As a prospective franchisee, you will want to associate yourself with a credible brand.
Similarly, well-established franchisors are also selective when seeking franchises. Every brand will have specific requirements, but every company will consider the franchisees net worthwhile making their decision.
The brand will want to maintain its reputation, so your success matters to them. Your financial liquidity level has a bearing on your venture’s success. It’s crucial for the franchisor as this aspect affects their ability to continue expanding their business.
These basic requirements may seem a little daunting for someone just stepping into this industry, and building net worth doesn’t happen overnight. However, if you are determined to proceed in this direction, you will need to maintain the necessary level of liquidity. These are some valuable pointers to build your net worth to qualify for a franchise:
Before you consider investing in a business venture, you need to know the amount you have and the amount you owe. This is the starting point, and you must start building your balance sheet as it acts as a scorecard of your net worth. It is one of the first things franchisors will look at while determining whether you qualify to be part of their brand.
Many people underestimate their net worth. When creating their balance sheet, they forget about old savings accounts, collections, money owed to them, and valuables. Indeed, net worth is more about your liquid assets, but you must also include all these other assets when building your balance sheet.
There are many ways to increase your assets. One way to do it is to own something worth more than what you pay for it. You can apply this concept to everything from jewellery and cars to real estate property and more. While these are not liquid assets, they add to your net worth total.
Depending on the types of assets you have, you can turn some of them into cash. If you have a collection of racecars or original baseball cards just lying in boxes in your basement or garage, you can consider selling these collectibles. Even if you have included them in your balance sheet, selling them will bring you closer to your liquid asset goal. Something collecting dust has no actual value and when you plan to start a new business venture, having more liquid assets is a plus.
It’s rare to come by easy money, and you need to be disciplined in your approach while building your net worth. When a business or individual needs more cash, they can follow these three options:
Once you follow these steps, you will better understand how long it will take you to reach the required level of net worth qualification. If you are dedicated and diligent enough, you can decide how long it will take you to build your net worth before putting in your franchise application.
If you want any more information on working smarter, contact the experts at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact form, and one of our experts will contact you as soon as possible to answer your questions.
Thanks for reading,
The Franchise Institute Team
1300 855 435