Where To Get Money For a Franchise Idea

How often have you thumbed through a business opportunity magazine, noticed a franchise opportunity advertisement, and felt you'd really like to get in on that...if only you had the money? If you're like most who are seeking greater opportunity and wealth, this probably happens with you more often than you care to admit, except perhaps in strictly private conversations.

When the average person sees one of these opportunities, or comes up with a similar idea of his own, the problems of start-up capital may seem formidable. But in reality, they may not be. In fact, just about anyone with a good credit record and an "insider's sense of business" can get the capital he or she needs, whenever it's needed. The secret is in knowing how to put together a proper proposal, and to present it to the right per son. These are the "how-to" instructions we're going to give you in this report.

The first thing you're going to need is a complete business plan. This is a complete and detailed description of exactly how you intend to operate the proposed business. Your business plan should detail precisely the product or products you plan to sell; how you're going to produce or manufacture the product; your costs (inventory costs if you're purchasing them from a supplier); who is going to sell those products for you; how they're going to be sold; the attendant costs; when you expect to recoup your initial investment; your plans for growth or expansion; and the total dollar amount you're going to need to make it all work according to your plan. Your business plan must be detailed - complete with projected income and expense figures - through at least the first three years of business.

Now, assuming you have your business plan all worked out, put together and ready for presentation with your request for capital, let's talk about your capitalization proposal.

First, keep in mind that whenever you ask somebody for money, whether it's for a small personal loan or a large amount of money to finance a business, you're involved in a selling situation. You have to prepare a "sales presentation" just as if you were getting ready to sell an automobile or refrigerator. Within this sales presentation you must have all the facts and figures; you must anticipate the questions and the possible objections of the prospective lender with answers or explanations; and you must "package" it as impressively as you would yourself for an audience with the president of IBM or General Motors.

The more money you ask for, the more "in-the-know" will be the people you want to borrow from, and so the more detailed and organized your proposal must be. This shouldn't cause you too much worry however, because you can hire a CPA to help you put it together properly, once you've got the facts and have a business plan he can work from.

Look at it this way: The more money you request for your business, the more your lenders or prospective investors are going to want to know about you, your planning, and your business. They want to be impressed with the fact that you've done your homework; they want to see that you've researched everything and documented your facts and figures; they want to be assured by your presentation that investing in your business will make money for them. It's just that simple at the bottom line. Unless you can instill confidence in them with your business plan and loan or investment proposal, they're just not going to give much positive thought to your request for capitalization.

So you'll need a balance sheet describing your net worth - the worth of what you own compared to the amount of money you owe. You'll also have to prove your stability and money-management talents relative to how successful you've been in paying off past obligations. If you have had credit problems in the past, get them "cleaned up", or at least explained on your file at your local credit bureau office. Under the law, credit bureaus are required to give you all the information they have about you in their files, and it's your right to correct any errors or enter explanations regarding negative reports on your credit. Do this without fail because prospective lenders or investors will definitely check your credit history.

So, now you have your balance sheet prepared; your credit history organized in a light that's favorable to you; your business plan (with costs and income projected over the coming three years), you're ready to start looking for lenders or investors.

Almost all franchisors offer help in setting up with one of their franchises. Most will go out of their way to assist you in getting the financing you need. Some will lend you the entire amount, with payments coming out of the income they expect you to make from their franchise operation. Many will carry this loan themselves, while others will carry part of it and find you a lender to finance the remainder.

Franchisors have two objectives in mind when they offer franchises to the public: They are trying to expand their operation, thus increasing their profit, and they are trying to raise capital for themselves. Generally speaking, if you have a good credit history, and if they feel you have the necessary business personality to achieve success with one of their operations, they'll do everything within their power to get you in a franchise outlet. Keep this in mind the next time you see an advertisement for a promising franchise opportunity requiring a substantial amount of cash outlay. You don't necessarily have to have all the money. They want you, and they'll help you!

Many people seem to be unaware that most of today's largest corporations started on a shoestring - on borrowed money. Many people seem to feel that unless they've got it all "in hand" in savings, then they'll just have to keep plugging away until they can save up enough to take the big plunge. Nothing could be farther from the truth. Just a quick bit of research will show that 999 out of every 1,000 businesses were begun on borrowed money.

