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Looking for Location

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kitkky



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Join date : 2011-01-26

PostSubject: Looking for Location   Wed Jan 26, 2011 12:14 pm

I am at the beginning stage of franchising an education enrichment centre.
The searching of location is a huge challenge because we have a budget and also have to fulfill the vision our franchisor have.

Should we take a risk and rent an expensive unit (about $10k) in a mall type of location or should we play it safe and rent a reasonable unit ($5k) and spend on marketing?

i believe that overhead is important for a start up to be sustainable at first.

Please advice?

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amcpl1
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Join date : 2009-06-11
Location : Singapore

PostSubject: Re: Looking for Location   Sat Jan 29, 2011 9:30 pm

Hi Kitkky,

In business, a small formula will help you decide. Business is about profit/Loss and the equation is Profit/Loss = Income - Expenses. For a mall, you would expect high risk = high return/loss. Which means you either make it fast or your fail faster too. If you play safe, you may not get anywhere too...

To summarise, mall may be a better location to bring in good income. But if your income did not justify for the rental, you may fail fast. If you go for cheaper location, you may need to work very hard on marketing.

For franchise, you may want to ask franchisor for some real figures of other outlets as they would have the model tested. That will help you decide better. To be frank, franchisor is oblige to show you as you are paying them the fees.
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kitkky



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Join date : 2011-01-26

PostSubject: Re: Looking for Location   Tue Feb 01, 2011 10:05 am

Thank you very much for your reply.
The situation is such that it is a new franchise. There are no real figures of other outlets. This is the reason why I am not comfortable to take the risk and stretch my budget so far.

We have decided and told our franchisor that we decided to be firm with the budget we have. To have high overhead or over commit will be already a bad start.

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amcpl1
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Posts : 149
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Join date : 2009-06-11
Location : Singapore

PostSubject: Re: Looking for Location   Tue Feb 01, 2011 10:18 am

Wish you success in this venture.

Watch out for government grant to help you start-up.

Do PM me if you need assistance or you can reach me at msn wttl@hotmail.com
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