Contrary to what you may be seeing on the news, not all businesses have been affected by the COVID-depressed economy. There are many businesses, including franchises, that do well in both up or down economic climates. If you've thought about owning your own business but are concerned about the economy, you may be missing the boat. There are many advantages to investing in "the right" franchise business today.
Here are five reasons why it's a great time to buy a franchise:
1. You'll have your pick of good employees. The Bureau of Labor reported the unemployment rate is way above typical averages. Jobs in hospitality and retail continue to fall. Even professions that were always safe such as doctors and nurses, have taken a hit because of the pandemic.
What does this mean for you? It indicates that good employees are plentiful, and you should be able to find and retain great people to help you start and grow your business. Whether your new franchise requires IT, marketing, sales, or skilled labor positions, you'll have more people to choose from in the current economy. Even better, you'll be creating jobs and helping your community!
2. Interest rates are at an all-time low. A weak dollar usually means lower interest rates. You'll need to have some cash in hand to buy a franchise, but many business owners borrow a portion of the amount required to buy a franchise. Just don't expect to get these rates if your credit rating is low. You'll need a credit score at least in the 700s (the exact number depends on the lending institution) to qualify. If you are ready to become a business owner, don't wait for rates to rise. A low-interest rate will mean more money in your pocket.
3. Money is available. Many banks recognize that a franchise purchase is a "safe" investment. While mom and pop start-up businesses are deemed risky, some financial institutions know that franchising has a verifiable success record. Therefore, even in a weak economy, banks are willing to provide loans for franchise purchases. If you need help finding a bank that specializes in franchise lending, contact me for a list of franchise finance specialists.
Some of the reasons that buying a franchise is considered a safer investment than a start-up include:
4. You'll find lots of business property available and at reasonable prices. Prices for leasing or purchasing a business location can fluctuate along with the economy. It is currently a renter's or buyer's market, but as the demand for space increases, so will the cost. If you find a reasonable rent in a good location, act quickly. Your franchisor should help you choose which property and location will be best for you, but you may also want to hire someone to check out the terms of your purchase or rental agreement to be sure you are getting the best deal possible.
5. Customers who didn't survive the pandemic are displaced and looking for a new establishment to take their business to and spend their money. If a local nail salon closed its doors, those customers will still need that service. If a big gym couldn't sustain itself, those gym enthusiasts will be on the hunt for a new workout spot.
If you genuinely want to be your own boss, steer your own course and take control of your career, this is an excellent time to buy a business, especially if you invest in a solid franchise with excellent training and support.
Tips for Buying a Franchise:
If you cover all of your bases and follow the concept's operating systems, you may trade in your commute and your cubicle to become a COVID-millionaire.
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