Understanding finance is crucial in franchising
By: Deborah Bates
21 January 2011
Choosing one of the best franchise opportunities on offer is an excellent way to start your own business, however one expert has warned that those starting up a company need to fully understand all the financial aspects.
The head of franchising as HSBC, Cathryn Hayes, advised those planning to approach their local bank for funding should have a strong idea of the amount they might need and the exact details of how it will be spent.
This is because funding providers are much more likely to lend money to those who have a strong shot at making their business venture work, and who have a solid, comprehensive business plan.
Hayes told Which4U: "Running your own business may be a long-cherished dream, but it can be a frightening step to take," but that funding providers are becoming more and more interested in investing in small businesses.
Before heading to the bank, Hayes suggests creating a list of all personal expenditure, which will show them you have thought the venture through thoroughly, and know how much you'll need to extract from the business to live. She also advised that potential SME owners consider the little costs that some people neglect when developing a business plan, such as "premises and professional charges, as well as insurance."
Hayes comments come shortly after successful franchisee, Paul Saunders, spoke to The Mirror about his experiences in creating a small business, and the top tips he would give others looking to follow in his path.
"I discovered how important it is to listen, listen and listen - to your staff and your customers as well. My advice is to get under the skin of your business, know the detail, manage costs and reward good performance. Be prepared to take the rough with the smooth, as not everything works first time."
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