Franchise Opportunities for Veterans in Light of Veteran's Day
The economic recovery is inching along but franchising continues to grow at a quicker pace. In previous economic slumps, franchising has rebounded faster than other industries. After the recession of 2001, franchise companies added 1.2 million jobs over a five-year period, and grew at an average of 9 percent a year, according to the International Franchise Association. And 2010 looks to be just as promising. This is great news for veterans seeking a business opportunity, especially because investing in a franchise is a smart way to access financing and capital after returning home from service.
More than 14 percent of businesses in America are veteran-owned, according to the U.S. Small Business Administration (SBA). Veterans know how to be effective leaders, but they also know how to follow a plan and thrive in a proven system.
Yet before you jump into an investment, it's important to think about financing and find a franchise that is a good fit for your personal and professional goals. Luckily, MatchPoint consultants have matched thousands of individuals with their best suited franchise. MatchPoint's proprietary profiling systems – the Heat Map Profiling System and the ShapesProfile Test – help individuals narrow the playing field to only those franchise systems that offer the best opportunity for success. The "Heat Map" helps match clients with specific industries and brands, while the "Shapes" report helps to reveal a client's natural strengths in areas such as leadership, customer service, sales and operations and how they relate to success in franchising.
Keep in mind when generating funds for your franchise, you'll need to cover the franchise fee as well as start-up costs. These costs range depending on the type of franchise and scale of the business. The home-based sector of franchising is appealing due to low initial investment costs and flexible hours. In purchasing a home-based franchise, you will cut two of the biggest expenses faced by many start-up companies—rent and staff. You will also eliminate commute time and manage your own hours.
A great resource for honorably discharged veterans is VetFran, a program sponsored by the International Franchise Association. It provides U.S. military veterans with special incentives like discounts towards the purchase of a franchise, and today more than 1,500 veterans now own a franchise through VetFran.
In addition to special discounts offered to military vets, there are opportunities for veterans to finance a new business. Not only are more franchise companies providing in-house financing for startup costs due to tightening lending practices, but the SBA offers guaranteed loans and these are a good way for Veterans to fund a franchise unit. The SBA has a resource called The Franchise Registry, which is a preapproved listing of franchises—allowing for a more streamlined loan process. Also, the SBA announced the Patriot Express Pilot Loan Initiative in 2007 for veterans wanting to establish or expand a small business—wives and widows of veterans are also eligible. Your local SBA district office will have a listing of Patriot Express lenders in your area.
Many people in today's environment are also using their 401(k) or retirement funds to get businesses off the ground, because there are fewer penalties and tax distribution costs. Remember though that every business is different. Before investing in a franchise, be sure to research all viable options.