What are the Startup Costs of a Home Improvement Franchise?
For aspiring business owners who have a flair for home renovation and kitchen remodeling, investing in a franchise system can reduce start-up costs and provide the resources and expertise not available to independents. However, you do need to do your due diligence and shop around a bit among the many different home improvement franchises to make sure you are getting the resources you need from your investment. This entry will look at the many different startup costs that go into owning a home improvement franchise and how you can finance it.
The Initial Franchise Fee
The very first payment you will need to make to start a home improvement franchise is the Initial Franchise Fee. This is due in a lump sum upon execution of the Franchise Agreement. The Initial Franchise Fee can vary widely among different home improvement franchises. Some will charge you upwards of $100,000. With Kitchen Solvers, the franchise fee is $20,000, and they allow you to finance a good portion of this with an adequate down payment.
Different home improvement franchises will include different services in this franchise fee. Kitchen Solvers provide pre-opening training to new franchise owners once they pay their Initial Franchise Fee. The new franchise owner only has to pay for his living and travel expenses as he attends the training. This costs as little as $1,000.
There are a variety of other fees that you should be aware of before you jump head first into owning a home improvement franchise. These expenditures tend to vary quite a bit in how much you should expect to spend. In general, the more money you have, the better you can weather any financial uncertainty.
With Kitchen Solvers, you can open your new home improvement franchise for as little as $30,000 depending on the amount you finance. To launch your business, you will need to have cash on hand for startup costs, cash flow, and additional advertising. We recommend the $30,000 minimum investment upfront with the financing options from Kitchen Solvers and third parties.
With all of these costs added up, you should plan on it costing between $40,000 and $80,000 to get your home improvement franchise off the ground if you go with an affordable franchisor like Kitchen Solvers. This number may be quite a bit more if you choose a different franchisor. Also, with Kitchen Solvers, you can get financing.
Financing Your Home Improvement Franchise
In the wake of the financial crisis, banks have clamped down on their lending for the past several years. This has made getting a loan quite hard. Fortunately, the financial environment is beginning to improve. There are a number of routes you can take to obtain funding for a home improvement franchise. Here are the main ones that are used by Kitchen Solvers franchisees:
• Unsecured Loans – Finding a bank willing to issue pots of gold at an end of a rainbow was much more likely than finding one willing to issue unsecured loans when the financial crisis was at its worst. Things have changed. Unsecured loans are again an option for borrowers with great credit scores of over 720.
• SBA Loans – For people with credit scores of 650 and above, another options is a loan from the United States Small Business Administration (SBA). These secured loans have stringent requirements, like 30 percent equity required from the borrower. Also, collateral is required. Plus, the SBA likes to see that there is a working spouse who can repay the loan if needed or some other evidence that they will be able to get their money back.
• Retirement Savings – In order to start a business, you can tap into your retirement nest egg tax free. You will want to consult with a professional for this process, but essentially, you create a C corporation with its own 401(k) plan, then you roll your old 401(k) into this new company’s 401(k). You can then direct the 401(k) to invest in the company’s stock.
You can also use any combination of these three tactics together.
Are You an Ideal Franchise Candidate?
Does the above information have your interest piqued? Are you wondering if becoming a Kitchen Solvers franchise owner is the right choice for you? If so, you should get started in the franchise candidate process. With all franchise candidates, the FranMatrix Matrix CPR assessment tool is utilized by Kitchen Solvers.
Using this excellent tool, we can very quickly assess a franchisee’s work style, core competencies, and values and motives. For those we are working with, the FranMatrix Matrix CPR qualification assessment is available free of charge. To give you an idea of what we are looking for, the next few paragraphs will outline the characteristics that are most common in successful franchise candidates.
Collaborator and/or promoter work style types are what we look for in the best candidates. Collaborators are supportive, great at cultivating relationships, and warm. Of all of the work styles, they are the most people oriented. People enjoy being around the enthusiastic and friendly energy of promoters, who simply have a personality that shines. When it comes to communication and people skills, they are the most gifted.
For achieving success, the strongest skill set among the core competencies is sales and promotion. This is followed by service. Sales and promotional skills are needed for building up your franchise. Other characteristics within this skill set are strong client relationship management skills, effortless conversation and listening abilities, strong work ethic based passion and dedication for serving customers, and ability to practice a consultative sales approach.
Emulators and/or achievers are the most sought after values and motives in the best candidates. Emulators are people oriented business builders, focused on winning the confidence of clients, and confident. Achievers are never satisfied until they have dominated their market. They are tenacious business builders. They have a deep commitment to success and lead goal oriented lifestyles motivated by achievement.
If you are interested in learning more about starting a home improvement franchise, contact Kitchen Solvers today!Back