Investing in a franchise can be a great way to open your own business.  Starting a franchise gives you the right to use the trademark, service mark, trade name, or advertising symbol of the parent company.  Instead of having to build the brand of your local business from the ground up, you get the name recognition of the existing brand. When you purchase the franchise, you purchase the tried-and-true methods for running the business.  All these benefits make opening a franchise business very attractive. But investing in a franchise is not a decision to be made lightly. Franchising is expensive. Before you invest in a franchise business, take the time to learn exactly what that investment entails.

The Importance of Verifying the Validity of a Franchise

Investing in a franchise is a major purchase.  You wouldn’t buy a house without a walk-through or purchase a car without taking it for a test drive.  In fact, most people have a house inspected before buying it, and most people read up about a car’s track record before buying it.  In the same way, it is important to learn as much as you can about a franchise before investing in it. It’s not enough to base your decision on the popularity of the business, its success in other markets, or hearsay.  It is critical that you know how the business works, how financially stable it is, and what the parent company will require of you once you purchase a franchise.

How to Investigate the Validity When Starting a Franchise

There are a few distinct areas you should consider when thinking about the validity of a franchise.  

Is there a market for this franchise in your area? 

Even a great company will fail in a location that has no use for its products or services.  If you are considering opening a home healthcare franchise, take the time to investigate if there is a need for home health care in your area.  As America’s population ages, the need for home health care is expected to rise nationwide. Right now, the demographics show that people aged 65 and up are the fastest-growing population segment.  Consider how many people in your area belong to this target population. Are there already other home healthcare businesses meeting the needs of this population? If not, the market might be ideal for you to open a home healthcare franchise.

What does the company’s legal history look like?

 Investigate the background of the parent company.  Request the company’s Franchise Disclosure Agreement and read through it in detail–or better yet, have a lawyer or accountant read through it.  This document will provide you with the financial statements for the company, the exact costs associated with opening a franchise, the history of the company, and details of any legal activity.  It will also provide contact information for past and current franchisees. Examining this document will give you an inside look at the stability of the company and how much it will really cost to open a franchise.  Reaching out to franchisees will give you insight into what it is really like to work with the parent company. Past franchisees can tell you why they left the franchise. This information will help you to make an informed decision.

If you are interested in starting a franchise in home health care, consider A Better Solution in Home Care.  Our team would love to speak with you about the logistics of opening a healthcare franchise in your location.

In addition to a franchise fee, it costs money to start a new business – even a well-established franchise.  That’s not a surprise to anyone considering going out on their own as a business owner.  There are the costs that come with an actual office: rent for office space, furniture, maybe utilities, even little things like pens and printer paper.  Additionally, there are the costs that come with personnel: you have to pay yourself and anyone else who works for you. Finally, there are costs that come with marketing: signs, flyers, billboards, and online advertising.  These are just a few of the expenses that come with opening any business.

If you choose to open a franchise, there will also be franchise fees and royalty fees. These fees can be quite costly. When it costs so much to start a business anyway, these additional franchise fees can feel burdensome.  However, instead of thinking of them as a burden, think of them as an investment. Franchise fees and franchise royalty fees are not cheap. But, as with anything else, you get what you pay for. As a franchise operator, you will receive a significant return on investment with franchise and royalty fees.

What Is A Franchise Fee?

A franchise fee is the amount of money it costs to purchase the rights to open a franchise.  It gives you the license to own and operate a business using the parent company’s trademark, service mark,  trade name, and advertising symbol. It is a one-time fee, meaning that you will not have to pay it again. Franchise fees are not cheap.  Depending on the type of franchise you purchase, fees can run from $20,000 to $40,000.  

What do you get with your franchise fee?  The main thing you get with your franchise fee is name brand recognition.  One of the biggest challenges in starting a new business is just that–it’s new.  No one has heard of it. As a business owner, you have to build a reputation and brand recognition.  That can take a lot of time and money. When you invest in a franchise, the brand has already been developed.  As soon as you hang your sign, people know what your business does, and what are its values and standards. That name brand recognition allows you to get your business running much more quickly.

What Is A Royalty Fee?  

A royalty fee is an ongoing fee that the franchisee pays to the parent company.   It is typically collected monthly. A franchise royalty fee is based on monthly revenue.  Depending on the nature of the business, a franchise royalty fee can run from 4% to 12% of the monthly revenue.

What do you get with your royalty fee?  For one thing, you get to operate under the umbrella of the parent company.  Royalty fees are just the cost of running a franchise. The parent company makes most of its money from royalties.  It uses that money for things like operating expenses, national marketing, training, and future developments. Royalty fees are an investment in the brand name that benefits all franchisees.  Any improvements in the brand name reflect well on local franchises.

If you are considering investing in a home healthcare franchise, consider partnering with A Better Solution in Home Care.  WIth your franchise fee, you will purchase the name brand recognition of a leading provider of home healthcare services.  Our team is ready to help you fulfill your dream of becoming an entrepreneur. Reach out to us today.

