How to Budget for Your Franchise Store
Starting a franchise is an investment. But, it is an investment that can absolutely pay off over time. To set yourself up for the greatest chance of succeeding, you should take the time to prepare as much as possible. As part of that preparation, make sure to put together a thoughtful budget. While there will always be unexpected costs that arise, having a solid budget in place will help soften the blow when they do. Below are a few tips to help you develop a budget for your franchise store.
Sales and Revenue
Your budget should account for the revenue you anticipate coming in. As a new franchise owner, it can be difficult to wrap your head around what exactly this looks like. Your first step will be to reach out to your franchisor. They should have projections available for you.
You can use those numbers or combine them with your own local market research to determine your estimated revenue. The most important thing to note is that you want to keep your projections conservative. This gives you room to succeed and helps prevent frustration if you fail to meet a lofty target.
Expenses
Essentially, this category encompasses everything you will need to pay for. It includes known (fixed) costs, such as rent; semi-variable costs, such as salary and benefits; and variable costs, such as products and packaging. Make sure you account for everything here, even down to the smallest detail. Having an accurate picture of your coming expenses will really help and may ultimately increase profit.
Consider hiring an accountant to help you hash out the financial details. If you can find one with experience working with small businesses or franchise owners, even better! They will likely have a good grasp on small line item costs you may face.
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