subject: Before You Buy A Franchise, Understand What You're Doing [print this page] People come up with many reasons not to go into business on their own. They don't have the necessary capital, it is too risky (people may not want to purchase the product) or they have no idea how to run a business. However, another viable alternative is to buy a franchise, as start-up help, support and training are provided with a franchise business opportunity. Many see franchising as a way to help increase their income and improve their lifestyle, and as a result, many people are dipping into their savings or pensions and investing in this type of operation.
The experts advise that people ought to consider buying an established formula. An existing franchise that is successful will make it easier to dodge most of the obstacles or problems that may transpire if you were to start an enterprise from scratch. That is where having the right franchisor comes in. Everything is already established, from branding to marketing to the choice of vendors, as opposed to starting up a business where you will almost certainly not see any income for a while.
Before you decide to buy a franchise you may want to think about buying one from a large chain. Sometimes they will offer assistance in financing, either through in-house financing or they may have a relationship with a lending company that will make it easier for you to obtain the money that you need. If you do not have to worry about securing a loan for your business, then it is much easier to concentrate on other important matters.
But if you do have to secure a loan, then bear in mind that obtaining an SBA loan tends to be a good idea, as they give extended terms at competitive rates. If you are purchasing a franchise, your loan application is often viewed more favorably, as they tend to be a better bet for the SBA. They also have a list of franchises which have gone through a review already, which allows them a far quicker turnaround time when you are waiting for approval.
It is important to know the ins and outs of franchising. You may be the boss when you buy a franchise, but you also have agreed to abide by the company rules and regulations. This also enables you to take advantage of the support system and training that are part and parcel of this kind of business investment.
by: Don Richards
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