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Expanding Cash Flow for Your Expanding Franchise

So, you’ve seen some success with your franchise opporunity. You’ve seen your small business grow. And now, you’re considering expanding beyond your single unit to let your product/concept reach as many people as possible. Everything is in place except one thing: the money! Make no mistake; top franchises take a lot of money, and you’ll have to have at least a portion of it onhand before you start meeting with potential franchisees. This money will be essential for developing your UFOC, franchise-agreement papers, trademark registration, market research and advertising for potential franchisees.

So, where does all that money come from? If you have good working capital, it may come from your business. But do make sure you keep enough funds for the parent company aside.

Another thing to consider is opening a company-owned unit first. This will not only help you gain experience in working with more than one unit, but it also can be the flagship store for your succesful franchising business. The company-owned unit can also be an additional source of income.

The next option is to seek money from investors. For that, you must have your financial papers in perfect shape. Public funding is another idea, if you have a major franchising plan for future. Also, boast any well-recognized, top franchise brand name. That will help you to get money from the market. There are also SBA loans. Most people think SBA loans are only for people starting a small business. But they can be taken to expand a business, as well. 

To get an SBA loan, consider first whether you qualify as a small business. This is different for each category; for example, in manufacturing units, a company employing less than 500 people is considered small, whereas in retail industry, annual sales of below $13.5 million will make you a candidate for SBA loans. You have to approach a SBA lender with your up-to-date balance sheet and income-proofs to get your loan sanctioned. The banks that actually give the loan will see further criteria such as cash flow and profitability factor in the future. These loans are better than loans from outside lenders, because of the low market rates and longer repayment terms. That definitely means more cash flow to expand your business!

Still want to learn more? Contact brandEXPANSION.