Welcome to Finance and Fury, the Say What Wednesday edition

John’s Question:

I thought a useful topic could be about pros and cons off starting a business and starting your own business vs buying a franchise system etc. and using a business to achieve financial freedom. 

Personally, I have been looking into options to start a business both online and franchises. I have found that starting an online business can have a very low startup and ongoing costs, which is attractive but finding something that can be worthwhile is difficult. So far I have been leaning towards buying a franchise due to the systems already in place and there service or product already being tried and tested. But obviously, this incurs a higher startup cost and ongoing franchise fees etc. 

But I am not a skilled tradesman or professional such as a website developer or marketing expert etc.  with a unique selling proposition, so therefore a franchise system is most likely a better option for me to pursue. 

 

Starting an online business or franchise

First – Check out the Episode towards the start of the year about figuring out what type of business to get into – Won’t cover that part – but say that you have an idea in mind about the type of company:

How do you start a business?

  1. What you need: idea, clients, cashflow, capital
    • What types of business have high upfront capital requirements? I.e. higher barriers to entry
  2. First key steps – what do you need to have planned out?
    • What are the most important things to have ready before starting?
    • What are the most important things to focus on in the first 6 months?
    • Problems will happen along the way – what are some major ones that you have seen, and how could these be avoided?

What if you don’t know what type of business to get into, or don’t have a selling proposition? – Purchase a Franchise

How does the purchase of a franchise work?

  1. What are the costs, and how much support is provided?
  2. Can you get financing to buy a franchise? If so, what LVRs?
  3. Have you seen any types of franchises which are the most profitable?

What are the best ways to structure each?

  • Best way to structure a franchise (Trust, company, sole-trader etc.).
    1. By yourself
    2. Partnership
  • Best way to structure a business (Trust, company, sole-trader etc.).
    1. By yourself
    2. Partnership

Which has better cashflow potentials?

  • Any type of franchises that have more consistent earnings than others?

How do the valuations work on a franchise compared to a company?

  • Which industry/types receive the best valuations?
  • How easy is it to find someone to buy your company/franchise if you are looking to step back?

Summary of pros and cons of starting a business vs buying a franchise system

  1. Pros of a Business – When would you want to start a business?
    • Does it give more control over service offering?
  2. Pros of Franchise – When would you want to buy a franchise?
    • Are they more successful than starting your own?
  3. Cons of Business – When would you not want to start a business?
    • Any horror stories you have
  4. Cons of Franchise – When would you not want to buy a franchise?
    • Any horror stories you have

Thanks for listening, 

If you want to get in contact, you can do so here

Check out the Walker Hill Blog

 

How much do you really know about cash and how it works?

Episode 26 How much do you really know about cash and how it works? In this episode we discuss Cash. We will run through what type of asset it is, how the currency system works, and how it can be manipulated! We also discuss: The good old days of the Gold Standard...

Say What Wednesday: The ups and downs of Bitcoin – currency, investment opportunity, both… or neither?

Say What Wednesday The ups and downs of Bitcoin - currency, investment opportunity, both... or neither? Today’s question comes from Richie, who asks, “Have you been following the Bitcoin ETF at all? If so, are you able to do an episode on this and if it is worth...

Say What Wednesday: Financial Independence, spending habits, neurotransmitters, and what you can start doing today

Say What Wednesdays Financial Independence, spending habits, neurotransmitters, and what you can start doing today Today’s Say What Wednesday question is from Paul; “Hey fellas! I think you guys are doing a great a job. Always a fun listen. Question; I was wondering...

Cannibalism, Nazism and property rights

Furious Friday - Part 2 Cannibalism, Nazism and property rights Welcome to Part Two! If you haven't already...listen to Part 1 before jumping into this episode Let’s look at these claims: Means of production owned by the public or state This removed property rights –...

Leveraging: how the wealthy get wealthy, how the rich get rich!

Episode 7 Leveraging: how the wealthy get wealthy, how the rich get rich! This is how the wealthy get wealthy, how the rich get rich! We’re discussing the two-tiered economy and leveraging – taking something that you don’t have, investing it, and growing that over...

Furious Friday: Is social media at a tipping point?

Furious Friday Is social media at a tipping point? Today we’re looking at the market environment for Facebook, Google, Twitter, YouTube etc… their costs are going to far outpace what their revenues will be. Are they on their way up, or on their way down? EU copyright...

How to be wealthy; Germs, Monopoly, and Competition Vs Cooperation

Episode 2 How to be wealthy; Germs, Monopoly, and Competition Vs Cooperation. Hey guys, and welcome to Finance and Fury. Today the misunderstanding we're going to be tackling is how to be wealthy. There seems to be a lot of “rich-hating” going on around at the moment,...

Furious Friday: The Great Depression – Are the solutions actually what created it?

Welcome to Finance and Fury the Furious Friday edition If you have been paying attention to the news then you would know about the current GDP per capita recession. Today we will look at recessions and different policies to help boost the economy. It is all apart of...

What does your path to Financial Independence look like?

Welcome to Finance and Fury, The Say What Wednesday edition Today is a special episode – we have another resource available on our Resources Page... the Monthly Investment Targets Calculator  Question from Nick “I’m sure as a Financial Adviser you are quite aware of...

Say What Wednesday: The perfect investment mix

Say What Wednesdays The perfect investment mix Today’s Say What Wednesday question is from Linus. Linus asks, ‘I was just wondering what you think the ideal weighting of Australian (ASX200) ETFs, similar international ETFs and Bonds is in an investment portfolio? Love...

Pin It on Pinterest

Share This