By sprokop
When we talk to clients about their concerns of getting franchise financing in Canada they also want to focus on whether the cost to finance that franchise is in effect a good ‘ return on investment ‘, in relation to both their own personal investment in the business as well as ongoing returns on that equity based on the ongoing profits of the business and the risk involved in this type of business, i.e. franchising!
The amount of capital you need to raise relative to your franchise loan varies in Canada. Factors that are critical here are the amount of capital that in some cases your franchisor might insist you put into the business. Another key factor is of course the amount of funding you are able to raise based upon your own personal financial situation, one factor of which is your personal credit rating. Clearly the majority of franchises in Canada are regarded as ‘ small business’ so it makes sense that the banks and other firms that participate in franchise financing are focusing on you personally as well as your overall business prospects.
Canadian chartered banks, contrary to popular opinion, do participate in franchise financing in Canada. In fact in our opinion you could call them the major lender to the industry. But what many clients don’t understand when looking for franchise financing in Canada is that the bank lending in the franchising industry is done under the auspices of the Government Small Busines Loan, which is perfect suited to the type of financing you probably need.
So how much do franchises cost. We can safely say that they range in price for very nominal amounts such as 10k or so for a small service based franchise to millions of dollars for such large brand names… think ‘ golden arches’ as an example .
Cost factors of your franchise vary with respect to how well your franchisor is doing in Canada, or perhaps it’s often the case of a franchisor in the U.S. who wishes to expand or introduce their presence in Canada.
We mentioned the government small business loan as a prime source of financing for the cost of your franchising proposal. This loan actually maxis out at $ 350,000.00 but in our experience that amount finances a huge amount of the franchise opportunities in Canada. They are great loans because they offer sensible maturities of 5-7 years, solid interest rates and nominal fees attached to the overall financing. The initial franchise fee itself is not financeable under the program, so typically our clients fund that portion themselves, which of course counts as their overall equity,
It’s important to start sourcing your financing for your new franchise early on in the process. The bottom line, it’s never too late to start looking at your financing options available, including our aforementioned SBL loan.
So where does the capital come from relative to your own investment in the business.
Typically we see these funds coming from a clients own personal savings. That might also come from a severance situation based on the clients exit from ‘ corporate life ‘. In some cases you may choose to collapse savings, registered, or otherwise.
We encourage customers to understand the concept of financial leverage when it comes to R O I, or return on investment. Measure risk against reward; ensure you can withdraw a reasonable amount as a salary from the business, based on your financial projections.
And that ROI! Compute and analyze it just as you would any investment, such as a stock. Let’s say something costs 100% and you earn a 6% dividend. That’s generally a reasonable amount. So if you sell that investment 12 months latter your ROI is 6%. Think of that stock as being your business and the dividend being your business profits. Measure risk and reward and factor in the time and commitment you need to make into the business.
Franchising financing in Canada can be as difficult or easy as you make it. Speak to a trusted, credible and experienced Canadian business financing advisor who is expert in financing the cost of your franchising. And here’s to your great, hopefully, Return on Investment!
By Victorina Bratton
Females in the business globe nowadays have the very best options to succeed at their own organization. How numerous options offer an effortless, entertaining and worthwhile enterprise which also delivers the flexibility to run it from your dwelling, with a phone basis, or from a storefront?
You will discover a variety of women of all ages franchise alternatives which include.
o Personnel services: This franchise presents really expert people to corporations jogging in a professional environment.
o Hair-cutting salons: This franchise is changing the entire way adult men get hair minimize.
o Fitness centers: Franchises which allow females to experience excellent and get pleasure from themselves although supporting people come to feel great much too.
o Organization support provider: Franchises which offer services on the do the job from dwelling industry.
o Home wellbeing treatment: Be the proud manager of you own property health care enterprise.
o Discounted Resort Clubs: This opportunity permits ladies who adore to obtain fun a chance to generally be the proud proprietor of their really own luxury connected business inside the $5000 vary.
o Latest technological advances: Towards the female who loves being of assistance to others, options incorporate internet designing and advertising and marketing, SEARCH ENGINE MARKETING, website hosting and considerably more.
o Youngsters-similar franchises: When you really like kids, you may use your arts and crafts competencies for this sort of franchise.
o Marketing and advertising Cruise Lines: This franchise is excellent for girls who love to vacation. You happen to be offered your incredibly own personal automatic internet site and each of the revenue go into your pocket.
