How to Buy a Franchise: Defining Investable Cash and Understanding Your “Why”

Embarking on the journey to become a first-time franchisee marks a significant decision in any aspiring entrepreneur’s career. Behind this pivotal choice lies a profound motivation known as your “Why,” which serves as the driving force that fuels your entrepreneurial spirit.

In the latest installment of the “How to Buy a Franchise” Masterclass, 1851 Franchise publisher Nick Powills explains how you can realize your own “Why” and define your investable cash.

Before you can invest in a franchise, you first need to define how much money you have and how much you can afford to spend. Knowing how much capital you possess is key to being able to identify franchise opportunities within your investment range.

“If you’ve always dreamed of owning a swim school franchise or a larger childcare franchise with a $2 million price tag, but lack the capital to make it happen, that’s an example of when the dream and execution don’t align,” said Powills.

When considering cost, it’s also important to think of how many franchise units you can afford. As mentioned in a previous Masterclass episode, if you want to see a significant return on your investment, you should be financially prepared to afford three units. Although that’s not always the case, it should highlight the importance of assessing your financial capacity in relation to the scope of your franchise ambitions.

As you navigate through your franchise journey, remember to always use your head, heart and gut. Use your head to objectively assess your financial capabilities. Follow your heart and passion when considering different franchise opportunities and listen to your gut instinct, which can provide you with insights into the culture of the brand you’re considering.

Beyond the tangible aspects of investable cash, the “Why” holds equal significance. Your “Why” is the underlying reason that propels you to pursue life as a franchise owner, whether it’s a desire for more family time, financial success and freedom, or the ability to build a lasting legacy. Understanding your “Why” is pivotal as it effectively serves as the driving force that will shape your franchise venture for the foreseeable future.

As you take the plunge into potential franchise ownership, keep in mind how much you’re actually able to afford, let your “Why” guide your path, and you will be well on your way to turning your aspirations into reality.