Franchising a well-run business almost means that you’ll be getting the same type of success, as long as you run it right. There are several factors to consider when buying a franchise, though, and managing the finances correctly is one of them.
Pretzelmaker shares some tips on how to deal with finances when it comes to running your soft pretzel franchise.
Give Yourself a Salary
You deserve a salary, too, especially with all that effort you put into running the business. Separate your business’s income from your personal spending to make sure you do not mix it all up.
Compute your monthly salary by looking into your projected income. From there, you can decide how much you will get per month. If you are not sure how much you should get, then it would be best to consult an accountant to help you with the expenses and salaries.
Prepare Your Budget
Before buying a franchise business, make sure you have the money and capital for it. Don’t let yourself get caught up in all that debt, as it can be difficult to pay it off, especially if your franchise does not run the way you want it to.
Start small and just expand the business as you go. This way, you won’t need a huge capital, which is more practical and possible when you look at it from an entrepreneur’s perspective.
Keep an Emergency Fund
When it comes to franchises and businesses, you are never certain of what’s going to happen next. There are months where you can earn more than you thought possible; while there can be times where you’d need to exert more effort just to make a few sales. This is exactly the reason it is important to keep an emergency fund, just to make sure you don’t drown in debt whenever things like this happen.
Always interview your franchisor and fellow franchisees and ask them for some advice regarding your new business venture. Hire the right people as well and see your business succeed.