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Starting a business is much easier when you look into low cost franchise opportunities. Although you’ll still have to come up with financing, franchises have a much higher rate of success than privately owned businesses. There are plenty of other reasons to join a low cost franchise.
Why Look Into Low Cost Franchise Opportunities
Low cost franchise opportunities allows franchise owners to tap into a successful business model, even at a moderate start-up cost. You could reap benefits such as these:
Proven Business Plan And Revenue Model
A business opportunity need a solid business plan behind it to maximize success and profitability. Joining a franchise means that you will already have a business plan. It won’t be just any business plan either. It will be a business plan that has proven to be successful.
Operations And Training Systems In Place
If you go about things by yourself, you’ll be left on your own to do everything regarding running your business. This includes things like accounting and training employees. Instead of spending weeks and months fine-tuning and developing your own procedures, you can take what has been known to work and apply it immediately. Franchisees are provided with all the training they need.
Supply Arrangements With Volume Discounts
Every business needs supplies. If you start a business by yourself, you’ll have to find your own suppliers. Franchisors typically have arrangements with all the suppliers that you need for your business. This allows you to obtain supplies at much lower costs than if you were just a single business dealing directly with a supplier.
Marketing Systems And Brand Name In Place
There are many low cost franchise opportunities with sophisticated and battle-tested marketing systems in place for franchise business owners to leverage on. When starting up your own business, you will have to attract new customers. The presence of effective lead generation and sales systems make it easy for franchisees to build their customer base.
The parent franchise company also has an extensive advertising budget that will benefit all franchisees. As a franchisee, you can reap the benefits of the national marketing campaigns that they put forth. You will still need to pay for advertising fees on a regular basis, and that should be factored into the cost of running the franchise.
Getting potential customers to trust the quality of your products and services offered in another factor to consider. This is much less of a problem for franchisees. They usually operate under a brand name that consumers already know and trust, or else have collected an existing file of testimonials for customers to back up their product claims.
Low Cost Franchise Opportunities Start-Up Costs
Low cost franchise opportunities are good investments since you can get started with a modest amount upfront and can reach profitability much more quickly. With low cost franchises, you can get find a number of affordable opportunities for as little for $10,000, sometimes even $5,000 or less. Entrepreneur magazine publishes an annual list of top 100 low cost opportunities, defined as opportunities that can be started for under $50,000. Whatever the costs are, you want need to think about the initial investment versus your interest in the field of business and expected returns.
There are a variety of fees associated with joining a low cost franchise opportunity. First and foremost, you’ll have to pay a franchise fee. This varies between companies, but you can find out what you need to pay in the franchise disclosure document. A lot of companies require ongoing royalty fees as well, for ongoing use of their brand name and system.
If your business needs to operate out of a building, you’ll have to pay rent every month as well. The building will also need furniture and fixtures inside. Office equipment and computer systems will also be required.
The cost of starting a franchise varies. Some are relatively inexpensive, only requiring an initial investment less than $5,000. Some companies charge between $30,000 and $50,000 though. If you have the necessary funds, you could even find opportunities that require an investment from $100,000 to $3,000,000.
In addition to the upfront costs, you also need to take into account the operating costs. If you have to pay a lot of fees and other payments every month, then it can put a significant dent in your profits.
Some of the top opportunities named by Entrepreneur magazine are Vanguard Cleaning Systems, Jan-Pro Cleaning, Kumon Math and Reading Centers and Stratus Building Centers. You may have heard about these well-known companies. In general, the more well-known the name, the more expensive the licensing fees could be. With well-known companies, your chances of success could be increased just because of that. That’s why some people are willing to pay a premium for the name.
At the same time, there are top brand name franchises that can be started for less than $10,000. It’s not just about the licensing fees, the total start-up investment also includes fixed equipment investments and office rentals can quickly bloat up the cost of starting a new franchise business opportunity, regardless of the brand name.
The lowest cost franchises around are business opportunities that can be run from home and do not require heavy capital investments into the business. So if you value a good brand name and but are on a limited budget, look into franchises with these two characteristics. You can find a lot of low cost franchise opportunities that are home-based. They’re much less expensive since there’s no building to rent. You would even have the option of running the business on a part-time basis. That would be a great option if you already had a full-time job.
7 Best Low Cost Franchise Opportunities & Business Opportunities
You’ll find many different types of low cost franchises to choose from. Some of these businesses may not be offered in a traditional franchise opportunity format in terms of their support and licensing agreements, but are low cost business opportunities which are currently available or for sale.
1. Plenty of people drive cars, so you could start a business repairing or washing cars. Other options include window tinting, radio/CD player installation, and security system installation.
2. Commercial cleaning franchises are also quite popular. There are plenty of businesses in your area that need to be cleaned on a regular basis. One of the most popular franchises is Vanguard Cleaning Systems.
3. Many people also have pets. You could surely find a low cost franchise that provides pet training or grooming. When people go on vacation, they would probably look to put their pet in a kennel, so that would be a great business opportunity too.
4. Fitness is always popular, as evidenced by the many weight loss products advertised on radio and television. Gyms, fitness clubs, and nutrition centers aren’t exactly the lowest cost franchises though.
5. You’ve probably bought items from vending machines on many occasions. Starting a vending machine business can be a great way to earn passive income. These machines could offer snacks, sodas, or even DVDs. DVDNow Kiosks Inc is one of the best options for getting into the DVD rental business.
6. Everybody has to file taxes at the end of the year. Therefore, starting a tax filing service would be a great low cost franchise opportunity. Of course, you’ll need the necessary training, but a franchisor like H&R Block will provide you with everything you need.
7. Yet another option would be to become a travel agent. This is definitely a low cost franchise opportunity since you could operate the business from the comfort of your own home. Home based travel agents can arrange cruises or other trips for individuals or even businesses.
As you can see, there are plenty of different low cost franchise opportunities available. Starting a franchise is often the better choice if you’re looking to start a business since you’ll be provided with plenty of advantages. Just make sure that you choose the right one to ensure that you make a profit. It is also important to pick an opportunity that will engage your interest.