How to Franchise at a Low Cost and Make a Profit

If you are interested in pursuing entrepreneurship and searching for a startup opportunity that won’t break the bank, a low-cost franchise may be the best choice. Complete Weddings + Events can help you learn what makes a franchise at a low cost more affordable.

Kicking your 9-to-5 corporate gig to the curb and hanging up a shingle is not a pipe dream. If you want to own a franchise but don’t have a lot of money to invest, your dream of entrepreneurship is still attainable. Experts forecast that by the end of 2022 there will be 792,014 franchises in the United States covering a wide variety of industries, including healthcare, foodservice, residential services, and personal care. Franchises are forecast to generate $826.6 billion in 2022, the International Franchise Association reported.

What is a Low-Cost Franchise?

A low-cost franchise requires an initial investment of under $100,000. There are even a number of opportunities starting as low as $10,000, often started as side hustles. Even though a low-cost franchise has a minimal initial investment, it can still deliver high profit margins. The average annual income of a low-cost franchise owner is $77,851, according to a report in Franchise Business Review. At least 13% of low-cost franchises generate incomes over $100,000.

Career coaching, vacation planning, eldercare consulting, and home services are just a few of the industries with low-cost franchise potential. As the nation’s largest event services provider, Complete Weddings + Events gives entrepreneurs the tools they need to get a business off the ground with a modest investment of between $56,820 to $71,070 while taking advantage of our limited-time Incentive Program. Complete Weddings + Events is a one-stop-shop for customers and has a network of resources to take care of the entire package, including video, photo, DJ, photo booth, and more. In 2022, Complete Weddings + Events was ranked on Entrepreneur’s Franchise 500 list for the sixth time.

Benefits of a Low-Cost Franchise

Here are six benefits of low-cost franchising with a business such as Complete Weddings + Events.

1. 1. Home Office Advantage. One of the hallmarks of low-cost franchises is their operating model. Low-cost franchises ditch the brick-and-mortar location and operate out of a home office. In fact, all you need to open many low-cost franchises is a high-speed internet connection. Some low-cost franchise owners conduct back-office administrative tasks from a home office and use a mobile van to serve customers.
   2. Flexibility. Achieving work-life balance is attainable with a low-cost franchise. Not having a brick-and-mortar shop allows low-cost franchisees to set their own hours and create their own schedule. By combining wedding planning and event planning, a Complete Weddings + Events franchise generates year-round sales.
   3. Scalable. Investing less upfront makes it easier to scale your business as you start to generate a profit. Typically, all it takes to expand a low-cost franchise is to add additional territories. The territories for Complete Weddings + Events are broken up by counties, and our franchise owners tend to grow one market at a time.
   4. Faster Path to Profitability. Opening a low-cost franchise offers a high profit potential. Franchise owners invest less upfront, which enables them to turn a profit quickly.
   5. Recession-Resistant. With modest overhead, low-cost franchises are designed to weather tough economic times. Picking a low-cost franchise that offers an essential service will increase the likelihood your business will flourish. Complete Weddings + Events has helped plan more than 300,000 events since we opened our doors in 1974.
   6. High Level of Support. One of the advantages of owning a franchise is the support and training you receive to help your business succeed. All Complete Weddings + Events franchise owners attend two weeks of training at the company’s corporate headquarters, as well as several days of training on site as they get their business up and running. They can also take advantage of marketing support and learn best practices from their peers. “Their ongoing operational support provides us access to cutting-edge trends in the industry, which allows us to quickly pivot when the market changes,” said Sarah Erb, a franchise owner in Sioux Falls, South Dakota.

Determine Your Business Goals

To determine if a low-cost franchise is the right choice for you, it’s important to start your search by exploring your business goals. A low-cost franchise is likely not the right choice for a person who does not want to be involved in the day-to-day operations of the business. However, if you prefer to spearhead operations, a low-cost franchise allows you to get the job done right.

Franchise owners can tap their peers to learn more about the business. Talking to fellow owners will help you establish a realistic business plan and know what to expect in terms of profits and daily operations. Having a network of fellow business owners can help you avoid common pitfalls new business owners face and problem-solve challenges. Relying on your peers will help put you on the fast track to profitability.

Financing a Low-Cost Franchise

Even if you are searching for a franchise with low startup costs, it’s likely you will need some financial assistance to get started. Franchisees have better luck securing a loan because they are opening a business with a proven track record and brand recognition. Banks can see evidence of the brand’s success. Fortunately, there are many ways to finance a low-cost franchise.

SBA Loans. Many fledgling entrepreneurs rely on SBA loans to help cover startup costs. SBA loans are guaranteed by the U.S. Small Business Administration and lent by banks. They often have low interest rates and can be combined with other forms of financing.

Rely on Retirement Funds. Entrepreneurs can put their 401k to work now to open a business. Rollovers for Business Start-ups, or ROBS, allow you to draw money from your retirement to start your business without paying a penalty. Following this path allows you to diversify your portfolio and limit exposure to the ups and downs of the stock market.

Leasing. Many franchisors have done the heavy lifting and have resources for potential entrepreneurs. A brand requiring you to have a mobile van likely has a leasing program to help you get started. They can also recommend lenders and guide you on your path to business ownership.

Personal Investor. If taking a loan on your personal portfolio seems risky, you can also find a personal investor to help out. Many entrepreneurs rely on family or friends to start their business. With this method, your investors reap the benefits of your hard work.