, they need to have their accounting firm analyse what that royalty fee is per month compared to their revenue. So that they do not end up buying into a franchise that has royalty fees higher than they can afford to pay.
Especially when keeping the products and services that they offer of the prices that they need to have them at as a franchise. By hiring an Edmonton accounting firm. People who are looking at buying franchises can ensure that the franchise opportunity.
That they are looking at is actually one that is going to help them succeed and come out ahead. The sooner people can bring their Edmonton accounting firm into this opportunity, the sooner they are going to be able to understand if this is the right opportunity for them.
Or if they should look at the next opportunity. Or even consider starting their own business. Because at least with their own business, they are not going to have to pay a franchise or royalty fees.