How to Finance Your Fitness Franchise
There’s only one thing that is as fast-paced, exhilarating, and beneficial in the long run as an aerobics class, and that is owning an entire fitness franchise. As America becomes increasingly health-conscious, now is the time to profit. Investing in an established brand is exciting, but you may find yourself unsure when it comes to franchise financing. Here are tips to help you finance your venture.
Secure a Loan
Just because you don’t have the cash on hand to cover startup costs doesn’t mean there aren’t options. The most common avenue for new franchisees is to apply for a Small Business Association loan product. The money for the loan comes from a bank, but it is guaranteed by the SBA up to a certain percentage, making even ventures with slight risks involved eligible for cash. Another funding option is to use equity from a home loan or 401(k), but since this is not designed to sustain a business, it may prove counterproductive in the long run. When you begin searching for a loan, good credit, viable collateral, and liquid assets are a must. If your credit score is not up to the occasion, research methods of improving your score. Make sure your franchise financing is coming from a reliable source, preferably one that has experience with this type of loan, rather than one presented to you by a site that claims to offer free loan sourcing.
Create a Business Plan
A solid vision for your franchise is important when seeking lenders. Your business plan should include details about what the mission of your business is, the business structure, and what equipment is necessary for the facility. It should have resumes for yourself and anyone you plan to put in a management position to showcase your franchise’s competency. The foundation of your plan should be a marketing strategy. Analyze your consumer base, do research on competitors, describe your strengths and weaknesses, and formulate solutions to mitigate your weak areas. For example, there may be an established fitness center in your area, but you can mitigate this with an ad campaign that focuses on offering incentives for new sign-ups. Your business plan should be presented to potential lenders as proof that your franchise has direction and focus.
With proper research of both lending institutions and your fitness center’s demographics, franchise financing is not beyond your reach. Use your best judgement, take recommendations from current franchisees, and keep your business vision in mind: to provide a quality facility for people in your area to improve their physical fitness.