Posted on:September 2, 2021
Whenever you start a new business, franchise or otherwise, you’ll need to commit to a financial investment. For many aspiring business owners, this is one of the most nerve-racking parts of the process. However, with a lot of research and a little help from Tutor Doctor, you can get your finances in order, so you feel prepared to invest in the business of your dreams.
Determine Your Net Worth
Most franchisors will require you to have a minimum net worth consistent with the amount of money it takes to franchise. They want to make sure you have the wherewithal to commit to your investment and fund your initial expenses.
Your net worth describes the dollar sum of all of your assets minus all of your debts. To determine your net worth, you’ll need to list all of your assets, or everything you own. This includes all of the money in your accounts, real estate, cars, bonds, securities, etc.
Next, you’ll need to total your liabilities, or your debts. This will include things like your mortgage, auto loans, and other current bills. Once you have the sum of each, subtract your liabilities from your assets and voila! You now know your net worth.
Evaluate Your Credit
If you’re going to be applying for a loan, you’ll want to check in on the health of your credit. Be aware that credit bureaus are obligated to give you all the information they have on your credit history. This will give you the opportunity to scan your reports for mistakes, rectify issues, and brush up on your financial standing.
Now is a good time to pay off any outstanding debt, if possible. Lenders will be happy to see you’re capable of paying back loans.
Prepare for Conversations About Finances
Talking about our personal finances can be uncomfortable, but this is a necessary part of the process to starting an education franchise or any other small business. When speaking with lenders, it might be helpful to outline what you want to cover in your conversation. This can be a particularly useful tactic if you need to explain some blemishes on your financial records.
Apply for Loans
While some franchisees have enough cash on hand to fully fund their education franchise, others need to seek funding solutions. As an entrepreneur, you may have many types of loans available to you depending on which country you reside in. In the U.S., popular types of loans include unsecured loans and Small Business Administration (SBA) loans.
Ask About Funding Partners
Many franchisors are partnered with preferred financial institutions which you can potentially use to obtain funding. This simplifies the loan process by taking away some of the stress off of choosing a lender. Plus, this lender will be familiar with your franchisor, your goals, and the process, which will likely save you time.
Tutor Doctor has financial partners in multiple countries that allow us to pair our candidates with reliable funding options. In special cases, we also offer financing for qualified veterans and young entrepreneurs looking to start an education franchise.
Convert Your Retirement Funds
In some countries, you may be able to rollover select retirement funds into funding for your education franchise. This type of funding may come with less debt and enable you to provide some financial cushion as you start your business. If you have a retirement fund, talk with your financial institution about whether or not this is an option for you.
Investing in an Education Franchise
Are you considering starting an education franchise like Tutor Doctor? To see what it takes to become a franchisee, head to this blog. If you’re ready to go ahead and get the conversation started, reach out to our team.