Franchise Advice
Eight ways to save money as
a start-up franchisee by Carl Reader
E
very year, thousands of entrepreneurs decide to start a franchise business. In my day-to- day experience, I find that most of them would have
been able to save some money had they taken correct advice and researched their business fully at the outset. Here are eight tips that every new franchisee could benefit from: 1. Carry out diligence – the biggest financial mistake is investing in a franchise that isn’t suitable for you. Before committing any money, you should ensure that you have done your due diligence and that the opportunity is right for you.
2. Further research – there is a great start-up community, and several websites available to help you save money in your day-to-day business. Whether you find new suppliers, business grants, or just a sounding board for general advice, these efforts are worth investing into your new business.
3. Review your funding – it is often beneficial to engage a finance broker, such as Franchise Finance, who can ensure that you have the right mix of financing, at a cost-effective rate, should you require external funding for your franchise.
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4. Initial tax savings – a bfa-affiliated chartered accountant will be able to help you understand whether you are claiming as much tax relief as you can, as early as you can. Franchise tax legislation is reasonably complicated and, as such, it pays to take expert advice.
5. Ongoing tax savings – the tax savings shouldn’t be limited to the initial costs of setting up the franchise. A good accountant will ensure that you are structured in the right way to achieve both your personal and commercial objectives in a tax-efficient structure.
“A bfa-affiliated chartered accountant will be able to help you understand whether you are claiming as much tax relief as you can”
6. Franchise agreement reviews – it is essential that legal advice is taken on a franchise agreement before signing. Although these agreements are generally non-negotiable, this advice will ensure that you are fully aware of any commitments that you are entering into.
It is also strongly recommended that you use a bfa lawyer who understands franchising, as they will not aim to negotiate the non-negotiable and will save you money in the long run!
7. Preferred suppliers – almost every franchisor has a list of preferred suppliers, who can help their franchisees save money. Usually, the franchisor will have gone to some effort to ensure that the service levels are high and that the price is market leading. In fact, many will ensure that you receive discounts beyond those that you could negotiate yourself.
8. Online bookkeeping – by using the latest technology, you can automate a large proportion of your bookkeeping, saving significant amounts on your business administration costs. For a typical start-up, the cost saving of using bank feeds could be £200 per month. Your accountant should proactively provide you with details of these services that can save you money. n
CARL READER
Carl Reader is a partner at Dennis & Turnbull Chartered Accountants and Strategic Advisors. For more information contact:
carl.reader@
dennisandturnbull.com or call 01793 741 600
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