|November 17, 2019||OPENING A FRANCHISE -THINK TWICE||no comments|
COLLECTIVE BUSINESSMEN ASSESSMENT OF OPENING A FRANCHISE-BUSINESS MONTHLY!
So you want to open your own business. All you need is money.
First you buy the Franchise. Then you look for a location approval.
Now you need 6 months at least to set up your new location. Why so long, let me explain. First you need to renovate the entire place from the floors to the Roof.
Next in case you have no gas lines, you need to get them. That can take you months. In the meantime, you need to pay for your Insurance on the new place, fork over 3 months security as usual, hope you get three months free to set up, even if it takes 6 months to complete with unexpected problems than chronically come up. Now get your place inspected by the Department of Health and with approval and stickers for your window you then have a Grand Opening.
Costs factors-Let’s say your rent is $6,000 dollars. Now add 3 months security, add the electrician costs, plumbers costs, Architect Fees if any, permits, Workman’s comp liability besides Liability Insurance costs, renovation costs, interview new employees which usually is a minimum of three people, hire an accountant, and by the time you are done you are in for at least $100, 000 dollars. Not bad right?
Now add your monthly costs up to just break even. That is about $20,000 dollars. (rent, electric, gas, insurance, payroll taxes, salaries, etc.) Or weekly $5,000 dollars minimum. Broken down to daily is about $675 dollars. Not bad right? So every day you must make $675.00 dollars to begin before any profits are made. And if a Food Franchise you have dollar specials, $2 dollar specials to draw people in as a grand opening event.
Opinion: If you anticipate laying out $240,000 dollars per year in expenses for ten(10) years that comes out to $2,400,000 without rent increases which was not used in this calculation. Now add the beginning expenses of Franchise fee, set up fees, unexpected fees, renovation fees, security fee which you do get back at the end, but you must be prepared to lay out about $2.5 million dollars from year 1 to year 10.
DOES THIS SOUND LIKE A SOUND PROOF INVESTMENT TO MAKE WITH YOUR MONEY? THINK TWICE!
HOW MANY BUSINESSES FAIL IN NEW YORK STATE? HOW MANY PEOPLE LOOSE MILLIONS OF DOLLARS?