For many potential franchisees, the fees and costs that come with owning a franchise can turn them away from following through the process of purchasing a franchise. Luckily, there are funding options available for those who need help when it comes to financing their franchise.
One of the more popular sources of loans is the U.S. Small Business Administration. The government doesn’t directly provide these loans but works through its partners to help finance small businesses.
This blog will discuss the most common types of SBA loans, how you can become eligible for an SBA loan and the benefits of these loans.
Types of SBA Loans
Each type of SBA loan has different terms and is designed to help borrowers meet their specific needs. The SBA 7(a) allows borrowers to take up $5.5 million for their financing needs and is the most common type of SBA loan.
If you need help with purchasing equipment or real estate, you will want to consider the CDC/504 loan. For those looking for a smaller loan, the SBA also offers micro-loans of up to $50,000.
You must know what you plan to use the money for as some of the loans mentioned are more flexible than others. CDC/504 loans are meant strictly for fixed assets. Micro-loans also have some restrictions, but the SBA 7(a) can be used for nearly anything.
While the requirements for eligibility may differ somewhat depending on the type of loan you need, there are some general requirements that everyone will need to meet.
For starters, your business must be in the United States. It also must be a for-profit business in an eligible industry, and you must prove that you have a genuine need for the loan. A good credit score and a history of investing in your business may also be required by lenders.
Benefits of an SBA Loan
A big reason for SBA loans’ popularity is the amount of money that can be loaned out. You could take a loan of up to $5.5 million depending on what your business needs.
Of course, if you are going to take a loan, then will need to repay the money. When it comes to SBA loans, you will benefit from having a longer timeframe in which you must repay the loan. You also have access to resources to help support your investment, such as seminars, courses and networking events through the SBA.
If you are ready to leap into the world of franchising, get in touch today!
Every franchisee wants to turn his or her franchise into a successful business that benefits its community. But as with every industry, there are pitfalls that franchisees must look out for. One that is common in the franchise industry is referred to as the “coattail effect.”
In franchising, the coattail effect refers to a situation where franchisees who are prosperous and doing well may be forced to shut down due to the failures of franchisees who own a franchise of the same brand. Customers may have bad experiences with a franchise of a specific brand, and then that stigma spreads to all of that brand’s franchises. It’s an unfair situation, but luckily, there are ways to overcome it.
Below are three methods that may help franchisees to beat the coattail effect.
Change Up Your Business Strategy
One way to avoid the impact of the coattail effect is to change your business strategy. If you are following a similar strategy that has led to the fall of franchises like your own, then you should look to switch up what you are doing. Take the time to thoroughly look over your current business strategy to find areas where improvements can be made.
Once you have identified weaknesses in your current business strategy, you can change them and present them to your team, and then eventually start to implement them in your day-to-day routine.
Amplify Your Marketing Efforts
Your customer base is vital to the health of your franchise. If you are worried about the coattail effect harming your standing with your customers, you should consider giving your marketing strategy a boost to let your customers know your franchise is still trustworthy. The better you can communicate with your customers and assure them that nothing has changed, the more likely they are to come around.
This change in marketing tactics could be done through email and social media. You could even offer customer appreciation deals! You will want to do all you can to let your customers know they are valued.
Communicate With Your Franchisor
Your relationship with your franchisor is important for many reasons, but when it comes to dealing with the coattail effect, it’s important that you can communicate any concerns you may have.
Together, the two of you can work on finding solutions to your problems.
If you are ready to start your career as a franchisee, get in touch today to get started with a free consultation!
As a franchise owner, your earnings are directly related to the success of your business. If your business is going through a rough patch financially, you may see the effects of this when it comes to what you earn as the owner. This is a humbling reality that you as a franchise owner should be prepared for.
Luckily, there are many ways for franchise owners to increase their earnings. Some depend on actions taken by the owner, while others focus on employees’ hard work. No matter the method, with a bit of patience, they can help a franchise owner increase their earnings.
It can’t be said enough how much of your success as a franchisee comes down to your knowledge and skills as a business owner. A mix of hard work and the ability to understand the franchise industry can help you increase your business’ profit, as well as your earnings.
It’s important as a franchise owner to recognize when your business needs a change. It could be updating your marketing strategy, offering deals or finding new ways to get customers coming into your store again.
Multiple Revenue Streams
If your franchise doesn’t already have multiple revenue streams, then you should think about making that a top priority for your business. Not only will it help you to increase your earnings, but it will also create a safety net for your business.
If your main revenue stream takes a hit, you will still have the others to fall back on. To create new revenue streams, you should think of ways to enhance your products or the service you offer. What these other revenue streams look like depends heavily on the type of franchise that you own.
Your employees play a vital role in the success of your business. Alongside the quality of the products or services you offer, your employees are a major factor in what keeps your customers coming back.
Employees who can help foster a positive customer experience are employees who customers will take a liking to. This could encourage them to become loyal customers, as well as spread the word about your business.
