Looking for a Low Cost Franchise? Check Out These Top Picks
Looking for a Low-cost Franchise? Check Out These Top Picks
Running your own business can provide you with a better quality of life if you are a self-motivated person. Trading in a regular paycheck can be a daunting decision until you see how you can earn that same income, and more, as a business owner. Being a franchise business owner can reduce the risk even further as you benefit from an established and proven model of operation.
Franchise opportunities (and costs) can certainly vary. For people who don't want to invest their life savings or take on significant debt, there are a number of low-cost franchise options available to facilitate the entrepreneurial decision.
Options for affordable franchises to buy
Franchise 500 publishes a list of low-cost franchise opportunities. Some of the options they highlight include cleaning services, children's sport and dance programs, travel consulting, tax and bookkeeping services, windshield repair, event management, and publication services. With each franchise offering, there are four financial figures you need to compare:
- Franchise Fee. This is the cost to get started. It usually includes training, a new website, initial supervision, etc.
- Initial Investment. The initial investment is the materials and resources you’ll need to launch your business. For example, a cleaning business will require supplies, and a bookkeeping service will require software.
- Net Worth. This is not a fee, but an indicator of how likely you are to qualify for a loan for your business. Net worth is the sum of your assets (savings, home value) minus your debts (mortgage, loans, etc.) With a low-cost franchise, the net worth requirement should be low as less money is needed to get started.
- Ongoing Fees. A franchise collects a percentage of your gross revenue for royalty fees and marketing fees. This percentage and how you benefit from it are detailed in the franchise disclosure document (FDD).
Factors other than fees that make a low-cost franchise
Industry publications also discuss other factors that prospective business owners can use to determine what constitutes an affordable franchise to buy. For example:
Overhead. The cost to operate your business is usually your biggest expense. If you have a brick-and-mortar building, you have costs associated with rent, utilities, maintenance, and taxes. If you are working from home, you do not incur these overhead fees, adding more to your bottom line.
Collecting Payments. Being paid for your work is an important part of your financial success. Are customers paying upfront for your services? Is there a chance a customer would not pay? The time you spend chasing payments is time you are not spending on selling your product or service, which impacts your revenue potential.
Flexibility & Time. Time is a critical element of any business, and flexibility in your hours of operation is important. For example, if you operate a brick-and-mortar location, you will need to set consistent hours. If you operate a service that most people can only access after work or school, you will need to work evenings and weekends. If your business hours are not flexible, then the time you choose to spend away from your business cannot be recouped, and sales can be lost.
Managing long-term risk in a franchise investment
Life may be great today, but what if it isn't great tomorrow? How does future uncertainty impact your risk in a franchise investment? Consider how recession-proof the opportunity is when comparing your options.
Customer Base. When money is tight or people are nervous, they pull back in some areas of their spending. For example, a homeowner who employs a cleaning service might opt to do the cleaning themselves; a family who would normally travel may choose to stay home. In difficult times, a business customer is more reliable than a consumer because they still need services to operate, and they can't do them all themselves.
Home Office Expenses. Working from home allows you to be eligible for income tax advantages, which reduce your overall tax bill and add to your income. A secure home office location allows the business to travel with you if you change locations as well.
How RSVP checks all the boxes
RSVP is a niche-market advertising business. We are a business-to-business company; selling direct mail opportunities that drive revenue to businesses by targeting an affluent homeowner demographic. We make it easy for businesses to succeed in building awareness among their potential customers or promoting a special offer to generate recurring income.
We have an 84% open rate, and 90% of advertisers renew annually. We are also a low-cost franchise opportunity that has been ranked on Entrepreneur magazine's Franchise 500 list for the past 10 years. Wouldn’t it be nice to enjoy your evenings and weekends? If you want to build the life and the income you deserve, get started with RSVP.