Edmonton Accounting Firm | Comparing Franchises
Many people are driven to become business owners, and often look at franchises as an easy way in says Edmonton accounting firm. And while franchises can be a great business opportunity. Entrepreneurs need to look at the decision very objectively in order to make the best purchase.
When looking at all of the small businesses in Canada. People may find that there is an extremely high failure rate for small businesses. With half of all of the entrepreneurs that open, failing within five years.
However, some statistics suggest that only 14% of franchises go out of business within the same five-year period. But before people jump to the conclusion that all franchises are going to be more successful. They need to look objectively at the opportunities.
They can do that, by getting help from Edmonton accounting firm. Who will not only help them be objective. But also look at the opportunities from a financial standpoint. To see if they are as good as people think the business opportunities would be.
The first thing that business owners need to understand, is the value of a franchise is not in the name. But in the systems and processes that they sell along with their name. That can help entrepreneurs re-create the conditions that other business owners use to become successful.
Therefore, when they are looking at franchise opportunities. Business owners need to look at the systems and processes that come with them. They can do this much more easily. If they look at several different franchises at the same time.
The better the opportunity is, the better the systems and processes will be. That way, business owner can follow the system to be successful. And then use that same system to hire staff, and teach that same system to them, so that they can grow their business.
Therefore, if there looking at one franchise opportunity, and there are a lot of gaps the comes to the systems and processes. This may not be the best opportunity for someone to purchase. Especially when considering the royalty fees that they are going to have to pay on an ongoing basis.
As well if people are going to want to change the systems or processes themselves. A franchise may not be the best opportunity for them as well. Because they have to pay franchise fee as well as royalties.
And if they want to change the system, they might be farther ahead to not pay that additional fee, and figure out their own systems and processes for their own business.
One thing that their Edmonton accounting firm will also help them do. Is look at the information from a strictly financial point of view. To see if the royalty fees versus revenue makes sense. Because many franchises have such steep royalty, that it is not always in someone’s best interest.
While franchises can have a higher success rate. Not all franchises are created the same. And business owners should know exactly what the business about, before they purchase into it.
When You Are Looking For Help With The Edmonton Accounting Firm?
Buying franchise can often look very attractive to someone who has wants to be an entrepreneur says Edmonton accounting firm. They like the idea, because they are purchasing a familiar name. With products and services that already have a customer base.
However, when people are looking at franchises. They need to consider many different things. Especially including finances. Which is why it is very beneficial. For people to ask Edmonton accounting firm to help them look objectively at their opportunities.
They should ask the franchise to give them accountant prepared financials. So that it can help the accountant look at the specifics of the business carefully. And while the franchise might be happy to supply them with the financial information for their most successful locations.
This is owners should look at how many franchises of that type are around. And ask for the accountant prepared financials for a multitude of those locations. So that they as well as their Edmonton accounting firm can get an idea of what an average location will earn.
They might get some pushback, as the franchise may not want to give up all of this information. But if a business owner is going to purchase a business. They should be satisfied that it makes financial sense to them.
There also more than likely going to get a false sense of urgency from the person selling the franchise to them. Saying that they are going to miss an opportunity if they take too much time making a decision.
but this is a sales-tax big that business owners need to be aware of. So that they do not get sucked into making a snap decision quickly. Without looking at all of the information carefully and rationally.
And, the chances are very large that even if they took all the time that they wanted to make this decision. The opportunity would still exist. And if it did not, similar opportunities would be available.
Otherwise that salesperson would be out of a job quickly. And since their job is to sell franchises. If one opportunity is gone, they would find another opportunity someone was interested.
Therefore, the hiring an Edmonton accounting firm can help a business owner give pushback to someone who is trying to get them to make a decision in a hurry. So that they can end up making the right decision for them. Whether it is this franchise opportunity or not.
In order to help them make that decision. People should feel free to contact franchise owners themselves. To find out what they say about owning the franchise.
Unprompted, they often will have a lot of different information to say. Then what they might say with their head office present. Therefore, if business owners want an honest point about what it is like to own a franchise. They should contact a multitude of franchise owners. And here it directly from them.
Whether a person is deciding to open their own business, purchaser franchise, or purchase any existing business. They need to understand that they need to make this decision responsibly. And ensure that it is the best decision for them.