Raising Funding the Primary Concern for Potential Franchisees
Leading franchise resource website TotalFranchise.co.uk has conducted research and found that raising funds for initial investment is still the primary concern for potential franchisees.
Romsey, United Kingdom, April 22, 2010 --(PR.com)-- Research undertaken by leading franchise opportunities resources website, www.totalfranchise.co.uk has found that the issue of being able to raise funds for the initial investment to start a franchise, is the biggest concern to prospective franchisees.
Users of the TotalFranchise Group of sites, that attracts over 40,000 unique visitors per month, were given a choice of five different factors that they could cite as their primary concern in starting a business at present. Over half of respondents (56%) advised that raising funding was the biggest issue in their minds.
The survey also found that, as the primary concern about starting a franchise, 21% of potential franchisees lacked confidence in the franchise model to work as expected, 4% had a fear of failure, 4% had concerns over cash flow whilst building a business and only 2% had concerns about their skills to run a business.
The recession, and the preceding ‘credit crunch’ is the major influencing factor in ‘raising funds’ being the highest, and though the British Franchise Association / Natwest 2008 survey suggested that franchisors had reacted to the issue of raising funds, by reducing average franchise start up costs from £64,900 in 2007, to £50,400 in 2008, it appears that despite well documented Government responses to get banks lending to aid small businesses, the impact of this is not being felt.
Nick Tubb, Managing Director of the TotalFranchise Group commented: “This survey presents interesting findings in that although the UK has now exited the recession, our prospective franchisee users still feel that obtaining funding is the biggest issue they face.
“Franchising presents a reduced-risk route into self-employment, and while banks continue to offer reassurance that funding is available, the perception seems to be that accessibility to funding remains the same issue that has held back growth in franchising at a time when lack of employment options, and the overall reduction in businesses trading over the past couple of years has presented a great opportunity for franchising, in certain sectors, to have flourished.
“In the current climate though, this concern may be based upon low expectations of financial availability however banks maintain that up to 70% of the franchise start-up costs can be obtained and that this is available now.” he adds.
TotalFranchise provides various resources on obtaining finance, from banks such as LloydsTSB, and we advise that prospective franchisees should explore as many funding options as possible with the major franchise banks and not assume that funding wont be available to them.
For more information about franchising, visit www.totalfranchise.co.uk.
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Users of the TotalFranchise Group of sites, that attracts over 40,000 unique visitors per month, were given a choice of five different factors that they could cite as their primary concern in starting a business at present. Over half of respondents (56%) advised that raising funding was the biggest issue in their minds.
The survey also found that, as the primary concern about starting a franchise, 21% of potential franchisees lacked confidence in the franchise model to work as expected, 4% had a fear of failure, 4% had concerns over cash flow whilst building a business and only 2% had concerns about their skills to run a business.
The recession, and the preceding ‘credit crunch’ is the major influencing factor in ‘raising funds’ being the highest, and though the British Franchise Association / Natwest 2008 survey suggested that franchisors had reacted to the issue of raising funds, by reducing average franchise start up costs from £64,900 in 2007, to £50,400 in 2008, it appears that despite well documented Government responses to get banks lending to aid small businesses, the impact of this is not being felt.
Nick Tubb, Managing Director of the TotalFranchise Group commented: “This survey presents interesting findings in that although the UK has now exited the recession, our prospective franchisee users still feel that obtaining funding is the biggest issue they face.
“Franchising presents a reduced-risk route into self-employment, and while banks continue to offer reassurance that funding is available, the perception seems to be that accessibility to funding remains the same issue that has held back growth in franchising at a time when lack of employment options, and the overall reduction in businesses trading over the past couple of years has presented a great opportunity for franchising, in certain sectors, to have flourished.
“In the current climate though, this concern may be based upon low expectations of financial availability however banks maintain that up to 70% of the franchise start-up costs can be obtained and that this is available now.” he adds.
TotalFranchise provides various resources on obtaining finance, from banks such as LloydsTSB, and we advise that prospective franchisees should explore as many funding options as possible with the major franchise banks and not assume that funding wont be available to them.
For more information about franchising, visit www.totalfranchise.co.uk.
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TotalFranchise
Laura Payne
01794 511790
http://www.totalfranchise.co.uk
Laura Payne
01794 511790
http://www.totalfranchise.co.uk
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