Are you looking to invest in a franchise, but you’re on a tight budget? Are you willing to spend no more than $100,000 on your initial investment?
Browse our listings below to see some of the top franchises for sale at Under $100,000.
You can also obtain an SBA loan for a franchise and invest as little as 30% of the total investment amount.
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00:00 Introduction
00:20 SBA Loans
01:00 Service Industries
01:30 Converting an existing business
01:48 First year, work hard, use your savings
02:23 ROI
03:15 Revenues on sale a business
03:53 Sales vs initial investment
04:37 Conclusion
05:17 Subscribe!
#FranchiseUnder100K #InvestInFranchise #VisaFranchise
Today, I'm gonna go through a few industries that are well-suited for those looking to invest in a franchise under $100,000, as well as some industries that you might wanna stay clear of and think about only if you have more capital like 200,000 plus to invest in the business.
One good thing, you don't have to have that $100,000 in cash. If you're a U.S. citizen, green card holder, you might be eligible depending on the business for an SBA 7(a) loan. So that's from the small business administration where they're backing the majority of that loan, and you get the loan through a commercial bank. Right now, rates are at 5%. So, if you're investing in a franchise that's $100,000, you could potentially put up $30,000 cash, get a loan for $70,000 at a 5% interest rate to help support the initial start up of your business, as well as sustain the growth, and so you start to draw dividends from your business. So on our portal vettedbiz.com, we have over 600 opportunities available starting less than $100,000.
Now, most of these are gonna be dominated by service industry. When I talk about service, I mean the following industries. Home care, property management, accounting, commercial cleaning, cell phone repair, different retail service businesses, education that would include tutoring as well as STEM education businesses. You can also look to convert an existing business that you own, say a small cell phone repair business into a franchise business to leverage the brand technology system of that franchisor for a franchise investment under $100,000.
If you in invest in under $100,000 into a franchise, get ready to work hard. Generally, it's gonna take three to 12 months just to break even. So you're gonna have to have additional capital or maybe you're married to a sugar mama, sugar daddy that makes a lot of money or has a lot of capital that you don't have to worry as much for those first three to 12 months before you break even and start taking a salary or taking distributions from the company. So it's key first year, you're basically living off your savings, or your spouse has a great job, or you have assets that to live off of.
Second year, generally, you're gonna have a tight budget, kinda have to watch your expenses. And then going into the third year is where generally growth continues to accelerate. You can take more and more profits out of a business that you invested up to 100K. Again, though, profits generally don't really come until well into the second and third year. So, say, you invested $80,000 into a property management business, it could be months until you take some cash out of the business. However, you're at year three, there are some systems that average franchisees do sales of $500,000 at a profit margin of 30%. So, of that business that you invested $80,000, you taking out $150,000 in cash in the form of salary and dividends, and you have a pretty stable business, and you've created an asset now.
As a property management business, an accounting business, insurance franchise that you do sales of $500,000, right now you could probably sell for one times the revenue. So business that you initially invested $80,000 or $100,000, you could sell at a later date for nearly $500,000, representing a pretty nice return on your investment. Beware of franchisees that you invest, say $100,000 that have sales of $100,000. It's better to so buy that business on the open market than start it off from zero. A big, important thing to look at is the multiple of sales over the initial investment amount. For franchisees under $100,000, I like to see sales represent 3, so 6 times the initial investments to start that business.
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