Franchises have great business models, but it isn’t always to be successful. You’ll need to build a budget to get your franchise started to make sure that you don’t overspend while getting started. You want to start out with enough funding to get you through the first few months while you’re establishing your business. Here are tips for creating a budget for your franchise
Consider the Startup Costs
You’re going to need cash to get the franchise going. Commercial property doesn’t come cheap. You may want to look into renting space in a shopper-friendly and accessible space to get customers instead of looking for a cheaper location. Your budget needs to include remodeling costs, equipment and supplies, and the cost of hiring employees. You may have to hire people before you open to get them trained and ready to work when you are open. Build 10 to 20% into your budget for unexpected expenses. Don’t forget to include business licenses and taxes.
If the startup costs haven’t scared you away, then you’re ready to think about the monthly expenses you’ll have. If you can accurately gauge your expenses, you can project revenue and calculate profit margins, which will help you be more successful.
Add up all the expenses you’ll have each month, franchise fees, rent/mortgage, inventory, payroll, marketing, taxes, utilities, and software. Don’t forget to include your own salary, because you have to be able to pay your bills. It might be difficult to take a salary when you’re not making a profit, but it isn’t a good option to leave out your salary. When you do put it in, it will really throw off your numbers.
Know Your Budget
When you have a good handle on your budget for your franchise, you know what it will take to be successful.
Contact Grecco Capital for lending for your franchise or small business. We’re here to help you grow and succeed.