9 Ways to Save Funds When Opening Your Franchise
Starting a business can certainly be expensive in the short-run. From franchising rights, to obtaining a space, to hiring employees, etc., prices can add up quickly. And while you'll soon be making money, that doesn't mean writing check after check isn't any more difficult at the time. To help stretch your funds even further, and to make this transition a little easier, there are a number of ways you can budget and/or cut costs.
From dropping your personal spending to ensure the business isn't pumping out more dollars than it needs to, you can be well on your way to creating a frugal (yet still fully funded) model that's on its way to turning a profit ASAP.
After all, it's simple math, less money out means less money that has to be made up later. To avoid excess spending and to gain peace of mind during your budget process, check out these easy steps, which have been proven by industry pros.
1. Less is More
Do you need it? If the answer is no, don't buy it. This is a very simple concept that somehow gets thrown to the wind when folks open up a new business. They see something fun or new and convince themselves it will be used in their company. And we get it, you're excited, you want new supplies! However, if it's not necessary, it's just costing you extra dollars. Stick to that hard line for a happier bank account.
2. Call in Your Favors
Who do you know? Or who owes you? All those favors you've been racking up over the years – or all of the friends you've been keeping in contact with – it's time to "cash" in. Call others or send out emails and ask if they can help. This doesn’t mean you have to take advantage. BUT, if there's something you can pay with other than dollars, you can save that much more on opening your doors.
3. Shop Around
Don't be afraid to ask for a deal. When buying furniture, supplies, etc., prices can vary from brand to brand. Just because you're in need doesn't mean you have to take the first number that comes your way. Look at other companies or ask if there are deals for buying in bulk. You might just save a few bucks for your trouble.
4. Don't Over-Buy
However, don't purchase more than you need to at a time. This will only create unnecessary overhead, and keep you sitting on funds that could be easily spent elsewhere. Instead, you're staring at inventory and/or supplies that still won't be used for months (or further) down the line. Meanwhile, you also have to find storage for all this gear, which could potentially take up important building or business space.
5. Unless There's a Per-Unit Deal
Take the previous note, and throw it out the window – maybe. If you are purchasing in volume and can get a much cheaper deal by buying more, it might be in your best interest to do so. Run the numbers and see how much you'll save, how much space items will take up, and more. You should also be sure that whatever you're purchasing in bulk won't lose integrity and/or expire before you're able to use them.
6. Bone Up on Your Write-Offs
Did you know home offices can be a tax write off? As well as a portion of your utility bills? What about work miles, related supplies, and even certain discounts you give to customers? All of these and more can keep you from paying additional taxes. Make good friends with your accountant, or check out what's available in every purchasing category so that you are saving as much funds as possible. And not sending them out the door to Uncle Sam.
If you can do it yourself, it's a good idea to look into the feasibility. While you won't want to do everything in-house, many tasks can help save expenses by choosing to DIY. This goes for relatives and close friends, too. Take note of their best talents and use them to your favor (and your savings) by asking for their help on projects – whether it be business related, building improvements, or simply free cleaning labor.
8. Negotiate Rent
If you're looking in a high-demand area, this might not be a good tactic. (Ask your realtor to be sure.) However, when looking to rent and/or buy your business's space, you might be able to land a deal. Leverage your professionalism and ability to pay on time, paired with a great track record for taking care of things. And if all else fails, you can consider a discount on goods or services as incentive. After all, it's your business, serving up a few discounted tickets will well be worth a lowered monthly bill. Just be sure to get it in writing.
9. Apply for Grants
Depending on your location or business type, you could be eligible for a business grant. This is essentially free money (often with stipulations) so that you can open and run your company. Look into local and national options for funding that might be available to your particular venture. Winners can not only earn business-based cash, but great exposure in the process.
Opening up your business can be an expensive process. And while it will soon start earning money, in the meantime trying the above methods can extend your funds.