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Andrew Nell
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business808080, post: 203425 wrote:
Ive got a business idea that I think could prove very profitable, and once established, would really suit the franchise business model. What I plan on doing is launching the business and fine tuning the strategic operations in the first year, and then selling franchises once i have the model worked out. I will need about 200-300k in the first year to test the business , making sure it is in fact a viable business, but I wonder if I should try and raise three times as much and launch three outlets?

Pros
Its gets established quicker and I swoop in to quickly take market share avoiding other start ups that could potentially try my model
I could employ some executives to help with the strategic planning
More outlets means I can run more tests and experiments to fine tune the model

Some cons are:
I lose more equity

Any tips?

Thanks!

I agree with the supposition that you will lose the majority of the business when seeking this kind of funding. Especially if you don’t hold some well defended intellectual property that you bring to the table.

Debt is always cheaper than equity in the long run…have you considered releasing equity from your home or a business via a loan to minimise the investor dollars required?