Have you searched for “franchise opportunities near me” but been too nervous to start your own because of finances? Don’t be, because there are several opportunities out there for people with limited startup capital. You don’t need to have a big franchise like McDonald’s to be successful. There are plenty of small franchises out there that will allow you to open your own business and make decent money without causing financial stress from the start. Here are some points to consider when searching for an affordable franchise.
How Much Money Do You Need to Start a Franchise?
How much money you’ll need to open your own franchise will vary depending on the franchise you choose, the location you plan to have it, and the amenities you’ll want. In fact, franchise startup costs can range anywhere between $10,000 to $5 million, although most franchisees spend somewhere between $100,000 and $300,000 to start theirs. Many franchises cost $50,000 or less. We’ll talk about those in the next section.
Some of the costs you’ll have to consider are:
- Minimum cash required refers to how much liquid capital you’ll need to open the franchise. Liquid capital consists of your assets that can be quickly converted into cash.
- Net worth required refers to the value of your assets minus your debts and liabilities. Not all franchises require a net worth. However, it is important to take note of because it can guide your spending decisions. To figure out your net worth, use this net worth calculator.
- Total investment, typically listed as a range, is an estimation of how much it’ll cost for you to start your franchise. It covers all estimated expenses, such as initial fees, building costs, hiring, etc.
- Franchise fee indicates how much you’ll have to pay to the franchisor each year to use their brand name, sell their products and services, and cover the costs for training.
Now let’s take a look at some of the cheapest franchise options available.
What Franchise Business Is Cheapest?
If you’re looking for some of the cheapest franchises to start, consider opening one that costs $50,000 or less:
- The Grounds Guys® ($40,000): This franchise gives you the chance to lead lawn care professionals and build lasting relationships with local home and business owners. You can also offer seasonal services so that you can work year round.
- Pillar to Post Home Inspectors ($40,000): This franchise does home inspections and is perfect for anyone who is a people person and has an overall positive outlook on life. It also allows for a flexible work schedule, so you can make sure to have a good work/life balance.
- American Business Centers, LLC ($28,990): If you’re looking for low-cost home-based franchises, this one could be a good fit for you. This medical billing business allows you to work from anywhere and offers all franchisees live online training and free lifetime support.
And if you’re interested in food franchises under $50k or right at $50k, here are a couple options:
- Frios Gourmet Pops ($50,000): If you don’t want to pay for a building to have your franchise in, low-cost mobile franchises might be the right move for you. Frios Gourmet Pops is one of those franchises. You will be selling popsicles from a mobile Sweet Ride.
- CRAVE Hot Dogs and Barbecue ($50,000): If you’re big into barbecue and self-serve beer, you’ll love opening a CRAVE franchise. Plus, this restaurant also has ax throwing lanes, trivia nights, karaoke, bingo, game nights, live music, and more to build community.
How to Get Money to Open a Franchise
Even if you choose to open an inexpensive franchise, you will still need to come up with the money for it. If you don’t have the money on hand, or a family member or friend who you can go into business with, here are some other options for you:
- Commercial bank loans: These are the traditional loans most people think of. You will need a good credit score and your franchisor’s business plan to receive one of these loans.
- SBA loans: These government loans are reserved for small business owners. However, several franchises can qualify for this type of loan.
- Alternative lenders: You can get a loan from an alternative lender quicker and easier than you can get a commercial bank or SBA loan, but interest rates are typically higher, and you often have a shorter amount of time to pay back the loan.
- Franchisor funding: Some franchises will either offer you funding directly or will have a lending partner that you can borrow from.
- Retirement funds: You may be able to purchase a franchise with a tax qualified retirement plan like an IRA, 401(k), 403(b), 457(b), or SEP.
You can make your dream of opening your own business possible by using one of these lending options.
Where to Find Low Cost Franchise Opportunities
If you want to find the right low-cost franchise opportunity for you, check out FranchiseOpportunities.com. You can filter franchises based on location, industry, and investment level to discover the franchise that is perfect for you. Starting a franchise doesn’t have to break the bank. Start searching for your dream career today.