Even though fall has just begun, it is not too early to start planning for 2023. This year the US inflation rate hit a 40-year high. Naturally, looking ahead to next year, continued inflation is something many people are worried about.
What can you do about inflation? You don’t want idle funds sitting in your bank account as the value of the dollar goes down. You want your money to work for you.
Something you can do is put a plan forward so that your assets are making money for you. Investing in a franchise is one of the best inflation-hedging moves you can make.
Now is the time to start the franchising process and set your 2023 plan in motion.
INFLATION EXPLANATION
Inflation is the rate at which the value of the dollar decreases while the prices of goods and services increase. The U.S. has experienced a sustained period of high inflation since emerging from the COVID pandemic.
Inflation can be caused by:
- Increased cost of raw materials.
- High demand/low supply.
- Labor shortages.
- Rising wages.
- An increase in the money supply.
The country’s current state of inflation has been linked to supply chain disruptions, labor market shortages, and pent-up demand (especially for services) due to the pandemic.
Experts generally agree that we have passed peak inflation and the worst is behind us, but inflation isn’t going away anytime soon. Americans are likely to experience higher than normal prices into mid-2023 or longer.
HEDGE AGAINST INFLATION WITH FRANCHISE INVESTMENT
During periods of high inflation, your best bet is to diversify and invest in long-term income-producing assets for low-risk, long-term returns. Investing in a franchise is an ideal way to achieve this on account of franchises’ potential for high-yield returns, predictable investment timetable, and their resistance to both inflation and recession.
When compared to other income-producing assets like stocks and real estate, investing in a small business showed the highest annual compounded return. But a franchise isn’t just any small business. A franchise already has a solid company concept, a clear business plan, and a proven track record making – it a potentially safer, lower-risk investment.
Franchises are more likely than other businesses to withstand and be successful during difficult economic times because of the franchise business model and support system.
THE FRANCHISE PROCESS
Fall is the ideal time to start the franchise process in preparation for next year. After a consultation to learn what business characteristics are important to you, you’ll begin researching the franchise you’re interested in.
Franchise research takes about two months, more or less. You want to do a thorough investigation of the franchise you are considering and learn everything you need to know, including:
- The financial breakdown.
- A day in the life of a franchise owner.
- Lead generation strategies.
- Marketing strategies.
- Talking to other franchisees.
- Validating earnings.
- Meeting the team.
Once you’ve made your decision, it’s time to start preparing to open your business. A service-based franchise is typically a lower investment and has a quicker time to open. Service-based businesses operating out of an office or home-office take about three to six months to open.
These types of business typically include a four to six-week training period to set you up with everything you need for the administrative side of the business (website, phone number, business account, incorporation, etc.) and then about one week of in-person training.
Opening a brick-and-mortar retail location involves a few more steps, such as finding a location, going through the real-estate process, and a buildout. This process takes an average of 12 months, but some can take longer.
Retail business training is more hands-on and comes towards the end of the opening process once you have your location, key personnel, managers, and staff.
Franchises don’t open tomorrow. They are an opportunity to plan for the future, diversify, and create income producing assets. If you start the research process now and make a decision by November, you could have a service-based franchise open by early to mid-2023 or a retail-based franchise open by fall/winter 2023.
There are thousands of options for franchise ownership in over 300 different industries, from fitness and education to health and home services. Each industry offers unique opportunities, and they are all great long-term investments to get you through the anticipated inflation of 2023 – and beyond.
If you’re ready to make a plan for 2023, reach out to get the franchise process started.
