Financial Musts for the First-Year Franchisee

The right Canadian franchise can be a great opportunity for an entrepreneur, but the first year or two can be challenging. During this time, you are getting and keeping a business up off of the ground. To place yourself in the best possible position, consider doing what you can to help ensure your finances aren't precarious during the start of your ownership.

Set a solid financial foundation

Starting out on the right financial foot will set your tone. Consider the cost of the opportunities you are considering so you can make the best decision in your case, and also make sure your personal financial ducks are all in a row. You may not be able to rely on income from the business in your early years, so you will need a plan in place to weather the possibility of your business being a financial burden for some time. Have at least three months' worth of salary set aside in case you hit a particularly rough patch.

Consider a partner

While striking out entirely on your own is probably very tempting, it's easier to handle the financial risks and burdens involved with starting your franchise when you have a solid business partner. A like-minded partner can also help you grow the business, with each of you using your talents and strengths to benefit the business.

Review the daily operations of the franchise

When you improve the day-to-day efficiencies of the business right from the start, you can boost workflow and better position your business for success. This includes everything from finding and hiring the right staff to making investments early that will pay off later, such as technology that isn't required by your franchisor but could improve sales and customer experience.

Don't overextend yourself

Starting a new franchise is exciting, but you've got to keep in mind that you may be an owner for years. Sometimes, a franchisee will try to do it all too fast and end up taxing themselves out financially. You need to play the long game. Look at how you can set the franchise up for success over the long term and not instantly.

While you will see ebbs and flows in your first years as a franchisee, keep the tips above in mind to help protect your business and your financials when you are in a downturn. When you head off those early financial headwinds, you'll be in a far better position to take full advantage of your new opportunity as a business owner.

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