Posts Tagged small franchises for sale

Small Franchises For Sale

small franchises for sale

Financial Challenges Facing Franchise Businesses

The current financial conditions facing franchise owners can only be described as extremely difficult.  Recent reports show that SBA loans for franchises are at a record default rates in 2008-2009.  Compared to 2007 the default rates have gone up 43% and have cost the SBA over $93 million last year.

The above statistics indicates that franchise owners are having a difficult time getting their ventures to succeed in these difficult financial times.  Everyone certainly understands the difficulty in getting a new small business to succeed and meet their financial obligations.

So, what can franchise business owners learn from the above statistics regarding recent SBA loan default rates? What are the factors that seemingly contribute toward the high default rates?  Well, a review of the statistics seems to reveal several basic factors that affect this.

First, those franchises that focused on serving the affluent customers have a more difficult time during these tough financial conditions.  As families face lower income levels, they begin to cut back on those good and services offered by franchise businesses that can be considered luxuries.  Cleaning services, laundry services and lawn services may fall into those categories.

Secondly franchises that are in an already crowded market face the prospect of stiff competition and as number of customers for that good or service fall even slightly, marginal businesses suffer immediate consequences.  As an example there are a lot of pizza restaurants both independent and franchise operators.  As families conserve cash and start to cook at home more often, they cut back on ordering pizza.  This affects all smaller and newer operators and those with lower financial capital.

Third factor that affect franchise businesses is the business model of the franchise business.  It is crucial to have a solid business model that works even in a difficult financial environment.  If the business model is marginal to begin with and depends a lot on the operator’s talent and experience, then this environment will put you to the test.  As an example opening fruit juice and cold drink stores in colder climates in winter does not make sense.

So what should a franchisor do in this environment?  It is crucial for franchisors to maintain their current base of operators and expand their base cautiously.  Nothing is more valuable to a franchisor than a demonstrable track record of success as evidenced by their customer base.  A large number of failures and defaults does not inspire confidence in a potential franchise opportunity seeker.  There are several things the franchisor can and should do.  Speak to your customer base regularly and poll them on their market situations.  Provide advise and counseling where appropriate and direct them to financial resources when needed.  When selecting new franchise owners, have a higher standard, for financial and capital requirements, so they can withstand the market forces longer.  Make sure to provide adequate training in operations so they are more successful in operating their business.

BuyTradeBiz.Com is internets newest business for sale and franchises for sale listing website.

About the Author

BuyTradeBiz.com is a multi-national marketplace for buying and selling businesses of any size, type, price, and location. We are an online advertising service that helps business owners and franchises sell their businesses by connecting them with prospective buyers. We provide a comprehensive range of services to facilitate the buying and selling of businesses and franchises. Our objective is to develop into the leading provider of online listings for businesses and franchises for sale, as well as provide the most extensive source of information pertaining to the process of buying and selling businesses.

Business for Sale in Coral Springs FL, Small Business, Business

Tags: , , , , ,

Small Franchises

small franchises

Economy Down? Invest in a Small Business Franchise Opportunity!

Right now might be a good time to think about investing in you.

“What, are you crazy? I don’t have any available funds right now to start a small franchise business!” you say. Consider this: If you have a 401k or IRA, your stocks are probably taking a beating in the market. Would you rather invest the money in your own franchise company as an entrepreneur and be the one in control rather than relying on the whims of the market?

A little known fact is that you can move either all or a portion your 401k or IRA into a self-directed 401k. This program is approved by the IRS and allows you to utilize funds from retirement accounts like IRAs, 401(k)s, 403(b)s, Keoghs, SEPs, etc., without incurring early distribution taxes or penalties!

What’s great is you can launch your franchise with minimal, if any, debt by utilizing this strategy.You can also use it as a down payment on an SBA loan to fund your venture!

I have used this program myself to fund a franchise business startup in the last year and I am glad I did based on the current market conditions. You may not want to risk your retirement, and I can appreciate that, but you have to weigh the risk and ask yourself if you have more faith in yourself or the market.

There are no guarantees, and no one answer is right for everyone, either way you just don’t want to live with regret.

If you want to learn more, check out my guide to Small Business Financing with Retirement Funds over at Franchise Chemistry.

About FranchiseChemistry.com

Franchise Chemistry is dedicated to helping people find their match with franchise opportunities based on their strengths and interests. The concept was created by Jeff Brake, a franchise business coach. As a franchisee, he spent over the last 14 years being involved with three different franchise concepts, two successful, one not so much. Out of his failure was born a desire: To help people avoid making the same mistake he did – buying a business model that did not match his strengths and interests. There are plenty of assessments out there to help folks find a career best suited for them but none that address their unique fit with franchise opportunities… Until now.

Visit Franchise Chemistry today to find your perfect franchise opportunity match and begin your career as a successful franchise business entrepreneur! You can also ask a question or request more information.

About the Author

My 14 plus years in franchising included 13 franchised locations with 3 different franchise systems in 3 different industries. What I learned along the way is that you are most successful when you are doing something you love. After experiencing failure in a business that was not a good fit, I wanted to help other people avoid the same mistake. My desire is to help you find a business that is best suited for you.

Small Business Franchises Guaranteed Small Business Franchise?

Tags: , , , , , , , , ,