Edmonton Business For Sale | Buying Franchises
When entrepreneurs are considering buying businesses, thereís many reasons why they may consider franchises says Edmonton business for sale. The reason for this is because the statistics suggest that franchises often have a higher degree of success within the first five years. Industry Canada says that 50% of all businesses go out of business within five years, but only 14% of franchises go out of business within five years. This may be due to a number of factors including brand recognition, product popularity, the systems they have developed in order to operate, or even the franchise help that comes along with purchasing that franchise. But whatever the reason, entrepreneurs can consider franchises as a potentially good investment. They just need to be careful and diligent when deciding which franchise is the right one for them.
One of the first things that business owners should consider when thinking of franchises is is it truly a good option for them. Edmonton business for sale says that if a business owner is not going to use the franchise system, or if you there due diligence they realize that that franchise lacks some systems, franchise is in a good option. Entrepreneurs who by McDonaldís donít want to start selling hotdogs, and if they do McDonaldís franchise is not a good option for them for example. The value of the franchise is a name, the products and the systems in place, so unless a business owner wants to be on board with all of those things, then their best bet may be just opening their own business.
When entrepreneurs are looking at franchises they should also take into consideration that the salespeople that are selling those franchises, are salespeople that make money to sell franchises. They are not a business advisor says Edmonton business. They may create a false sense of urgency, and will give you all of the best case scenarios in all of the numbers from their best locations. Edmonton business for sale recommends that when considering buying franchises, entrepreneurs should also contact existing franchise owners on their own. The reason for that is they often get a different story than the one the franchise salesperson is offering them. Those other business owners will not be prompted, and be very honest and candid. They may even not want the competition that a new franchise brings, therefore their answers may be slightly pessimistic which will give entrepreneurs a much more real view of what looks like to buy that franchise.
Another thing that business owners should take into consideration when considering franchises says Edmonton businesses for sale, is that the information that franchise gives a potential owner is slightly complete. Not only will they give you only the best locations to look at, they will give you plain paper financials which donít include all of the information. An entrepreneur can often ask for accountant prepared financials in order to get an extremely complete look at the finances.
Entrepreneurs are looking at getting into business for themselves, often wonder if franchises are the right option for them, says Edmonton business for sale, how can they determine if they are, and which franchise is the best option. There are several things that entrepreneurs should take into consideration when they are looking at purchasing franchises in order to make the best decision for them.
Michael Gerber the author of the E myth says ìif your business depends on you, you donít own a business – you have a job. And itís the worst job in the world because youíre working for a lunatic!î If entrepreneurs are considering buying a franchise they should consider if they are interested in the franchise because they want to buy themselves a job, or if they want to have a business that they can run. One of the first things that they should consider when looking at franchises is looking at if the ownerís time is accounted for in payroll numbers from the franchise theyíre looking at. Edmontons business for sale says often owners time is not properly accounted for, they draw a salary, but work for more hours than they get paid. They also may have family or friends working in the business either for free for much lower money than they would pay employees, and if this is the case the payroll numbers will be very skewed. Business owners should aim to have a business, not a job. If you are going to be forced into working on that location to make it viable, it may not be the best option for them.
When entrepreneurs are considering franchises, they should understand that those franchise orders will be giving them information from their best locations, an entrepreneur should also ask for financial data from additional locations. The reason for that says Edmonton business for sale is that they will get a better idea of how the franchise is actually doing, not their favourite and largest stores. They should also take into consideration of looking at financials from stores that have been open for many years, to see what the long-term potential will be for that business. They may even want to contact owners from other stores themselves, rather than only talking to the franchises that the franchise or recommends.
When making their decision, entrepreneurs should also ensure that their CPA is reviewing the franchise agreement to help decision. The reason for this is accountant will be able to test the reasonability of the numbers. They will consider looking at royalty fees from multiple locations, they will look at lease agreements, common fees, and determine if the return on investment is high enough to justify the risk. They will think to ask questions that arenít included in the information that was given by the franchise, that can help determine whether this is a great business or not.
Edmonton business for sale says franchises can be a great option for several entrepreneurs, as long as they make the decision that is right for them.