In the current economic climate, financing your new franchise may be more challenging than it once was. With less easily available credit, it is more important than ever to take stock of what is available to you from the onset. Work together with your franchisor to find what options will work best for you to ensure that your business is established on a firm financial foundation.
Personal Resources
If you happen to be fortunate enough to be sitting on enough capital to start your business and float it through the rocky terrain of start-up then so much the better. However, that ideal situation is not a reality for most, nor should you be constrained by it. Nevertheless, the more capital you can generate on your own, the better off you will be.
Take a look at what you can realistically bring to the table. Home equity is always a good start and can be leveraged as collateral for a loan to start your business. Creating a C corporation from your 401k or (other type of retirement fund) can also provide you with a source of funding. Rallying the support of personal private investors is also an excellent way of generating capital for your business.
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Funding Your Franchising Venture
