How Can I Start My Own Cleaning Business With No Money?
Canada has the second-highest number of franchises out of every country, behind the U.S. With some 1,300 franchises operating today in Canada and about 1 of every 5 dollars being spent on a franchise, there’s no doubt that franchising is big business in this country.
Have you been interested in buying a franchise but you’re not sure that you’ll be able to afford it? Read on for more information about purchasing and owning a franchise:
Purchasing a Franchise
When it comes down to it, most newcomers to the franchise community don’t know how to own a franchise, let alone how much it’s going to cost. So if this is something that’s making you nervous, don’t worry, it’s completely normal.
According to Canadian Franchise Statistics, the average initial cost for a franchise is actually in the range of $25,000; however, once you consider the other parts of the investment such as fees and royalties, you’re going to be looking at a $100,000 investment or more in the long term.
Costs of Franchise Operation
The truth is that the cost of franchises can vary greatly, and you really will have to do your research to understand the specific costs of a given company.
In general, the cost of a franchise will be higher if the franchise or brand is well-established. Each one is unique, so it’s crucial that you investigate to consider what type of franchise is in your best interest financially. Less expensive franchises could pose more risk, but if you run your business with common sense, anyone has the chance of getting it off the ground.
The Franchise Fee
The franchise fee is what you pay the franchising company at the outset. In exchange for this fee, you are receiving something that a company has fully developed, invested marketing and branding dollars in, and garnered intellectual property rights and trademarks. You can expect to pay this amount in full as you sign off on the franchise purchase.
Other costs include equipment, training, taxes, lawyers, and professional fees.
Financing for Franchises
Perhaps you’re one of the many people interested in starting your own franchise, yet you’re not sure you have enough money. It’s true that the marketplace can be quite competitive, and you’ll likely need a clean credit score as part of being considered. However, most banks have information to guide you on the financing part of franchising. Whether or not a bank is interested in supporting you will depend on what both the franchisor and franchisee submit regarding your application.
Franchisers will be looking at you as an investment, and in order to show them that you are low risk, you have to have some liquid assets ready and available should anything go wrong – in other words, the more cash you have as backup, the more likely a franchiser will be to sell to you.
The key is to research possible franchises and develop a clear and realistic outline for how much you need. A well-executed business plan is essential for approaching banks for financing.
If you’re considering buying a franchise and you’d like to learn more, we can help you find out more about becoming a JAN-PRO owner. We’re a top-rated professional cleaning company and one of the most profitable franchises in Canada.