It is important that entrepreneurs carefully consider the many aspects of franchising before they become business owners. Of those considerations, cost often is high on the list. By Nancy E. Williams
It is important that entrepreneurs carefully consider the many aspects of franchising before they become business owners. Of those considerations, cost often is high on the list. While some people may think that the dream of owning a business through franchising is unaffordable and, therefore, unattainable, there are many low-cost options available. These options have a low barrier to entry and typically do not require a staff or expensive overhead, allowing entrepreneurs to fulfill their dreams without having a cloud of debt hovering above them.
Two FranServe Affiliate Franchise Consultants, Francee Lemchak, co-owner, Peak Business Resources, and Jeffrey O’Shea, owner, Capital Franchise Consultants, weighed in on why they regularly recommend low-cost franchise opportunities to their clients and which types of brands tend to fall into this category.
Why are low-cost franchises a good option for clients?
Lemchak: Some clients with an entrepreneurial spirit leverage low-cost franchises to get started in the business world and then scale as their business grows. Other clients may decide to acquire low-cost franchises to diversify their investment portfolio.
O’Shea: Most of the clients I work with are potential first-time business owners and/or W2 employees looking to leave corporate America. Buying a business for the first time can be stressful and scary. A low-cost franchise option allows clients to feel comfortable making a smaller-level investment to begin their journey into business ownership.
Which categories do you recommend to clients for this investment?
O’Shea: I recommend many different home-service franchises to my clients. Some of my favorite brands are B2B with recurring revenue models. I also recommend many different home-service brands that will continue to thrive in any type of economic environment.
Lemchak: Categories really depend on the client’s goals and interests, such as working in the business as an owner-operator or running the business as an executive. Also, it depends on a client’s skills and the amount of time they plan to devote to the business. Home services, as well as cleaning, real estate services, business services and vending, may be included in the options I share with my clients.
Is there any advice you give to clients about low-cost franchises that is different from a higher-value investment?
O’Shea: Most low-cost franchise opportunities are home-based. This creates a low-cost/low-overhead investment. It allows clients to achieve cash flow much quicker without the large overhead of a storefront or office space.
Lemchak: The advice I provide to my clients, in general, is to identify a business that they will be proud of and enjoy. That way they don’t feel like they are buying themselves a job.
Don’t let your perceived cost to purchase a franchise scare you off before seeking the expertise of a franchise consultant. The opportunities they share just may be right up your financial alley.
Nancy E. Williams