The company's National Director of Sales talks money, mistakes and helpful hints for prospective franchise owners.
Entrepreneurs often turn to franchising when they don’t want to go it alone. It’s a way for them to start their own business with the help of a franchise to guide them through the process. What want-to-be franchisees don’t always know, however, is what’s needed to finance their business investment. That’s where Benetrends comes in.
Benetrends has been around for nearly 40 years, originally helping small mom and pop business owners find the capital needed to open and stay open. Their growth, however, really came about 15 years ago when they decided to specialize in helping those interested in the franchise sector.
“We have about 14,000 active clients and have helped thousands more secure funding for several decades,” Benetrends National Director of Sales Tim Livingstone said.
According to Livingstone, the company pioneered the effort to help fund franchisees and fuel their growth. They do so through a number of loan options, including loans for startups, SBA loans, equipment financing and more. Benetrends looks for the lenders and works with their customers through the process of getting a loan closed. A big part of their consultations is providing knowledge to these potential owners.
“Our motto is ‘you don’t know what you don’t know,’” Livingston said. “You might be thinking you can only afford so much, but you could actually qualify for a lot more money.”
That opens the door for franchisees to potentially purchase more than one location and increase their net profit down the road. Benetrends’ process doesn’t end once the franchise is bought, however.
“We walk customers through the entire process because a lot of aspiring business owners haven’t thought through things like insurance options or payroll, so we offer a one-stop-shop,” Livingstone said.
In the several years that the company has been helping franchisees start up successful franchises, Benetrends has seen some consistent mistakes being made when franchisees open their own store. According to Livingstone, many new franchisees are only thinking about getting their franchise purchased and up and running. They aren’t thinking about an exit strategy or their future plans for expansion. Many want to keep the franchise as a family business and plan for expansion. Others want to make enough money to sell the location and retire. Having a plan on the front end, he says, will make financing the entire business model more effective.
“We’ve seen it happen where they open and it’s (the franchise) doing well, but all the money is tied up in that one location,” Livingstone said. “Now they want to open another location and they can’t.”
The business of helping franchisees get properly financed is getting tougher. Livingstone says borrowing money is becoming more expensive and loaners are being more selective.
“The interest rates are going up two more times this year alone,” Livingstone said. “That will make borrowing money a bit more pricey and risky.”
While borrowing money may be trickier in the near future, Livingstone points to industries he thinks will stay lucrative for the long haul.
“The health and wellness industry is hugely growing. as is B-to-B businesses or anything service related,” Livingstone said.
Livingstone’s best advice for prospective franchisees? Do the research and be patient.