The one-day event began with a general economic update from NatWest bank, sharing the state of the nation’s finances and navigating the UK’s economic challenges and opportunities in 2023. Six discussion panels presented on the day explored the strengths of the franchising industry right now and any possible weaknesses to watch out for. Leading financial experts with strong franchise backgrounds kept the chat highly relevant answering questions on various hot topics such as ‘what financial knowledge do franchise networks often lack’ and ‘how franchisors can motivate and assist franchisees to improve financial performance’.
Feeding back into Head Office after the event, our Franchise Team have pulled together these useful insights from the day for prospective franchisees…
Research the right things
When looking into how to finance your franchise Chris Morris, from NGI Finance, don’t make the common mistake and only look at the total investment for the franchise purchase. Remember to include working capital, ongoing fees and VAT. Missing this out could be a costly mistake. Any new franchisee needs to define the correct amount of working capital, as having insufficient funds at the outset can mean the start-up phase and ongoing future of the business could struggle.
Power of the Business Plan
When it comes to financing any franchise having a current Business Plan is key to helping you identify total investment and needed working capital. Make sure your plan:
- clearly identifies all needed investment and all predicted profit;
- is the basis from which you complete all of your finance application paperwork;
- makes it possible for you to monitor business performance and allows you to manage the business as it moves forward.
Banks can help
Gillian Morris from HSBC gave the bank’s perspective on franchise business support. Speak to one of their dedicated franchise units trained in the business needs of this specialised sector. Plus, they have experience to be able to accurately assess how successful any new venture may be. This could be a useful forecast when just starting out in the world of franchising.
When assessing any brand as a potential franchisor, banks would recommend you consider these key markers:
- investigate the quality of the support provided by the franchisor’s brand;
- make a judgement on the value of their brand awareness in a competitive market. How well the company is known and what it stands for?
- assess available training and the experience of the entrepreneur behind the business too. Adequate provision will contribute to franchisee success.
If you’re a potential Franchisees for Angela’s Swim School we’d love to hear from you. Please email your questions to email@example.com.