Household Based mostly Franchise Options: Operating a home based business demands tremendous dedication, time management competencies and extra area inside the residence for an business office. Many people who get started residence companies fall short at it since they simply do not know the way to manage their time adequately. Franchises have worked out time management schedules. In the event you know how you can overcome temptations and are hell-bent on generating a achievement of yourself, then look at property-based franchise options.
Most women Franchise Options with Lessen Expense: Many franchise possibilities usually do not involve you to invest an enormous sum for initiating your enterprise. They are ideally suited for girls with little benefits or without any guarantied supply of profits. You can uncover numerous franchise possibilities that don’t involve a huge funds choice.
Franchises which involve Managing Staff: Probably you’d like to supply specialist services, using the ability fixed of other competent specialists? Ideally suited examples contain puppy grooming, hair salons, cleaning or organization services such as technological innovation, tax preparation or finance. Make your choices in accordance with your ability collection.
Franchise options which necessitate Market Knowledge: Many franchise offers goal specifically at folks with prior industry encounter. If that you are among them and would make the company a accomplishment employing your trade understanding, be sure you implement for these gives, because they pay really nicely!
By Daniel Cargille
There are a number of benefits to starting an environmentally friendly business – especially if you’re starting a franchise. Not only will you save money on getting your business launched but you’ll earn the respect of the local community as you strive to improve your carbon footprint. It’s great for positive branding as you prove that you’re a globally and economically responsible company.
Here are steps to help you develop an environmental strategy as you get ready to choose and open a new franchise.
Target Environmental Regulations with your Franchise
Every business in the US is governed by a minimum set of environmental standards and regulations that have to do with trash and cleanliness, drainage, etc. Keeping up with these helps to avoid legal issues but if you want to build your brand and tout yourself as a green business then you need to go beyond the minimum standard.
Create an Environmental Management Plan for your Franchise
When you want to open a business you will more than likely sit down to create a business plan if you haven’t done so already. This typically includes financial and marketing information but it can also include an environmental management plan. This takes into account practical ways to reduce carbon footprint and utilize energy-saving equipment for reduced local impact as well as savings to utilities and reductions in budget. This can be as simple as planning to source food products from local providers.
Build a Green Franchise from the Start
If your franchise requires that you build a new structure to gain the most benefit and local impact with your target audience (or its just a sound decision financially) then you should aim to use green building products wherever possible in the business. This includes better HVAC systems, high-quality insulated windows with Low-e ratings, efficient lighting, solar panels and more.
Buy Green Products
Every business needs supplies, and depending on the franchise and brand you choose to invest in, you may need more than others. Food services franchises for example use far more cleaning supplies than a clothing chain. Make sure you source and buy products that are bio based and non-toxic. Where possible, such as with paper towels, try to purchase products made from post-consumer recycled materials.
Conserve Water
Every business uses water to some degree – but more so for a food-service based franchise. The increased demand on the water supply of our nation is threat to human health as well as the environment. If you implement a water-conservation program you’re working to conserve a precious resource that is in fact limited. Likewise, you cut a general utility cost by a portion through conservancy. You can boost conservation of water by having your local water agency conduct an audit of your systems. Likewise, invest in better technology and water-saving equipment. Lastly, try to minimize discharges of sewer and wastewater.
Make a Green Marketing Strategy for your Franchise
When you launch as a green business or franchise, there is a great deal of potential for building brand visibility – but people won’t know that you’re running a green business unless you tell them. Add those “green” claims to all of your marketing materials and make sure that your customers, vendors and business partners know that you’re working with conservation in mind. People love to do business with environmentally friendly companies.
You should take the time to build relationships with the people and organizations that can help you spread the word about your overall message and goal. Of course you want to turn profits with your business but you should work to share your attempts to help the environment. Not only are industry partnerships a good idea – such as with other business owners – but groups and organizations can help you share your missions as well.
