Choosing Your Business Investments Wisely

Man at laptop choosing wise business investments

Just like we must determine which relationships are worth putting in the time and effort, we must think carefully about which businesses are worthy of our investment. It is easy to get caught up in the excitement of entrepreneurship. And I don’t blame the folks who want to jump right in — I can tell you from experience that being your own boss is great. However, it does come with its own set of challenges, which is why choosing the right business from the beginning is crucial to achieving long term success (and fulfillment).

Let’s Talk Sustainability: The Business Kind

Environmental sustainability seems to be getting a lot of attention nowadays, but let’s not forget about the importance of business sustainability. Aside from its large-scale benefits economically, identifying a business that will still be thriving decades from is every entrepreneur’s best friend.

It’s easy to fall into the trap of those attention-grabbing Top 25 Franchise Lists or The 10 Hottest Businesses To Own In 2023. Those titles do have a nice ring to them, but will they still be winning popularity contests in a few years? Or will they simply be a trend that has run its course?

I always tell my clients to do their best to overcome that FOMO mentality and instead to let their logic lead the way. Before committing to a business, you’ll want to ask yourself the following questions:

  • Will it provide the type of lifestyle I want to live?
  • Am I comfortable with the required financial investment?
  • Is it a proven concept with a trusted reputation?
  • Will I receive the support I need to succeed?
  • Am I going to be happy doing the required daily tasks?

There is no entrepreneurial endeavor that is completely without risks. But if you can answer “yes” to all of these questions, you can confidently move forward with your business investment knowing it’s the right fit for you and that the benefits outweigh the costs.

Don’t Be Fooled By Shiny Exteriors

Branding is a powerful tool for any business. It creates brand awareness while providing an opportunity to create loyalty and trust among consumers. That being said, don’t judge a book (or in this case, a business) by its cover. Being a potential customer looking to make a one-time purchase is an entirely different circumstance than being a potential business investor or franchisee. As much as you may love a company’s tagline or laugh out loud at their commercials, due diligence is of the utmost importance!

The holy grail of franchises is the FDD (Franchise Disclosure Document). As lengthy and overwhelming as it may be, you’ll want to read through it carefully. However many cups of coffee it takes — make it happen!

In terms of finances, you’ll want to focus on Item 7 and Item 19, which discuss the Initial Investment and the Earnings Claim of the franchise you are considering. If you believe you can write a business plan that marries those two components, you’re in a good spot.

Last, but definitely not least, you’ll want to take a gander at the appendixes to find a list of current franchisees and their contact information. The best insight you could possibly receive will come from these individuals. After all, they are living your potential future.

You’ll want to hear the compliments and complaints they have about how the franchise is operated. Having a clear idea of what you’re getting into before you officially invest is a huge advantage. Whether it solidifies that you are making the right decision or helps you to avoid a trainwreck, you’ll be better off for it in the end.

Time To Take The Leap!

There’s a reason they refer to business ownership as taking the entrepreneurial leap as opposed to the entrepreneurial walk. You have to go into it fully committed and energized. If you are at a point in your life where you are wholeheartedly passionate about becoming an entrepreneur, CatchFire Funding can help you make your realization a reality.

My highly qualified team and I will make that leap feel a lot less scary. We walk you through every step of the process and make sure you ask (and answer) all the right questions to ensure you don’t just invest for the sake of investing. At CatchFire Funding, we help our clients to invest wisely.

Contact us today to talk business and anything else that’s on your mind.