Is franchising after redundancy a real option?

To face recession, your employer has decided to make you and other people redundant. You have probably chosen to get your redundancy payment and now have to think how to use that money the best way you can.

Consider continuing to have an active living

Being made redundant is not necessarily the end of your working life, unless you really don’t want to work anymore and have enough money to spend for the rest of your life. In most cases, redundancy comes unwanted and you have to think how you can efficiently use your lump money even before you get it. Therefore, you have to consider second business opportunities as an option in order to avoid financial troubles. Finding a new job after redundancy could prove really challenging, as a million people are supposed to enter the UK unemployment market this year. As a result, you may want to choose a home based opportunity and try to make as profitable as possible, so that you and your family can make a living from it.

Is franchising viable?

The answer to this question cannot be black or white since it is your personal choice whether to buy a franchise or not. It is however wise to make sure that you have enough funds as reserve when investing in any business. Your reserve has to cover at about six month’s expenditure or so in case your business takes longer to become profitable. If you make the decision to approach a bank for support you have to be able to repay any borrowing and interest from your own reserves until the business runs properly. It is often wiser to borrow from a bank when you begin and keep your own funds for reserve rather than going to the bank after several months of poor performance when your reserve is exhausted and you need additional capital. As you pay interest and have to make capital repayments on your loan your ability to service the commitment you are assuming is essential.

Every franchise has specific financial requirements, so the costs to start a franchise are not the same; they are different from a franchise company to another. In most cases, the payment of a franchise fee is required and also all build-out costs that your location needs, including furniture, equipment and fixtures, professional fees, stock and signage. Working capital is also needed until the business is finally going.

Redundancy to franchise – a success story

There are many examples of people who made a success story from their franchise businesses. Numerous cases are known of individuals or even couples who have been made redundant and afterwards have succeeded to buy a franchise and made it profitable. All of them have followed a few simple but very important steps, such as making a business plan, learning and researching the industry, collecting a group of advisers and setting achievable goals.

Following these steps thoroughly gives you the chance to transform a business opportunity into a great success and forget the inconveniences of losing your first job.