Look to your family and friends for financial help. Approach them in a business-like manner; tell them about your idea or plans, and ask them for a loan. Agree to sign a formal statement to pay them back in three, five or ten years, with interest.

When you have your proposal assembled, you might even want to think of a limited partnership or even a general partnership arrangement as a way to finance your project. In any kind of partnership, each partner shares in the profits of the company, but in a limited partnership, each person's loss liability is limited to the amount of money he initially invested. The truth is, in this kind of a situation, you'll be doing all the work and sharing your gain with your partners, but then it's a fairly sure way to obtain needed financing.

Another common method of obtaining business financing is through second mortgage loans on a home or existing piece of property. Say you purchased a home ten years ago for $35,000, and today the assessed valuation is $85,000, with a mortgage of $25,000 still outstanding. A lender may consider your home to be security or collateral for a loan up to $60,000. In many instances, this is the easiest and surest way of getting the money needed for franchise or other business investment. And, it makes sense; you've got "net worth" available that is doing nothing but sitting there. Take this equity and invest it in a worthwhile business, and you could double or triple your net worth each year for the rest of your life.

Deciding to obtain a second mortgage on your home in order to finance a business opportunity is without doubt a major decision, but if you are sure about your investment project, and are determined to succeed, you owe it to yourself to go ahead. You could incorporate yourself, borrow money from your family through a second mortgage on your home, and protect against the loss of your home through the Federal Home stead Act. The important point here is that all business opportunities involve risk and sacrifice. It's up to you to determine the feasibility of your success with your proposed venture, then decide on the best way possible to proceed.

In every instance where you run into reluctance on the part of a lender to lend you the money you need, explore the feasibilities of "two-name" or "co-signed" loans. You can have the franchisor sign with you, or one of your suppliers, a business associate or even a friend. Oftentimes you can borrow or rent collateral such as stocks, bonds, time certificates, business equipment or real estate, and in this way give greater confidence to the lender in you r abilities to repay the loan. Whenever you can show a contract from someone who has agreed to purchase a certain number of your products or services over a specified period of time, you have another important piece of paper that most lenders will accept as collateral. Still an other possibility might be to get a bank or a firm that has loaned you money in the past to guarantee your loan. They simply guarantee that they'll lend you money in the future if ever the need should arise.

Going straight to you neighborhood bank, applying for a business loan and walking out with the money is just about the most unlikely of all your possibilities. Banks want to lend money, and they must lend money in order to stay in business, but most banks are notoriously conservative and extremely reluctant to lend you money unless you have a "regular income" that "guarantees" repayment. If and when you approach a bank for a business loan, you'll need all your papers in order - your financial statement, your business plan, credit history and all the endorsements you can get relative to your succeeding with your planned enterprise. In addition, it would be a good idea to take along your accountant just to assure the banker that your plan is verifiable. In the end, you'll find that it all boils down to whether or not the bank officer studying your application is sold on you as a good credit risk. Thus you must impress the banker - not only with your proposal, but with your appearance and personality as well. In dealing with bankers, never show an attitude of doubt or apology. Always be positive and sure of yourself. However, don't come on so strong to them that you're either demanding or overbearing. Just look good, know your stuff, and project an attitude of determination to succeed.

Your best bet, in attempting to get a business loan from a bank, is to deal with commercial banks. These are the banks that specialize in investment loans for going businesses, real estate construction, and even venture programs. Look in the yellow pages of your telephone or business directories; call and ask for an appointment with the manager; and then explore with him the possibilities of a loan for your project. One of the "nice things" about commercial banks is that even though they may not be able to approve a loan for your business ideas, they will almost always give you a list of names of business people who might be interested in looking over your proposal for investment purposes.

A lot of commercial banks stage investment lectures and seminars for the general public. If you find one that does, attend. You'll meet a lot of local business people, some of whom may be able to and interested in helping you with your business plans.

