Now then, with that example of the federal government, & realizing it is not actually a business, you can understand a number of the situations that franchise buyers get themselves in to. Right now, lots of people are out of work, & they are getting towards the finish of their rope. They cannot receive a home equity loan, but they do qualify to receive a small business loan, as they have saved their credit through this recession. To that, I say lovely for them, but be cautious what you wish for because there is much more to the cost of a franchise, than the franchise fee, & the equipment it takes to establish your business.
Many folks try to buy a franchise, & they figure out what the cost is & they round up the resources they need to buy a franchise opportunity. That is all well & lovely, but often they don't figure in the immense money flow it takes to get going, & the length of time necessary to get their operation in to a profitable situation. You cannot run a business & lose money forever, perhaps something our federal government needs to think about as they work through the debt deal negotiations, as they are borrowing 40% of every dollar they spend currently.
As a former franchisor, thing that always bothered me was watching franchisees scramble & scrape money together from relatives & friends & loans to get in to their new business. I always worried about that, because I knew that they might be digging themselves in to a hole they could not get out of. The business I franchised was mobile carwash trucks, which would go out & wash cars & fleets of vehicles. In lots of parts the country it was a seasonal business & it very much mattered when the franchisees started their new franchise, as to when they might get themselves in to a positive money flow.
Also, you are beginning a franchised outlet in the work of a recession you ought to also think about the reality that sales might be slow for some time. Secondly, they don't know if they are going to slip back in to recession in another 15-months or so meaning you could find yourself without a positive money flow for two to three years. In fact your business may fail in case you don't have those resources obtainable for your new business.
That is of the examples & challenge our company had, but every industry is different, with its own set of challenges, even if right now all businesses are dealing with less than strong GDP growth, & a slowing of consumer dollar flow. Indeed I hope you will think about all this, & recognize these words come from experience, I don't need to see you make a daft mistake which will finish up costing you dearly. think about all this & think on.
Many folks try to buy a franchise, & they figure out what the cost is & they round up the resources they need to buy a franchise opportunity. That is all well & lovely, but often they don't figure in the immense money flow it takes to get going, & the length of time necessary to get their operation in to a profitable situation. You cannot run a business & lose money forever, perhaps something our federal government needs to think about as they work through the debt deal negotiations, as they are borrowing 40% of every dollar they spend currently.
As a former franchisor, thing that always bothered me was watching franchisees scramble & scrape money together from relatives & friends & loans to get in to their new business. I always worried about that, because I knew that they might be digging themselves in to a hole they could not get out of. The business I franchised was mobile carwash trucks, which would go out & wash cars & fleets of vehicles. In lots of parts the country it was a seasonal business & it very much mattered when the franchisees started their new franchise, as to when they might get themselves in to a positive money flow.
Also, you are beginning a franchised outlet in the work of a recession you ought to also think about the reality that sales might be slow for some time. Secondly, they don't know if they are going to slip back in to recession in another 15-months or so meaning you could find yourself without a positive money flow for two to three years. In fact your business may fail in case you don't have those resources obtainable for your new business.
That is of the examples & challenge our company had, but every industry is different, with its own set of challenges, even if right now all businesses are dealing with less than strong GDP growth, & a slowing of consumer dollar flow. Indeed I hope you will think about all this, & recognize these words come from experience, I don't need to see you make a daft mistake which will finish up costing you dearly. think about all this & think on.
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