How much personal reserves should a new franchise owner expect to need?
It's recommended that a new franchise owner plan to have six to 12 months of household living expenses in reserve on the chance that the start-up phase of your new business takes longer than expected. This is in addition to business working capital. An unrealistic expectation of early business success is a classic issue leading to under-capitalization and premature business failure.
A significant psychological factor related to being in business for yourself is the potential for not receiving a steady income stream. Know going in that franchise ownership will not be a short-term income and wealth solution. As with anything worthwhile, patience is a virtue that can pay off in the long term.
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Related Categories: Business Start Up, Cash Managment, Entrepreneurship, Family Business, Franchising
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