When you're looking for money to move on a business deal, it does not really matter where the money comes from, or how it all comes about. It's important that you get the money, and at terms that are suitable to you. Thus, don't overlook the possibilities of an advertisement for a lender or investor in your local papers. Place your ad as well in national publications reaching people looking for investments. Other avenues to seriously consider are foundations that offer grants, local dental and medical investment groups, legal investment groups, business associations, trust companies and other groups or organizations looking for tax shelters.

Basically, it isn't a good idea to go to a finance company or other commercial lender of this type for a business loan. The most obvious reason is the high interest rates you have to pay. These companies borrow money from larger money lenders, and then turn around and lend it to you at a higher interest rate than they pay. Herein lies the means by which they make money from granting loans to you. The more it costs them to provide the money for you, the more it's going to cost you to borrow their money. The only element in your favor when borrowing from one of these agencies is that most will generally lend you money against collateral other lenders just won't accept. Insurance companies, pension funds, and commercial paper houses are not too out of sight with their interest rates, but they generally will not even consider talking to you unless you're requesting $500,000 or more. They'll also pretty much require that your business proposal be backed by the best possible plan.

Finally, the bottom line is this: You must have a well-researched and detailed business plan; you must have all your documents and projections put together in an impressive presentation; and then, you will have to be the one who does the final selling of your proposal to the investor or lender. This means your appearance, personality and attitude, because - make no mistake about it - before anyone lends you any size able amount of money, they're going to want to take a close look at you personally before they hand over the money.

Actually, the different ways of financing a franchise opportunity are as many and varied as your own creativity. The sources of obtaining money are virtually limitless, and available to anyone with an idea.

One word of caution before you jump into any franchise purchase agreement: The price you pay to participate in a franchise operation is not always the total cost involved in getting the business off the ground. With some franchise operations, you may find other costs such as down payments on the purchase of property, building construction costs, remodeling or site improvements, equipment, fixtures, signs, advertising, and training. Virtually all franchise deals require that in addition to the purchase price or the license fee of the franchise, you're required to give a certain percentage of your gross business income to the franchisor, plus extra payments for promotion and administrative costs. Above all else, before you get involved in a franchise, or any business venture for that matter, make sure you've conducted a complete and thorough investigation of the opportunity presented. If it's a good deal, then go with it; but if you have any doubts or feel as though you're getting in over your head, back off and look around for something not quite so ambitious, or perhaps expensive.

There are a lot of good franchise opportunities, and some not so good. It's important that you be sure of what you're investing in, and that you can make money with it. From there, preparing the proper business plan and the necessary financing, while not always a snap, can be done. Now's the time to do it! We wish you outstanding success with your franchise business.

David Barnes (business stratagies)
http://www.workathomecoop.com

rental limo Atlanta .. Lockport Chicago limo O’Hare
In The News:

A Texas company is developing a hypersonic jet, Stargazer, that could fly from New York City to London in under an hour, redefining boundaries of aviation.
Porch pirates are on the prowl this holiday season. Tech guru Kurt "CyberGuy" Knutsson has a number of tips to prevent holiday package thefts.
Fueled by artificial intelligence, CyberDog the robotic dog is designed specifically locate fire ant nests, which are endangering ecosystems.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents
Internet browsers are useful, but they can be dangerous. Clicking on malicious links can direct you to dangerous websites that steal information or infect your device.
Apple's latest iOS update introduces advanced artificial intelligence capabilities, which may be capturing and analyzing sensitive information.
Breach site confirmed 56,904,909 Hot Topic users' data leaked online. Tech expert Kurt “CyberGuy" Knutsson says the company's silence makes matters even worse.
Tech expert Kurt “CyberGuy" Knutsson discusses how an innovative Easy-Way kit turns standard strollers electric, simplifying navigation for parents.
Tech expert Kurt “CyberGuy" Knutsson talks about T-Mobile being hacked in broad cyberattack on global phone and internet companies.
Tech expert Kurt “CyberGuy" Knutsson shows you how to add, customize and manage widgets for quick access to apps and info from your iPhone home screen.
Wrong Google searches can not only compromise your device and personal data. They can also bring law enforcement to your doorstep. Hackers are targeting Google searches.
China's Shanghai Kepler Robotics has developed a new humanoid robot that can carry up to 35 pounds per hand for commercial applications across various industries
Checking your hearing has gotten easier with the new hearing test feature in AirPods Pro 2. You can take reliable hearing tests using your iPhone or iPad.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
Kurt "CyberGuy" Knutsson explains how a VPN — virtual private network — works and how running it can slow down the operation of your device.
The WalkON Suit F1, an exoskeleton developed to help people with disabilities, can actually walk over to a person in a wheelchair, solving a major problem.
ClickFix, a new scam targeting computer users, is on the rise in the U.S. The scam prompts its targets to click on a link to fix a problem.
Skydweller is the world's largest unmanned solar-powered aircraft that can stay airborne for weeks, and even months, without refueling.
The U.S. government said it is investigating after People's Republic of China hackers targeted commercial telecommunications service providers in the U.S.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
Scammers are using increasingly sophisticated ways to lure unsuspecting victims, and some are impersonating an email help desk or support team.
You can unsend or edit your iMessages with the latest iOS updates. Kurt the CyberGuy explains how you can save yourself some potential embarrassment.
Kurt “CyberGuy" Knutsson says there’s been a rise in cybercriminal services using hacked police and government emails to send subpoenas and data requests to U.S. companies.
Kurt “CyberGuy" Knutsson discusses how Axiom Space and luxury designer Prada are collaborating on NASA's Artemis III spacesuit design.

