We all aspire to choose uncertainty and unlimited possibility, and becoming a business owner can provide plenty of both! Unfortunately failure is also a part of business ownership. But why do businesses fail and what can you do to diminish your risk of failure?
Ultimately, 29% percent of small businesses close because they run out of cash, and 82% cease operations due to cash flow problems. Why are these numbers so high, and what can you do to ensure that the money you invest does not run out before you reach profitability? Joining a franchise can help in planning and budgeting your business venture and avoiding cash flow issues
The most prevalent reason for a small business running out of cash is a lack of planning, in the beginning, for foreseeable costs and unexpected expenses.
You can review our financial data
All Franchises are required to have a Franchise Discluse Document (FDD), which can be a very helpful tool in evaluating franchise opportunities and costs. An FDD contains pertinent information such as estimated initial investment, fees, expenses, and financial performance representations,which can all be used to plan and provide for your business's financial needs. Within Caring's FDD, we provide a low- and high-end accounting of startup expenses as well as capital needs for the first 6 months of operation. These numbers are based on what our owners spent, and we are constantly gathering data based on our owners' experiences to keep information current. As you continue to learn about Caring, our Franchise Development team will help you gain a better understanding of your particular costsas they relate to your individual franchise and the state you will be opening your business in.
You can talk to other franchise owners
Unlike starting a business outside of a franchise, when you are researching franchise opportunities, you can talk to people just like you that have already taken the leap from employee to a business owner and are following the exact steps that have been identified for you to follow as well. This provides you with insight and data that you simply cannot get outside of a franchise system. As a part of Caring Senior Service's franchise sales process, you will talk to other Caring franchise owners. You will have conversations with owners just starting out to veteran owners with years of ownership experience to see exactly how they arrived at their current position. When you speak with new owners, you can address any specific concerns or questions about cash flow planning with folks who actually went through the same process. This is information that you simply cannot have access to when starting your own business without the backing of a franchise.
You can talk with franchise development professionals
We know how much cash it takes to make a Caring franchise succeed, so we require access to $50,000 to $100,000 in capital to start your business. This capital requirement does not take into account any salary for the owner. Of course, a new owner will need funds to pay his or her personal expenses, so sitting down and building out a personal budget is an exercise that will be necessary for any potential franchise owner. Caring also has access to other entities that can help you plan for the optimum use of your resources when starting your business, such as converting your 401K to start your business. As a franchisee, you have access to the data you need to make accurate projections of your capital needs when starting a business.
Access to Franchise Disclosure Documents, current owners, and a development team are all tools you can use to evaluate a franchise's required investment and the return on that investment to ensure it is a good fit for your goals. Being detailed and upfront about finances helps keep the process transparent, and you well informed. If you would like more information on Caring's FDD or our Initial Start-Up Expenses, give us a call today at 210-982-0122.