Individuals as well as businesses of any size deal with financial woes, but if you want to start your own business or want to get into the franchise world, being financially aware of what to expect can help you avoid the many pitfalls that a lot of small business owners and individual deal with in a daily basis. Meeting payroll and paying for expenses for the business can be financially draining if you do not budget your money well.
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Pop Quiz: Do You Know the 5 Basics of Financial Literacy?
Financial literacy, financial capability, financial understanding.
Whatever the name, the core idea is the same: being equipped with the knowledge, skills and tools to manage your money and secure your future.
That’s no easy task, but here are five key money topics you’ll need to understand and put into action to make financial literacy a reality:
- Budgeting. Financial security starts with prudently managing your money on a day-to-day basis. That means spending less than you earn and saving consistently. Try to save at least 15% of your gross pay for short-term goals, long-term goals and unexpected expenses. Do it first and not with what’s left of your paycheck. Track all your expenses and set reasonable spending guidelines. Finally, don’t get caught up in how others are spending and undermine your own budget.
Plan Ahead to Be Your Own Boss
When Lisa Hennessy’s pet collie was diagnosed with a degenerative disease, she prepared a special, home-made diet for him, and discovered all her dogs loved it. So when she lost her job as a manager for an automotive parts distributor a few years later, she saw an opportunity to launch Your Pet Chef, a company that makes personalised dog food.
“We now make food for over 125 dogs and help them eat healthier every day,” said Hennessy, 52, who lives in Chicago in the US.
While Hennessy enjoys her new venture, which launched in 2012, she also faces a common problem among new business-owners: dwindling funds. Three years in, the business is self-sustaining but still doesn’t pay her a salary. “Now I’m trying to find investors so I can keep doing it and not drive for Uber [to supplement income],” she said.
It takes determination, experience, research, timing and hard work to start a business. And, many fail. But that doesn’t stop people from trying. In the US, 476,000 new businesses launched each month in 2013, according to the Kauffman Index of Entrepreneurial Activity. That same year, more than half a million new businesses were started in the UK, according to StartUp Britain. In Australia, about 300,000 new small businesses launch each year, according to the Reserve Bank of Australia.
10 Questions to Ask When Franchising Your Business
Your business is booming, easy to duplicate and ripe for growth. You’ve always dreamed of expanding to multiple locations. You decide the time is right — you’re making the leap to franchising.
Like tying the knot, becoming a franchisor isn’t an endeavor you rush into. With so many opportunities for failure, it’s critical that you do your due diligence when researching how to properly franchise your brand.
From budgeting for up-front costs, filing the right legal paperwork, vetting trustworthy franchisees, to scheduling royalty payments, there’s no shortage of challenging tasks ahead. But, if you play your cards right, your brand could one day be the next Supercuts or Subway.
Here are 10 essential questions to ask when franchising your business:
