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Edmonton Business For Sale | Investing In Franchises
Many people believe that owning a franchise is a quick and easy way to get into becoming a business owner says Edmontons business for sale. They seem to believe that there are fewer risks associated with franchise ownership, and while some statistics show that this may be the case, with 50% of all businesses closing the doors to their business within five years, but only 14% of franchisees closing the doors to their business within five years. Even though there is a lower instance of business failure says Edmonton business for sale. 14% failure rate is still significantly high, and entrepreneurs should make any business decision including buying a franchise very carefully and objectively.
When business owners are looking into owning franchises, there are several things that they can do in order to adequately prepare themselves. The first thing says Edmontons business for sale is people should compare multiple franchises before making a final decision. The reason for this is because not all franchises operate the same way, have the same royalty fees, and an entrepreneur should take all of those things into consideration when they are making their purchase. By comparing different franchises to each other, an entrepreneur and get a really good sense of things that are going to be important for them as they operate their business.
Another thing that people should take into consideration when they are buying franchises is that the people that are giving them the information about that franchises are actually the people that are paid to sell the franchise. They may come across as business consultants or business advisors, the Edmonton business for sale says that they are actually commission based sales people. Their job is to sell franchises. Because of that, entrepreneurs should always get a second outside opinion when making this decision. They should understand that that salesperson is going to paint the franchise in as good a light as possible and may even omit vital information in order to make the sale.
The third thing that business owners should take into consideration when they are making the decision to buy franchises is that they should do a business plan right away instead of doing a business plan with the franchise or. The reason for this says Edmonton business for sale is once they are making a business plan with the franchise or, itís likely too late to change their mind. Theyíve probably already paid a deposit or even bought the entire franchise before starting in on their business plan which may either point out errors in their decision-making process, or even made them realize that they would not be able to get financing for the franchise and therefore theyíve spent their franchise fees on a business that wonít work for them. And franchisees are never usually refundable.
By following these simple rules and considerations when looking at franchises as a business option, entrepreneurs can make great business decisions and find the business that is going to help them increase wealth into their future.
Edmonton business for sale says that not all franchises are the same, an accountant recalls the story of three entrepreneurs who brought in a business opportunity that they thought was an incredible opportunity. After the accountant went through the details with a fine tooth comb, they discovered that the franchise or was going to be charging those entrepreneurs an exceptionally high ongoing royalty fee. This royalty fee was higher than they had charged any previous franchisee. After the accountant was able to calculate the effect that that increased royalty would have on the business and on the entrepreneurs, the accountant determined that the return on investment is not high enough to justify the risk. The women did not buy the business, however other investors did by the business and close the doors within six months. Franchises can be an amazing business opportunity says Edmontons business for sale, but due diligence must be practised when it comes to making any business decision.
Something that business owners should take into consideration when considering franchises is that franchises oars often create an increased sense of urgency when they are selling franchises says Edmonton business for sale. The reason why they do this is to inspire entrepreneurs to act quickly in order to close the sale. Something that entrepreneurs need to take into consideration is that if it is truly a great offer, it can withstand some due diligence. No business decision that was worthwhile was ever done without research. Entrepreneurs should take their time and investigates everything necessary in order to make a good decision including financial information with their accountant and researching the franchise itself. If they do miss out on the opportunity because they took time to make a great decision, and it wasnít as good an opportunity as they thought.
The next thing that business owners should take into consideration when they are debating buying franchises says Edmontons business for sale is that not all entrepreneurs can get small business loans for franchises. Unless a business owner has a proven track record, or collateral, the only option available to them may be the Canada small business loan. That can give them up to $350,000 to buy the franchise. This may or may not be enough funding on the franchise. Business owners should have this in mind they approach franchises about the opportunity to work with them in order to avoid trying to buy a franchise that is much larger than they will be able to get financing for.
Another thing to keep into consideration when looking at franchises says Edmonton business for sale is that itís always a good idea to talk to existing franchise owners on their own. While franchises oars may take entrepreneurs to a variety of locations and talk to their franchise owners, entrepreneurs should also talk to the business owners of the locations that the franchise or did not take them to. Chances are they were only taken around to the best and busiest locations. In order to get the sense of an average business, entrepreneurs should take it upon themselves to see other locations themselves.