Quality, low-cost franchises are not a cheap substitute
Would-be entrepreneurs unite. Your hope of owning an affordable business without breaking that “so-called” bank, is well within your grasp.
That’s the beauty of low-cost franchises, which can offer an easier and more affordable start-up, faster profitability, less debt incurred, stronger cash flow to fuel growth and more flexibility when it comes to paying the bills.
Low cost franchise options, however, do not mean you have to sacrifice support, training and help from the franchisor.
Franchise Business Review recently released a report featuring the 80 top-ranked brands that have minimum investments under $100,000, that come highly- recommended by franchisees of the businesses.
To prove a point in this story, we’ll go even lower by presenting options with a minimum investment under $50,000.
Home Inspection Services
What they do: When purchasing a house, new homeowners always have an opportunity to get the home inspected. The inspection is a boon for the future home buyer’s, and is designed to give a picture of the property’s condition, according to homebuyinginstitute.com.
Industry forecast: The Bureau of Labor Statistics (BLS) says the home inspection industry is expected to grow 10 percent by 2026. That’s faster than the average for many occupations. Although potential homeowners aren’t required to have a home inspection, the BLS said the public’s interest in safety will fuel the growth.
Commercial & Residential Cleaning
What they do: Who knew cleaning up after other people’s messes could make for such a rewarding career? From commercial cleaners keeping banks, schools, churches, gyms – and more – sparkling clean, to disaster-relief cleaning services and in-home maid services, this is one lucrative franchise category.
Industry forecast: Allied Market Research projects that the global cleaning services market is expected to grab $74.299 million annually by 2022, with maid services accounting for the largest share in this overall services market. When it comes to commercial cleaning, Franchisehelp.com says office cleaning accounts / janitorial services account for approximately 31-percent of industry revenue.
What they do: If you want a home-based business that offers high-yield for a low upfront cost, become a cruise coordinator planning and coordinating travel packages for individuals, private groups and businesses. According to the Cruise Lines International Association (CLIA), most cruises are sold by travel agents, not on websites.
Industry Forecast: The cruise industry continues to grow, with 27 million cruisers expected in 2018. That’s a million more than last year. Additionally, 27 new ships are coming out in 2018, according to the CLIA: 10 for river cruising, 17 for ocean.
What they do: A real estate agent arranges the selling /renting of houses, land, offices, or buildings for their owners.
Industry Forecast: More than 1,000 companies applied to be considered for the 39th annual Entrepreneur Magazine’s Franchise 500 list. Seven real estate companies snagged a spot.That’s pretty impressive.
Non-Medical Home Health Care
What they do: Non-medical home care services help the elderly age in place longer by helping them accomplish the simple functions of daily living.
Industry Forecast: According to the BLS, approximately 1.3 million additional jobs within the home care field will be added through 2020.
This magazine hosts a variety of other options to consider, too. My advice – let’s figure out your ability to fund your project early in the process. No one wants to fall in love with a business that they can’t afford. That’s a lesson in frustration. Once we know your parameters, we can begin looking at the SEVERAL options that are available to you and you can base your ultimate decision on which business is the correct fit, NOT which business you can afford.
Listen to Lisa (Sorry for the spacing Jill! Not sure what’s up – guessing you’ll be able to fix it)
When evaluating franchises in the low cost category, you will still need a business plan. Remember, when starting your plan to keep a few things in mind.
1) Start with expenses – not revenues. When you’re in the startup stage, it’s easier to forecast expenses rather than revenues. So start with estimates for these common categories of expenses and use the franchisor’s FDD as a start:
Fixed Costs and overhead
• Rent and utilities
• Telephone and communication costs
• Accounting and bookkeeping
• Legal, insurance & licensing fees (Triple estimates in this category,
since they’re very hard to predict without experience.)
• Advertising and marketing (Double estimates in this category, to be
. Variable costs
• Cost of goods sold
• Materials, supplies and packaging
• Direct labor costs (Add direct sales and customer service time to this
• Customer service
• Direct sales and marketing
2) You will also need to come up with a financial forecast, which may seem a bit overwhelming. A financial forecast will help you develop operational and staffing plans to help make your business a success.
Have 2 plans. 1 optimistic plan, based on your validation process and speaking with other owners in the system who have been successful. 1 plan that is the “worst case scenario” but based on your ability to run the business and follow the system after training. Chances are that your first year, you’ll fall somewhere in the middle. Without a plan year one, though, most won’t see year two.