Having decided to open a business, many are faced with the problem of the financial deficit. If your business plan is flawless and thought out to the smallest detail, you know exactly what amount of lack of funds in question.
In the case of buying a franchise, you can estimate with greater accuracy not only the required volume of investments, but also the estimated amount of costs at the initial stage. You can realize your idea and become a partner not only through your own savings. There are several more methods for finding the necessary investment.
Grant is a great opportunity to start or expand your business through a grant. Funds are issued to enterprises, organizations and individuals for the implementation of activities and imply a mandatory report on their intended use.
It is quite difficult to get a grant, but it is realistic if you take it seriously.
Who gives grants?
- The state (usually in the person of relevant ministries).
- Private funds (investment and non-profit).
- International funds and organizations.
Information about contests is mainly placed on the respective websites of organizations, where you can also find all the information about requirements, terms, documents and other conditions of participation.
Who and what grants give?
In theory, support from foundations or the state can be obtained for any business project. The state usually allocates money for the development of some priority areas (for example, education, media or culture). Thus, your project should be presented in such a way that the official sees that it corresponds to one of the fields of activity.
In world practice, there are many examples of grants issued for the development of franchised enterprises. The main thing is to correctly justify the functionality of the project, its recoupment and expediency. And of course, it is worth making an effort to find the appropriate donor.
In addition, the company must meet a number of requirements. Naturally, they differ in each individual competition, but there is also something in common. Young firms and entrepreneurs are often given priority, paying attention to creative projects or those that will positively influence the development of the market in a country or region. Government organizations give preference to those who contribute to job creation.
A very important criterion is a good business plan.
Where to begin?
- Form an application and the necessary package of documents (usually a package of statutory documents of the company, various calculations - it all depends on the requirements of each specific grantor), prepare a business plan and a business case for your need for a grant (most materials can be provided by your future franchisor). Apply for participation in the competition.
- Search for organizations that give grants in the field of media space (media), the Internet and urban online projects. Variations of a broader interpretation will also be suitable (for example, changing the life of a city for the better). Examine all the features and conditions of participation in the competition. Monitor the statistics of the grants already issued and study the work of these enterprises.
- Present your project. The grant is issued to the winner as a result of competitive selection. Then a contract is concluded with the recipient of funds.
How to avoid mistakes?
Very often, problems with obtaining a grant arise because of insufficient preparation for participation in the competition. To avoid common mistakes, one should pay attention to the following factors:
- it is necessary to choose contests and funds as close as possible to the subject of your project, preferably narrowly focused;
- very carefully work out your business plan, check all cost items, be able to justify all financial investments and try to take into account risks and ways to minimize them;
- to be prepared for the fact that, as a rule, money is allocated only for the most urgent investments, so the application will have much more chances, which does not include everyday expenses such as office supplies or a cooler.
In finding the right grant you should be patient, and to prepare for the project you need to exert maximum effort. But the gain from winning the competition will be significant - your business can receive substantial material support.
CitySites is always ready to help its potential partners in the preparation of a business plan and an effective development strategy.
Search for an investor or partner
The key point in finding the ideal investor is achieving a balance with him. You can take the partnership path: deposit capital or fixed assets, develop a business together, and agree on a proportional division of profits.
The second way is to completely build your enterprise with the money of the investor (they are sometimes called “business angels”). Here you can wait for “pitfalls”: your child will almost completely depend on the desire (or unwillingness) of a person to invest money or profit distribution will not stand you, etc.
In any case, finding a partner for a business is a painstaking and lengthy business. You need to look for options in advance and establish connections, clearly understand what kind of person you will be comfortable working together.
CitySites can greatly facilitate the process of finding investors. Our database of potential partners contains quite a lot of people willing to invest money in the purchase of a franchise, but who do not have much desire to spend their strength on building the work of a city site. Therefore, you can always contact us if you are looking for like-minded people to implement the idea.
Credit or loan
This is probably the most unpopular way, since the payback period of the project increases (the costs will be more by the amount of interest on the loan), and the unstable socio-economic situation may affect the borrower's solvency. Naturally, the loan must take as little as possible amount. And carefully examine all credit conditions.
Taking a loan for starting a business is a worldwide practice. In the post-Soviet countries, it remains unpopular due to high interest rates, but now there is a tendency to create more comfortable conditions for entrepreneurs.
It is worth noting that many banks with loyalty relate to lending to beginner franchisees - affected by the success statistics of franchised businesses and the famous name of the franchisor.
But, choosing the path of credit, be prepared for any unforeseen circumstances: you should not save at the very beginning - this increases the chances of a financial collapse of the enterprise. It is better to immediately calculate with your franchise manager all possible risks associated with the opening of the city portal, and lay them in the amount of borrowed investments. CitySites Affiliate recommends using this measure as a last resort. But if you choose this option, our managers make every effort to ensure that the company pays off as quickly as possible and brings a stable profit: they individually calculate the business plan for a partner to estimate the investment volume as accurately as possible.
Whatever method of fundraising you use, it is important to remember that CitySites always helps its potential and existing partners in any matter. The partner department is interested in the commercial success of all launched franchises, so ask as many questions as possible and ask for all the calculations that you may need.