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

 

Working as a Team – Relationships and your Finances

Welcome to Finance and Fury Today we are going to talk about relationships and money, and some strategies to start working as a financial powerhouse couple We all spend money and we all have relationships Doesn’t mean romantic relationships How has your relationship...

What allocation has the most consistent returns?

Welcome to Finance and Fury. Sorry for the sporadic episodes – flat out with EOFY - In this episode we look at different asset allocations and how they have performed over time in relation to their returns as well as their risk – with a final focus on their risk...

Agenda 2030 – A global conspiracy theory, or something to actually worry about?

Welcome to Finance and Fury, The furious Friday edition Intro ep to a new FF series – probably going to be the biggest Today – episode to give the bird's eye view of the overall topic - massive topic - ranges from education, energy, transportation, medicine prices,...

The Foundation Building Blocks of your Financial Future: Budget, Debt Management, and your Balance Sheet

Episode 32 The Foundation Building Blocks of your Financial Future: Budget, Debt Management, and your Balance Sheet Welcome to Finance & Fury! Today’s we’ll be looking at how to start, once you’ve set your financial goals. This is the starting point for anyone...

Affordable rental policies and unintended consequences

Welcome to Finance and Fury. Today’s episode is going to be going through some economic theory on some recent promises from politicians on housing policy – the focus on most of these has been on rental markets – for affordable rent – there’s lots of coverage on...

Revoking legislation on banks as they gain access to billions in newly created government guaranteed loans, what could go wrong?

Welcome to Finance and Fury, the Furious Friday edition. In the last two Furious Friday episodes, I’ve talked about the regulation and de-regulations on the monetary and fiscal sides. Covered the Banking Act of 1933 and the Glass-Stegall section of this – then the...

The year that was and making rational investment decisions

Welcome to Finance and Fury, and Happy New year. I hope you are all having a great start to the year. As it is a new year, a lot of podcasts and even previous episodes that I have done have been looking forward for the coming year, on setting goals or where to invest...

How to build a framework for making important financial decisions.

Welcome to Finance and Fury. Today’s episode – how to build a framework for decision making – for investments or wealth building strategies Not one set way to make a decision – everyone is different – everyone has different situations – people make decisions in...

Say What Wednesday: The tax implications of investing in shares; owning, holding, selling, dividends

Say What Wednesdays The tax implications of investing in shares; owning, holding, selling, dividends Welcome to Finance & Fury’s ‘Say What Wednesday’! Today’s question is from John; What are the tax implications of investing in shares, owning, holding, selling,...

Wars and the original purpose of Central Banks

Welcome to Finance and Fury, The Furious Friday Edition.  Today is an interesting episode - Central Banks and Wars – Often wouldn’t think of these two together – What is the purpose of a central bank? Financial stability, a lender of last resort, to smooth out the...

Pin It on Pinterest

Share This