December 30th, 2017 - Franchises Under 10k
Mistakes to avoid when buying low cost franchises under 10000 dollars
If you are one of the many people dreaming of leaving their day jobs and starting their own business, then you may have considered buying a franchise as one of your options. Low cost franchises under 10000 dollars are a great way to get up and running, whilst avoiding the regulatory, technological and operational challenges that come with starting a new business from scratch.
When buying a franchise, you are buying an established brand with a proven formula for running a successful business, plus training and support to help you where you need it. Even though franchises come with a recipe for success, it is still possible to get it wrong. This guide takes you through the most common franchise buying mistakes and how to avoid them.
Browse our list of franchises under $10k and find your perfect new business opportunity today.
Why invest in franchise businesses under 10000 dollars?
There are many reasons why people choose to invest in franchise businesses under 10000 dollars. For some, it may be that they simply cannot afford to invest a larger sum of money, and so franchises under 10k are a more accessible route to business ownership. Taking on big loans or depleting your savings is not required.
For others, the new business failure rate may be a cause for concern. Only fifty percent of all new businesses survive their first five years, and although franchises are less risky from the point of view that they have a proven system behind them, they are not immune from failure.
Therefore, starting small and investing a lower amount of money mitigates the amount of financial risk involved should anything go wrong with the business.
Many low-cost businesses, and particularly franchises under $5000, do not have a requirement for you to lease premises. Working from home or online has many benefits in itself.
Besides lower overheads as a result of not leasing premises or commuting to work, you will also have more flexibility. You are free to choose your hours of work and can be available to customers worldwide, increasing your potential market reach.
Common mistakes when buying franchises under 10000 dollars
When you begin searching for franchises under 10000 dollars, it is very easy to get carried away and want to get started immediately. This can lead to making a mistake that could have a significant impact on your financial situation, so it is important not to rush the process. Take heed of the following common mistakes made by first-time franchisees, and note the ways to avoid them.
Not properly assessing your finances. Before you even start looking at low cost franchises under 10000 dollars, you should do a thorough audit of your own personal financial situation. Knowing exactly what you have to work with is essential to identifying the right franchise opportunity for you and making a success of it.
If you get this wrong, you could end up overcommitting yourself and not being able to meet your obligations as the franchisee. There are many tools available online that you can use to easily assess your financials.
Not doing enough research. Many people are so keen to get started that they neglect the most important part of the whole process: devoting a significant amount of time to comprehensive research. You should delve deeply into the culture and history of the franchise, as well as conducting thorough market research that determines the future longevity potential of the business.
You will also want to align this with your own goals. For example if you are interested in a cheap business that you can grow quickly and sell, you will need to be sure of the franchise’s short term growth potential in order to accomplish this.
Not thoroughly reading and understanding the Franchise Disclosure Document (FDD). The FDD is a legal document that sets out all of the relevant information about the franchise. By law, the franchisor is required to provide this at least 10 days before signing the franchise agreement.
Possibly the most important part of the research process, you should go through this document with a fine tooth comb, and preferably with a legal advisor, in order to understand the business you are getting into and your obligations, as well as those of the franchisor. Make a note of anything that is not clear or you don’t understand and go through this with the franchisor. Not understanding your obligations as a franchisee now could cause huge problems in the future.
Not speaking to existing franchisees. The FDD contains details of all current and past franchisees. Use this information and reach out to as many of them as you physically can in order to gain a more objective view of the franchise.
Existing franchisees may be more inclined to be honest about the quality of training and level of support they receive from the franchisor, as well as being able to verify earnings claims. They will also be able to tell you about any struggles they have encountered in setting up and running the business.
Underestimating the ongoing commitment. As well as the initial investment to buy the franchise, you will also need enough money to meet the ongoing costs of running the business and it is wise to put money aside for unexpected expenses. You should also be prepared for the ongoing time commitment.
Although a franchise is an established system, you will still need to put in the hours to make a success of it. This is especially true in the early days when you are launching the business.
Where to find low cost franchises under 10000 dollars
Now you have all the information you need to avoid making any costly mistakes, you are ready to begin searching for low cost franchises under 10000 dollars. Head over to Franchises Under 10K where we have curated a list of franchise opportunities that are perfect for new entrepreneurs starting out with their own business.
Take your first step towards becoming your own boss today. Browse our list of low cost franchise opportunities under $10k.