How to Save on Franchise Start Up Costs
It’s finally happening! Your dream of becoming an entrepreneur is within your reach. You just purchased a franchise and the documents are about to be signed. However, the start up costs you’re about to spend and will spend is already weighing you down, creating financial pressure.
All businesses require money, that is a given fact. In franchising, you are bound by the agreement set by your franchisor but there are other areas where you can have full discretion. This includes maximising your resources and possibly making some sacrifices to reduce your start up costs.
How do you think you can cut some costs wisely without distorting the chances of expanding your business? Below are 4 ways you can reduce your start up costs without compromising your franchise’s opportunity for growth.
Start up Costs Saver #1: Leasing of Equipment
Instead of opting to buy brand new equipment and tools for the business, you can choose to lease them, minimising your asset risk. Aside from saving money, leasing has other potential benefits to you. It preserves your hard-earned capital, provides flexibility in your budget and presents the opportunity to return, upgrade or replace equipment when necessary or when you have more funds, saving money on start up costs.
Start up Costs Saver #2: Hire the Right Employee
When looking for staff to fill job positions, consider the quality of the applicants. Remember that they will become part of and will represent your company so considering their overall character and experience when making a decision. Investing in people who have experience working may be more costly upfront but will increase your ROI in the long-run than hiring younger, casual staff. Experienced staff members already have developed keen sense of responsibility and experience you can leverage to create good customer service that can increase your loyalty following, building a steady source of revenue. At the end of the day, you have to make sure your staff are working harmoniously with everyone and they live by your company values and policies.
Start up Costs Saver #3: Maintain An Employee Record
Keeping and maintaining an employee record is both a preventive measure and a good practice. Failing to have employee record actually has repercussion in the form of penalties from government regulatory bodies. That could mean a lot of money and could cost you to lose your business. On the other hand, it a good practice to have an employee record where you can list your staff’s details and evaluate their performance and productivity. This way, you can keep track of their progress and can help prevent and protect yourself if any employee disputes arises.
Start up Costs Saver #4: Forget About Perfect, Choose The Right Site
Choose a location that will give you your return on investment. In order to achieve this, you need to have a thorough understanding about your business. There are a lot of things to consider – your target market, target location and sales required to cover the cost. To save money, you should consider progressing areas and high-street locations where you can have direct negotiation with leasing agents. Placing your business in an up-and-coming area instead of an established may save you in startup costs such as rent and bring potential success in the future.
Saving on your startup costs can bring long-time benefits and will help you make good use of your financial savings but it still requires extra work and some expertise. It might be wise to ask other franchisees for some valuable advice. As a new franchisee, it is understandable to be excited but take your time as you start this entrepreneur journey.
Ready to start your franchising journey? Find out how at www.lookingforafranchise.com.au