Carl Reader of D&T chartered accountants and strategic advisors outlines eight ways fledgling franchisees can save money on an ongoing basis
Every year thousands of entrepreneurs my day-to-day experience I find most of them would have been able to save some money had they taken correct advice and researched their business fully at the outset.
DO YOUR DUE DILIGENCE
The biggest financial mistake you can make is investing in a franchise that isn’t suitable for you. Before committing any money, you should ensure you have done your due diligence and that the opportunity is right for you.
There is a great start-up community and several websites available to help you save money in your day-to-day business. Whether you find new suppliers, business grants, or just a sounding board for general advice, it’s worth investing some of your time in this area.
REVIEW YOUR FUNDING
It is often beneficial to engage a finance broker, such as Franchise Finance, who can ensure you have the right mix of financing, at a cost-effective rate, should you require external funding for your franchise.
INITIAL TAX SAVINGS
A British Franchise Association affiliated chartered accountant will be able to help you understand whether you are claiming as much tax relief as you can, as early as you can. Franchise tax legislation is reasonably complicated, so it pays to take expert advice.
ONGOING TAX SAVINGS
Tax savings shouldn’t be limited to the initial cost of setting up your franchise. A good accountant will ensure you are structured in the right way to achieve both your personal and commercial objectives in a tax efficient structure.
FRANCHISE AGREEMENT REVIEWS
It is essential that legal advice is taken on a franchise agreement before signing it. Although these agreements are generally non-negotiable, this advice will ensure you are fully aware of any commitments you are entering into. It is also strongly recommended that you use a bfa lawyer who understands franchising, as they will not aim to negotiate the unnegotiable and will save you money in the long run.
Almost every franchisor has a list of preferred suppliers who can help their franchisees save money. Usually the franchisor would have gone to some effort to ensure service levels are high and the price is market leading. In fact, many will ensure you receive discounts beyond those you could negotiate yourself.
By using the latest technology, you can automate a large proportion of your bookkeeping tasks, saving significant amounts on your business administration costs. For a typical start-up, the cost saving of using bank feeds could be £200 per month. Your accountant should provide you with details of these services, which can save you money from day one.