It has been estimated that 1 out of every 12 businesses in the United States is a franchise. From fast food to real estate, there is a great deal of money to be made in opening one of these businesses for yourself. While individual incomes vary significantly based on multiple variables, roughly 16 percent of all franchise owners earn $200,000 or more per year (as reported by the Franchise Business Review). Although there are many exciting benefits of being a business owner, the important career decision to open a franchise is not always easy. If you are considering buying a franchise, explore three signs that this could be the right move.
You want to be your own boss
Opening your own franchise carries with it dozens of incredible benefits. One of the most attractive advantages is being your own boss. With 15 million Americans who are currently self-employed (full-time), and this number projected to rise significantly over the next decade, many people have the desire to work on their own terms. Although there are pre-established corporate policies that you will need to follow, you have a much greater degree of flexibility when it comes to your schedule. Long hours are common, but you can make the ultimate say in when you work, when you take breaks, and when you decide to go on vacation.
You have a sufficient amount of cash saved
Even though becoming a franchise owner is a more affordable way to open a physical business, there are a significant number of expenses that are often overlooked. On average, franchise fees alone range between $20,000 and $50,000. In addition to this initial fee, owners must have the ability to pay for inventory, supplies, legal fees, build-out costs, and more. That is why is it crucial to have a sufficient amount of cash saved to cover these expenses. If you do not have all of the funds needed to begin, there are special loans available to help new franchise owners. Since franchise fees and locations vary significantly, there is not one target amount that all prospective franchise owners should have in the bank. To see if you indeed have enough saved, it is best to consult with a financial advisor.
There are great places in your local area to open your chosen franchise
As the old adage goes, “location, location, location” is crucial when buying a franchise. In addition to demographics, some important factors that can lead to the success or failure of a franchise include parking availability, distance from competitors, visibility from the road, rent costs, local real estate taxes, and neighborhood growth. Without having the right physical setting for your new business, it can be a challenge for even the most popular franchises to succeed. However, with a great location, your business has the potential to grow and prosper for the long-term.
The above listed factors are only a few considerations to make when deciding if now is the right time for you to open a franchise. Be sure to use all other information that is unique to your situation (e.g. current commitments, future career goals) to help you come to the best possible conclusion.