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Save on Your Franchise Startup

When starting your franchise, there are times when you should pay for convenience and efficiency, and times when you shouldn't.
February 25, 2009
URL: http://www.entrepreneur.com/article/200338

Most franchise owners will tell you that they could have easily saved quite a bit of money from the costs incurred opening their first units. This begs the question: If this is such a universal truth, then why didn't the franchise companies show them how to save this money as part of their training? The answer is that they probably did.

The biggest money waster in terms of startup costs, by far, is impatience on the part of the franchisee. Most new franchisees are thrilled and excited to get going, as they should be, and they can't wait until their new franchise opens for business. If there are two ways to do something, and the faster one costs more money, most new franchisees opt for speed. Those kinds of choices can really add up to a lot of money and in many cases the time gained doesn't really produce any long-term value to offset the increased costs.

The secret to reaching the best result in terms of startup costs is balance. If you picture the cost vs. speed quandary as a continuum, you don't want to be at either extreme. Trying so hard to save money that you never open the business isn't going to be any better for you than spending too much to open a little sooner than you otherwise would.

There are five common expense categories where most startup cost savings are found. Some of these are quite easy to take advantage of while others require some extra work or expertise. The old adage that "time is money" applies to virtually every category since you're usually trading some of your time to get the financial savings. The key areas to focus on include:

As a final thought on this topic, remember that it's easy to determine which areas will produce the most savings for you in whichever franchise you select. All you need to do is ask the existing franchisees. Again, this will take some of your time but it will be an investment that can pay you big dividends in savings on your startup costs if you're willing to learn from their experience.