One of the primary reason investors get into franchising is to make their money work for them. This is the case no matter if you live in New Jersey or California. For that reason, most folks looking into franchises ultimately want a situation where the business makes money for them sooner rather than later. But how soon you’ll make money varies from one business owner to another. Some franchises are just built to turn profits quicker than others and there are many other factors that must also be considered. Aside from the business itself, there are some personal factors that will increase or reduce the speed at which you move toward profitability.
Some of those personal issues a franchisee must be able to anticipate and overcome would include:
- Management – Depending on the type of franchise you purchase and business model it employs, there are many levels of management that can motivate your employees to excel. Choosing a model that highlights your strong suits (hands-on vs. semi-absentee) can greatly increase your chances of reaching profitability.
- Finances – More than likely you are in the position to purchase a franchise because of sound financial decisions, but it is still worth mentioning that you should ensure you have the funds to help you stay afloat while the business gets its footing and slowly makes the jump to turning a profit. Failing to have the financial backing in place to last until profitability will put you in a position where concessions have to be made that could derail your franchise opportunity if you’re not careful.
- Mental Fortitude – The first year of business ownership is an emotional rollercoaster. From the excitement of starting a business, to the disappointment of losing your first customer, to the anxiety of wondering when you’ll make a profit. Having a tough mental attitudewill help you withstand the ups and downs as you journey towards profitability.
- Available Resources – These would include your network of associates and appropriate industry contacts. Using your connections to meet the right people and open the necessary doors will help your business ramp up faster.
At this point, you may have noticed that a specific timeline has not been given as an answer to the question at hand. The reason for this is because there are too many factors in the New Jersey market to accurately predict your moment of profitability, but we’ve outlined the tools for how to get there. On average you can expect to take between 12 months to reach breakeven, which can be quite a while depending on how liquid your finances are. There are two other strategies for determining when you might reach profitability and they are speaking to established franchisees and using the FDD (franchise disclosure document) to gauge your rate of return.
These two strategies will help you get important information on the daily operating expenses, training, software and insurance data that you need to make sound financial decisions during your journey to profitability. Working with a franchise consultant in New Jersey like FranNet means that you’ll have someone by your side to go over your finances with you and help you cover all the bases so you are ready to jump into your franchise business and succeed as quickly as the market will allow.
About FranNet NJ NYC
FranNet of New Jersey and New York City has several franchise experts to help you explore the world of franchise ownership. At FranNet, we provide no-cost guidance, information and support to individuals who are interested in purchasing a franchised business. We are experts in helping our clients evaluate the various types of franchise opportunities in the marketplace today. Our goal is to not only help entrepreneurs’ dreams of business ownership come true, but to help people make sound business decisions that give them the best chance for future success. For more details visit – http://www.franchise-njnyc.com/