Finding sufficient funding is crucial for the success of a business since inadequate capital is the primary cause of business failure. Therefore, the question arises: where can one locate the necessary funds to finance a business?
Were you aware that choosing a franchise as your business venture increases your chances of obtaining funding several times over? This is due to the fact that a franchise is a proven concept, and lenders recognize that you are more likely to succeed with a franchise than when operating independently. Financial qualifications are required of investors before they can purchase a franchise, which is one aspect that contributes to the success of franchising. Why is this necessary? The statistics show that franchises are roughly seven times more likely to thrive than independent businesses. This is primarily due to the fact that many people start a business without adequate funding, leaving them with insufficient capital to sustain their operations. Additionally, many new businesses lack a solid business plan or growth strategy, including a plan for presale memberships and on going marketing approaches.
At Blitz45 Fitness, our franchise model includes a comprehensive business plan, growth strategies, and a presale plan even before you launch your franchise. We prioritize financial qualification as the initial step to ensure that you possess adequate funds to establish and operate your franchise. This is determined by assessing your net worth and a certain percentage of liquidity, implying that you have accumulated wealth and made sound financial decisions with enough resilience to sustain your business. This greatly enhances your likelihood of success, which is why we place such emphasis on this step.
So, If you’re considering launching an independent gym instead of a fitness franchise, I would suggest that if you haven’t yet reached that level of financial qualification, you should reconsider until you accumulate enough wealth to possess the necessary staying power.
“Exploring 3 Franchise Funding Strategies for Your Fitness Business”
1. Funding Yourself
If you’ve saved enough money to invest in a new business venture, relying solely on your own funds may not be the most prudent way to finance your enterprise. After all, cash is king, and utilizing someone else’s capital to launch your business is a more astute approach. You wouldn’t want to deplete all your bank reserves to fund your venture. However, if your business does exceedingly well and you have substantial cash reserves, then using your own funds for financing may be a viable option. Given that interest rates are relatively low, it makes sense to borrow money at these favorable rates for investment purposes. Ultimately, investing in a venture that yields a higher return than the interest rate on your loan is a wise financial move.
If you do not meet the financial thresholds required for franchise funding, another way to finance your fitness business would be through an investor. As an industry expert, you may have acquaintances, family members, friends, or even personal training clients who could be interested in investing in your business venture. They are taking a certain level of risk in investing in you, and it’s reasonable for them to expect a return on investment. You can structure this funding in two ways: they can act as a lender, and you will repay them with interest over a specific period of time. Alternatively, they may seek a share of your business, but you must exercise caution in this regard, as equity in a business is often its most valuable asset. Giving away equity in exchange for the opportunity to launch your business may not be the best course of action, and you should carefully consider your options.
In addition to financing your franchise, you also need to fund your fitness equipment. One option for financing your equipment is through an equipment loan. Many companies offer equipment loans for fitness equipment, typically with a three-year lease and a $1 buyout option. This type of financing provides a tax strategy that makes it easy to depreciate the equipment, and at the end of the lease term, you will own the equipment. It is important to note that equipment financing falls under the umbrella of personal funding and is a crucial aspect of starting a successful fitness business.
2. Small Business Administration Loan (SBA)
In order to obtain an SBA loan for your fitness business, you will need to meet the financial qualification requirements, which is something that you would also need to do when working with Blitz45 Fitness. Choosing a franchise can be beneficial because the SBA recognizes the success rates of proven concepts like franchising. Fortunately, Blitz45 Fitness is an SBA approved franchise. However, it is important to keep in mind that even with an SBA loan, you will still need to have some cash flow available, typically around 20% of the loan amount. This is because the SBA wants to see that you have a personal investment in the business.
A regular personal loan may be an option for franchise funding, but it’s not as advantageous as getting an SBA loan. With a personal loan, you’re typically required to put up collateral against the loan, which can be risky. However, if you do not need over 150K then a personal loan is worth discussing with a lender. On the other hand if it is more capital, an SBA loan provides more protection and is a popular and excellent option for franchise funding.
3. Rollovers(ROBS) and 401K’s
Here’s an example: If you have significant savings in your 401k and are looking for ways to fund a franchise without penalty, consider transferring those funds into a C Corporation that you create. By doing so, you can use the corporation to invest in the franchise opportunity. We work with various companies that specialize in franchise funding, who can help you with this process. Typically, the stock market yields around 10% over the long term. However, investing in a franchise could potentially provide a much better return on investment.
In Conclusion, Blitz45 Fitness franchise offers a lucrative opportunity for individuals looking to invest in the fitness industry. The franchise’s proven business model, low investment costs, and SBA approval make it an attractive option for potential franchisees. Additionally, with various funding options available, including personal funding, SBA loans, and 401k rollovers, investors have multiple ways to finance their franchise. Blitz45 Fitness’s high success rate and experienced support team also provide reassurance to franchisees, increasing the likelihood of achieving financial success. Ultimately, investing in Blitz45 Fitness provides a chance to enter a rapidly growing industry and build a profitable business.
Derek L. Riley
President/Chief Growth Officer
For information about the Blitz45 franchise opportunity, please visit