Difficult economic times bring many questions for retailers on how to start a franchise when others all around are closing down? Opening a store can be a dream come true for some people but they can be frightened off by economic circumstances or a lack of knowledge of how to go about starting a business.

The important thing to consider from the outset of course is what you are going to sell. Perhaps you produce something already that you want to sell or are planning to buy in the stock. Either way you need to establish whether there is a gap in the market for your product, and whether it is something the locals would want to buy.

Of course one of the major barriers to people opening a franchise or indeed with any new business venture is the initial cost. Banks can be quite fussy about who they lend money to, so a great business plan needs to be prepared in order to convince them to part with some money.

There are alternative ways how to start a franchise without taking the begging bowl to the local bank. For example:

• Redundancy money – Some people turn to their dream of opening their own franchise after being laid off by their previous employers. Redundancy money can be used to inject capital into the new business.

• Investment – Perhaps friends or family could be encouraged to invest in your new venture by offering them better rates of return on their money than those offered by most bank accounts. This may be especially attractive given the interest offered by banks in 2010 has been incredibly low and hardly worth the paper it is written on.

• Cutting personal expenses – Some money could be used towards opening your new store by saving on other things such as club memberships, buying a smaller car, quitting smoking or even checking the attic for stuff that never sees the light of day and could be sold.

There are many ways we can find of generating easy cash to help finance other things including the rent on a new franchise. No matter how small the expense, whether it is 20 cigarettes a week, these things all add up over time.

Strangely enough when you sit back and think about how to start a franchise, a recessionary period is a good time to do it. It is a time when many high street stores are empty and as a result landlords are keen to fill them with new tenants as quickly as possible. Don’t be afraid to negotiate a cheaper monthly rent with a landlord in these instances.

Budgeting is very important and should form part of your business plan when you set about starting your new business. Research must be done to ascertain how much you will need to pay for stock, fixtures and fittings and of course staff.

If you do your homework on how to start a franchise, the funding requirements will be a little easier. The initial cost and potential failure is what scares people the most, so securing the funding will provide a little added confidence to go ahead and start selling your product and making a profit.

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