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How important is access to sufficient working capital in the early stages of running a franchise?
Sufficient working capital is essential to running any business, particularly in the early stages when things rarely go as planned and all those cost items you overlooked suddenly jump out and bite you. Not to mention sales growing at a slower rate than you thought and people taking longer to pay than you believed possible. If you join a well established franchise you are likely to have fewer surprises as the franchisor will have set up many similar businesses before and will insist you prepare a comprehensive business plan with not just profit and loss, but also cash flow forecasts. Beware the franchisor that gives you a pre-prepared one, because that will not be relevant to your own personal circumstances. If you live in a big house with a big mortgage and you have three teenage girls at private school, you are likely to need more working capital than a single person living in a rented flat. Cash, or working capital, is the lifeblood of any business. If the blood stops flowing the body dies. So when considering which franchise will be best for you don’t just look at the upfront fees. You may have enough to pay those without borrowing, but if you are going to need several thousand more to live on while things get going, make sure you have the banking facilities in place before you start.
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Exciting Franchise Opportunities
Companies to Consider
£50,000 – £100,000 profit
Third party sources
Potential ROI within 12 months, with average profits of 34% in the first year
Right at Home UK
£150,000 per year
60% bank funding, subject to status
Discussed at information disclosure stage
Third party – Shire Franchise Finance
No Letting Go
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