Accounting and Franchising: Tips to Help You On Your Way
Starting a new business is a significant decision to make, whether you build it from the ground up or buy a franchise under a well-established business name. There can be much to think about, particularly when it comes to accounting and your finances, to ensure you’re making a wise buying decision.
If you’re starting to explore your franchise purchasing options, we’ve included some helpful tips and advice to consider.
Understand What You Get for Your Purchase Price
The purchase price of a franchise is an essential factor to consider before you sign on the dotted line. You must understand the value you’re getting for that money and whether or not it comes with equipment, customers, chattels, or anything else other than the brand name.
If you were to compare two similar businesses and notice that one is more expensive than the other by a considerable margin, read through the details to find out why that is. For example, some lawn care businesses might come with an extensive client list, while others might come with all the vehicles and equipment you need to hit the ground running.
Learn About the Franchise Fee
You typically need to pay an ongoing franchise fee when you purchase a franchise, which might be a new concept if you’ve only previously built your own businesses or have never owned a business at all.
It’s important to find out what your franchise fee is for, what it covers, and the frequency. Most franchise fees cover application costs, training, marketing and advertising, and general franchisor costs. However, every business model is different, so don’t be afraid to ask what you’re paying for.
Identify All Business Costs
There’s more to purchasing a franchise than just paying the initial purchase price. You must also factor in the costs of running your business, such as the purchase price and maintenance costs of vehicles and equipment, as well as marketing and travel expenses.
Identifying these costs early can be important for establishing your service prices and setting yourself up to turn a profit.
Get Accounting Help
You might be passionate about your prospective new business and know you’ll provide your customers with standout service, but that doesn’t mean you’ll be an expert in all aspects. Many new business owners struggle with their bookwork, whether they work with a franchise or start their own business from scratch.
Some of the best franchisors offer all financial information, such as costs, budgets, and how accounting works. They also provide you with invoices so you can enjoy a consistent structure when managing customer payments. However, you might still like to contact a local accountancy agency for help, especially if you’re unsure how to file business taxes, what your tax code should be, and how much you need to set aside for income tax and GST purposes.
Establish a Pricing Structure
You can’t pull a product or service figure out of fresh air and expect it to be the magic number for helping you turn a profit. An in-depth analysis of your costs can be required to establish a pricing structure that promotes profit potential.
This can be important during the early days of owning a business or before you decide to buy one. Learn more about your costs, check out competitor pricing, and even talk to other people in the same industry as you to find out what they charge and how they calculate their costs.
It’s important to strike a balance between turning a profit and providing a cost-effective service for your clients.
Understand How to Make Money
Two people could own the exact same business and sell identical products and services, but that doesn’t mean they’ll make equal income. Many factors can contribute to how you make your money, including:
Health and safety requirements
The equipment you use for the job
How well you align yourself with your brand
The systems you use to manage daily operations
Your approach to marketing
How well you nurture your current clients and make way for new ones
Your drive to succeed
A solid business plan and goals
There’s more to making money than simply providing a product or service, so it’s important to have a firm grasp of what contributes to a successful business to stand a chance of becoming one yourself!
Consider a Crewcut Franchise Today
If the time has come to explore your business ownership options, a lawn care franchise offering lawn mowing, hedges, section tidies, and other convenient services might be worth your consideration.
Crewcut can provide you with helpful information about equipment, finances, training, marketing, and everyday business operations so that you can make a well-informed purchasing decision. Contact Crewcut today to learn more and see if this new career direction is right for you.