Thread: Own a business?... Looking for advice.

First let me say sorry if this is in the wrong spot. Also sorry if I'm not as clear/concise as you want but I'm really not sure what exactly to ask, but here it goes.

I have come to the conclusion that I do not want to work my way up a corporate ladder, nor do I wish to work for someone for the rest of my life. What I would like is to own a franchise. Most likely it will be a co-ownership between myself and a fairly close friend whom I trust 100%.

At current my education is only high school with a little bit of college education in audio engineering. I took the college course more for myself instead of with a career in mind. However with the knowledge I gained I landed myself an intern position in an A/V company, after about a year of working for free they started to pay me for the work I did for them. Unfortunately I do not have a drivers license or a car and wasn't as much of an asset to them as I could have been and they basicaly stopped answering my calls. So my first steps towards getting what I want is a license and a car. When I get those I will resume hunting for a position as an A/V grunt. Or perhaps I will find something else more worth my while.

Now I'm not set on a particular franchise but I do have my eye on 1 in particular and I've looked at what they ask of their franchisees(the small bit of information they have given). Unfortunately they do not specify what kind of education/work history they look for, if any. But I live in Canada and if people that can barely speak english own a franchise then I should be fine. One critical piece of information most companies put on their website for those interested in opening a franchise is the cost(s). After looking through about 10 seperate websites they all fall under roughly the same price tag: 20K-50K as the franchise fee and another 150K+ for various other items depending what business you are purchasing. So basicaly they are asking for people to have about 200K in cash or they won't consider you. There is also a further 500K that is required, however this may be a loan from a bank. Now Im not sure what to make of these numbers, is it really only about 700K+/- to own a franchise?

For now my curiosity falls on the financial side. What do I need to know about money? I'm really good at not spending it but that alone won't work. What types of investments should I look for? If you could go back in time and give your younger self advice what it be?

I'm sure I'll have more questions but for now its getting late and I want to screw around for the rest of the night. I'll post more questions and anything else that comes into mind as time moves on. But any advice you could give would be much appreciated.

Also, just for the hell of it I'm linking the franchise info to the business that I would like own. Again this is just something that appeals to me now and maybe 5 yrs from now I'll change my mind, but it works just to get the ideas out.

Tim Hortons - Franchising Program

Im sorry if this is advertising, I don't mean to. I just want people's opinion on the numbers and what all the information means (it is fairly straight forward though).

Edit: I guess what I'm really looking for is financial advise...

I will check out the link, but your numbers are likely pretty close. I had a friend looking into things like McDonald's and Starbucks, and those larger franchises want you to have about a million liquid. They typically want you to have the cash for the startup fees, and then you can have the loan for working capital, so rent, insurance, electric, supplies, salaries, advertising, etc.

As for finances I would advise you to hire a good accountant. Not only will they be able to watch your books to make sure nothing funny happens, but also hopefully help you out a ton when tax time comes.


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In looking at their site it looks like they want you to have 200k liquid, and up to 300k financed, for a total of about 500k. That may vary based on real estate size and location.


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Thanks for the reply.

I was checking out McDonalds and they were roughly around the same number as Tim Hortons, surprisingly Burger King wants roughly 1M for start up. I'm pretty surprised that there aren't a lot more people co-owning businesses after looking through a bunch of franchise info. Me and a friend were planing on going into a bank or 2, or more, to try and get an idea as to what they want you to have in order to loan some cash. There's also a franchise show coming up so hopefuly we'll get some info there.

Also in reading the Tim Horton site it sounds like they have lenders available to provide the financing. While not guaranteed I would bet that those institutions will be more willing to loan to you because they believe in the Horton system already.


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Originally Posted by VinDeagle

Thanks for the reply.

I was checking out McDonalds and they were roughly around the same number as Tim Hortons, surprisingly Burger King wants roughly 1M for start up. I'm pretty surprised that there aren't a lot more people co-owning businesses after looking through a bunch of franchise info. Me and a friend were planing on going into a bank or 2, or more, to try and get an idea as to what they want you to have in order to loan some cash. There's also a franchise show coming up so hopefuly we'll get some info there.

I would attribute this to two things. 1. The vast majority of people want to be employees, not business owners. 2. The vast majority of people don't have 200k liquid that they can buy in with, and most would prefer to buy new houses, cars, and clothes over saving to get there.


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Where to start....I´ll start with your question...If you could go back in time and give your younger self advice, what would it be? When I graduated from college, I came back to Honduras. My dad told me to work with him...and if I didn´t want to do that, he would let me choose a company I´d like to work in and I basically had the job because my dad knows people here. So, I decided not to work on any of the companies my dad recommended, exactly because I didn´t want to climb the corporate ladder and work for someone else, other than myself (or my wife when I get married lol),for the rest of my life. So I decided to go into investment banking. I worked there, as a corporate risk analyst (analyzed corporate loans, forecasting, etc). I worked there for a year, and then I decided I already knew enough about finance to go independent and start a financial consulting firm...after all I knew all the people that owned their own companies and work a lot with loans for new projects and working capital etc......big mistake...One thing is to know about numbers...know how to do financial models etc...its another thing to manage an office...personnel...go out and actually LOOK for new clients...etc etc etc etc etc...so...I did not have a job with the bank anymore...and after a year...I was going nowhere with my consulting firm because of my lack of experience...1 year of work doesn´t make you Warren Buffett..and immaturely and arrogantly I thought I could do it.

So after that, I had some money to invest in a couple of real estate projects that my friends had in their portfolio, made a little bit more money with that...took out a small loan (from my dad, not the bank), decided to go in the bar business...we did well with that and now I´ve got more capital to invest on other things. Invested in a restaurant, I´m currently going to go into the plastics industry which a friend´s family has already been in for around 20 years (produce bottles and bottle caps for companies like Coca-Cola down here). So what I do now is invest in these companies....which has a solid business plan...solid experience in the industry...and maybe invest in 15-20% of the shares...so I have a little bit here...a little bit there...don´t put all my eggs in one basket and I have seen the benefit of this and will see it in the long run.

With franchises...first of all....you have to do a market study...analyze what competition you have in your town, analyze your target market, purchasing power, comparative price analyses, sales forecasting, investment budgeting and a couple of other things I might be missing...all this in order to see if 50k or 700k will be a good investment in the long run...what´s your payback period looking like? Are you able to get credit from the banks...if so, at what interest rate and loan period....etc etc. What´s you ROI...if you´re considering a couple of projects...compare the financial highlights between these two...what project pays me the fastest...what project is more feasible...which project generates a larger NPV and Internal Rate of Return.....all these things you have to know before putting your money down on a business venture.