Are you ready to start your franchising career? Get in touch today!
When you own a franchise, your revenue is of the utmost importance to you. Without it, your business can’t operate the way it needs to in order to be successful.
Every business goes through periods when its revenue dips or stays stagnant for one reason or another. Luckily for franchise owners, there are several ways to get your business to a better place financially.
Depending on loyal customers, updating your marketing strategy and offering discounts are discussed below and are only three of the many methods that can help you increase your business revenue.
Focus on Loyal Customers
Many companies focus on finding new customers to try their products, but one of the best ways to increase your franchise’s revenue is by focusing on the customers you already have. If they are using a few of your services or products but not all of them, then you could try to introduce them to the other services or products that you offer. In an effort to make these services and products more attractive, you could offer them to your customers in a bundle.
It would also be helpful to stay in touch with these customers through newsletters, emails and reminders. It is obvious that these customers trust your company, so reaching out to them before finding new customers makes sense.
Change Your Marketing Strategy
Improving your marketing strategy is another way to help increase your franchise’s revenue. With the help of social media, you can reach so many people. And with platforms like Facebook, Twitter and Instagram, you have the ability to reach audiences even outside of your local area.
It is also important to make sure that your franchise has a website that is easy to find and easy to use. Giving your customers a site to find more information about you, your services and ways to contact you will go a long way.
While you may think that offering discounts would lead to a loss of revenue, it often has the opposite effect on companies.
Choosing certain products to be discounted and providing the discount for a specific amount of time will make buyers want to start purchasing more items. The combination of discounted prices and a strong marketing strategy to get the word out can help you increase your business revenue.
Ready to leap franchising? Get in touch today to get started!
For many entrepreneurs, owning a business is a lifelong dream. Many people are able to make this dream come to life for themselves, but even more are kept from achieving their goal of business ownership for one reason or another.
One of the biggest deterrents for those wanting to operate a franchise is having limited funds or a lack of funds altogether.
Luckily, there are many ways to purchase a franchise, even if you are in an less-than-desirable financial situation. Below are three popular methods for securing funding to purchase a franchise.
Working With a Partner
If you are not in the best financial situation for purchasing a franchise but have a friend or family member who is, you may consider partnering with that person to fund your franchise. You should make sure that you are partnering with someone you not only trust but someone you work well with.
Because he or she will be a partial owner, this means that your partner will be able to make decisions regarding the business. You can work with a lawyer to create all the necessary paperwork to legitimize your partnership.
Using Franchisor Financing
Check with the franchisor of the franchise you are interested in. Franchisor-financing is a common option that benefits both parties. You should know that before you receive funding from your franchisor, you will need to ensure that you meet that specific franchise’s requirements.
It’s also important to know that not every franchise offers the same amount of money. While one franchise may offer a qualified franchisee $50,000, another franchise may offer more or less than that amount. You should find a franchise that can meet your financial needs.
Taking Out a Loan
There are several loan options available to franchisees who are looking for help with funding. While a traditional loan from a bank is always an option, it may be difficult to obtain if you do not have good credit.
This is where Small Business Administration loans can be helpful. It’s easier to qualify for these loans, and the amount of time you have to repay the loan is much longer.
These are just two examples of possible loans, but there are more you can research and choose from.
If you are ready to start your career as a franchisee, get in touch today to get started with a free consultation!
It is no secret that many entrepreneurs pride themselves on being individualistic people, seizing the opportunity to be their own boss and to pave their own way. And while there is nothing wrong with any of that, all business owners can benefit from having a mentor who has been in their shoes before.
Let’s explore three ways that a mentor can help guide and reassure entrepreneurs who are just getting started with business ownership:
Mentors Have Years of Experience
While new entrepreneurs may possess the skills and the hunger it takes to succeed, they lack the experience of those who have been entrepreneurs for years. A seasoned entrepreneur’s experiences can help newer entrepreneurs recognize problem areas within their business before they cause any damage. And younger entrepreneurs can even learn helpful problem-solving and communication skills from their mentors.
It can not be overstated how important experience is when it comes to being an entrepreneur. Taking the advice that your mentor offers can lead to a long career.
Mentors Can Help You Build Your Network
If your mentor has built lasting business relationships over the years, he or she can introduce you to people who could lead to more opportunities for you. This could connect you to higher-ups in a diverse range of industries. Once that happens, the sky is the limit for what you can achieve.
Your mentor will be more likely to share resources with you over someone he or she hardly knows. Building a lasting relationship with your mentor could prove beneficial in many ways.
Mentors Can Keep You Encouraged
As an entrepreneur, there will be days when you question whether what you are doing is the right thing. You may come to a point in your career where business seems to have slowed down, and the spark that you once had is no longer there.
But when you have a mentor, you have someone who has also been down that path and can reassure you that with a plan and hard work, you can find a solution to your problems.