Public Relations: Antidote for Small Business Failure

When small businesses fail, the wreckage is often assigned to... Read More

If You Want Business - Be Consistent

Why does consistency in the message have an effect on... Read More

Small Business Mistakes: Are You Making Enough of Them?

That's right ? are you making enough mistakes in your... Read More

Mobile Car Wash and Cleaning Post Office Jeeps

If you own a mobile truck washing, pressure washing or... Read More

The Perilous Franchise Agreement: What Did You Sign?

Purchasing a franchise has become one of the most popular... Read More

The Key To Success - Choose The Right Partners

Do you promote yourself as offering prompt, reliable and quality... Read More

Tell Me The Reasons Why I Should Believe You?

Have you ever heard the phrase, 'PREPONDERANCE OF PROOF'?I recently... Read More

Electronic Franchise Disclosure and E-Signature Future for Investors

It has been discussed allowing Franchising companies to electronically disclose... Read More

Small Business Failures in America - Cash Flow Issues

We are noticing an increase in the length of time... Read More

Do You Microbifer in Your Cleaning Business?

Microfiber cleaning towels have been around for about ten years... Read More

Are You a Small Business Casualty?

When a person knows and knows not that he knows.... Read More

Preparing to Launch Your Small Business

Small business owners often enter their field with great expectations.... Read More

Franchisor Prospect Checklist Sample Form

Due to the over regulation in the Franchising Industry and... Read More

There Are No Dumb Business Questions, Not!

Q: I'm curious. What is the dumbest business question you've... Read More

Keeping your Business Alive

As long as you eat and breathe you will stay... Read More

Are You Making the Most of Your Intern?

KEEPING INTEREST HIGH: Supervision is key to the success of... Read More

Small Business Credit Card Advantages

Obtaining a business credit card enables the small business owner... Read More

The Skills Gap: It Pays to Use Experts

By outsourcing to skilled professionals you'll be able to grow... Read More

How to Prepare for Your Start-Up Venture!

When you awoke this morning, you found yourself buzzing with... Read More

Window Cleaning Business Start Up

Should you buy a business opportunity or Franchise if you... Read More

Collect that Debt - Your Business Depends on it

The efficiency of debt collection is the difference between a... Read More

Incorporating a Small Business: S corporations versus C corporations

If you've been considering incorporating your small business, you've probably... Read More

Q and A: Personalized Birthday Cards from Paul Leonard

Paul Leonard's BirthdayCards2Go.com paid greeting card service offers convenience when... Read More

Six Sigma for Small Business

It is not surprising that some people may perceive Six... Read More

How to Profit from Business Consulting Opportunities

Business consulting opportunities might be just what your are looking... Read More

Bedford Park taxi to Midway ..