Venturing out on your own as a business owner is both frightening and exhilarating.  As an entrepreneur, you have the chance to be your own boss as you build your own business.  You have the chance to shape your own future and direct your own career. Instead of answering to the higher-ups, you only answer to yourself.  Those are the exhilarating aspects. The terrifying side comes with the responsibility of being a business owner. All the weight will fall on your shoulders.  You don’t get a paycheck just for showing up–you get a paycheck when your business succeeds. Sure, you choose the direction of your career, but that means you need a firm idea of what that direction should be.  You don’t answer to anyone else, but that means you have to make all the decisions by yourself. Every entrepreneur takes a leap of faith. Before you take that leap, consider these five tips every entrepreneur should know for the best chance of success.

Create a mission statement

Writing a clear, concise mission statement helps you, and everyone who works for you, to know exactly what is the purpose of your business.  This statement will help you with decision-making as your business grows. Does an action fit with your mission statement? If not, then it does not really fit your business, either. 

An entrepreneur must establish well-defined goals

Establishing well-defined goals for your business helps you to know whether or not your business is succeeding.  Broad, loosely-defined goals are too vague when it comes to measuring success. Create specific goals, such as how many customers you will serve or a projected growth over time, that you can measure to see how you are doing as a business owner.

Define your customer base.  

Knowing just whom you plan to serve will help you decide how to target your market and where to direct your energy.  For example, if you choose to open a home healthcare franchise business, you might define your customer base as an aging population desiring to age in place.  Or you might focus on people with disabilities who need help to live independently. Once you define your customer base, you can develop your marketing strategies with that particular audience in mind.

Utilize existing knowledge as an entrepreneur

There’s no need to reinvent the wheel, or anything else.  Take advantage of experts and other professionals. This might mean seeking out another entrepreneur as a  mentor. It could mean outsourcing payroll and billing instead of doing it yourself. It can also mean investing in a franchise business.  Purchasing a franchise gives you a tried and tested business model developed by experienced professionals. Opening a franchise lets you hit the ground running with your new business.  

Take the plunge. 

Part of being an entrepreneur is taking the risk and starting the business, with no guarantee of success.  Take the time to create an action plan, set aside money for expenses, but then take the plunge and open your own business.  There are no guarantees, other than that you will certainly experience hiccups and setbacks. But no one can plan for everything.  Part of being an entrepreneur is learning as you go. As your business grows, you will see what works and what doesn’t. As you learn you can adjust your business model as necessary.

If becoming an entrepreneur appeals to you, reach out to A Better Solution in Home Care.  Our team would love to speak with you about opening your own home healthcare franchise business.  Investing in a home healthcare franchise business might be your path to entrepreneurship.

There’s something about being your own boss that appeals to many people.  Running your own business is a great choice for people who seek independence and like to see the direct results of their own hard work.  But starting a new business is also risky and, for first-time business owners, can be a little overwhelming. Opening a franchise offers the best of both worlds.  Franchise owners reap the benefits of owning their own business while taking advantage of the tried-and-true formula of a well-developed business model. If you have a background in healthcare, opening a healthcare franchise can be a great way to continue working in healthcare while owning your own small business.  One hurdle that can intimidate many new franchise owners is raising the capital to finance the franchise. Fortunately, there are several different options for financing your franchise and setting out as your own boss.

How To Finance Your Healthcare Franchise

Financing your healthcare franchise is expensive, but don’t think of it as a burden.  Think of it as an investment–an investment in your future, in your retirement, and in your community.  The cost associated with financing your franchise provides you with the knowledge and training to start your business and keep it going.

Rollover your 401(k)

While it might seem a little scary to use the money you have set aside for your retirement, remember that opening a franchise is actually an investment in your retirement.  In most situations, there is a penalty fee for making a withdrawal from a 401(k). However, there is no tax penalty for withdrawing money from a 401(k) in order to start a C Corporation.  Consult a tax attorney or CPA for assistance in setting up your C Corporation and rolling over your 401(k).

Small Business Administration (SBA) Loans

SBA loans are a great option for small business financing.  After all, supporting small businesses is the purpose of the SBA!  These loans frequently have low-interest rates. Your local SBA office can help you navigate the application process.

Home Equity Loan or Line Of Credit

If you own your own home and have built up home equity over the years, consider a home equity loan or line of credit for financing your franchise.  Borrowing against your house is especially attractive if you live in an area with a strong housing market.

Borrow from family or friends for your healthcare franchise

Borrowing from family or friends can be awkward or risky, but it is actually a fairly common way for small business owners to raise funds when they are starting out.  Traditional lenders can be leery of lending money to a business that has no proven track record. If you choose to ask friends or family for a loan, treat the loan just as you would if it were from a bank or any other lender.  Carefully consider the terms of the loan. Write up a formal loan agreement, including interest rates, monthly payments, and the date when you will finish repayment. Discuss whether or not the friend or family will own a percentage of the business or expect any returns from it.  Careful planning now can prevent arguments or damaged relationships later on.

Take the first step toward opening your healthcare franchise by contacting A Better Solution in Home Care today.  Opening your own home healthcare franchise is a dream within reach.  Our team is ready to work with you, every step of the way.