Ready to leave your day job behind? Whether you're diving into a franchise, kick-starting a side hustle, or simply eager for a change, preparation is key. Your success hinges on solid financial planning. To prepare for a smooth transition, here are crucial financial questions to answer.
What’s My Financial Horizon?
First things first: determine your financial timeline. This is about understanding when you need your new venture to start paying off. If you're in a rush to replace your income, seek opportunities with a quick path to profitability, like single-unit franchises or service-based businesses. On the flip side, if you have the luxury of time and savings, you might explore more ambitious ventures like executive ownership.
Can I Still Pay My Bills?
Here's the reality: don't expect to draw a salary from your new business immediately. This period requires a strategy to cover your living expenses. You have options:
- Keep your day job: Initially, run your new venture as a side hustle.
- Liquidate assets: Consider selling an investment property or tapping into savings.
- Lean on your partner: If possible, temporarily live on your spouse's income.
Each approach has its merits and challenges. Choose the one that aligns with your circumstances and goals.
Do I Prefer Upfront Costs or Ongoing Expenses?
Franchising costs are a mix of initial and ongoing expenses. These include the franchise fee, setup costs, and regular payments like royalties. Some franchises offer lower initial fees in exchange for higher ongoing costs. Decide which financial structure suits you best and choose your franchise accordingly.
How Will I Fund My Franchise?
Funding your franchise is a critical step. Beyond the initial franchise costs, you'll need enough runway to cover operations until you reach breakeven. If your dream requires significant capital, explore all available funding options. Federal loans, retirement account funding, and other financial aids are at your disposal. Research and choose the best fit for your situation.
Ready to see whether you have the finances to start a franchise business Schedule a free 15-minute call, and I'll help you evaluate.