Q. Why do I need to put up my own money to finance a franchise?
A. There are a few reasons for this:
Q. Why do I need to provide a business plan and what goes into it?
A. A business plan is an indispensable requirement for going into business, as it forms the basis of your planning. When compiling a business plan for raising finance, ensure that it covers the following:
Q. How do I do a Cash flow projection?
A. The ability of your franchise to generate adequate cash flow is an important indicator of its viability; unless the cash flow generated by your franchise can comfortably sustain on-going operations, you may run out of cash and will have to close your business’s doors.
To project the cash flow of your business, calculate the amounts of money you expect to receive during a specific period and deduct the amounts you expect to pay out. Remember that while a strong cash flow is important, it is not an indication of profitability. Growing sales can generate positive cash flow for a while even if the business operates at a loss, but this is not sustainable.
Q. What types of funding for franchises are available?
A. There are various types of funding you might wish to consider, however you should be aware of their respective advantages and disadvantages. Types of funding include:
Q. How do I go about applying for a franchising loan?
A. Following your initial discussions with your Business Banker, you will be asked to complete a loan application. As part of the loan application, you will be asked to submit various documents, your business plan and a cash flow projection.
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