When Do You Break Even In A Franchise?

franchise research financials

Getting to break-even.

That needs to be your 1st goal.

Got it?

 

When The Magic Happens

You’re not going to feel very good about things until…

You get to break-even in your start-up franchise business.

That’s because pouring money into your new business-without much coming in, is no fun.

But, when money does start to flow into your franchise business, your entire outlook on things will change.

And, when your revenue increases-consistently, things will start to feel magical.
 
Magical Alice in Wonderland Garden
 

Ask The Question

If you ask the right questions of current and former franchisees during your franchise research (and get answers) you’ll be able to make an intelligent fact-based yes or no decision.

Stick with me; I have the 40 best questions to ask franchisees.

Here’s question #29: 

How long did it take you to break even in your franchise?”

 

The Definition of Break Even

In franchising, break-even refers to the point at which the business generates enough operating revenue to cover monthly operating expenses and start paying back the initial investment.

You need to find out how fast it happens…on average.

One of the reasons I recommend calling 10-15 current franchisees (and 1-2 former franchisees) is to get some averages.

For example, maybe one or two franchisees broke even in only 6 months, 8 of them got to their break-even points in 12 months, and it took 18 months for the franchisee that you spent the day with. (I want you to visit at least one up and running franchise location as part of your research.)

 

Information Is Power

It’s a lot easier to find information about franchises that you’re interested in than it used to be.

But…and this is important, the massive amount of information that’s only a mouse-click away is not necessarily factual.

Consider the source….and what this source is trying to accomplish by putting it out there.

Tackling something as big as what you’re thinking of doing-becoming the owner of a franchise business, needs to be done a little at a time.
 
Elephant
 

How do you eat an elephant?

One bite at a time. 

(Courtesy of Jerry Moriarty)

 

 

*Images courtesy of wikipedia
keepitsurreal on Flickr
Stuart.Bassil on Flickr