Even in a weak economy, there are franchising opportunities with great potential to produce high profit margins without fail. These are usually business ideas with low operating costs, low competition and high barriers to entry. Typically, good franchise ideas can turn into profitable ventures because they are businesses that already operate successfully for years in diverse market conditions. Besides, in most of the cases, hands-on training is provided to ensure a thriving performance.
Here is a list of 5 low-cost franchise ideas:
1. Financial Services Franchises
Financial services franchises include income tax preparation, accounting, and insurance services. Profit margins are high because they don’t include fixed expenses such as rent and wages. Often, these types of franchises are established as home-based businesses. The barriers to entry are high because the services provided are professional and require expertise in the field. Also, they generate repeated income. For instance, every April people make their taxes, which is a recurring source of income for this type of business.
Some of the most popular low investment financial services franchises with initial investment between $25,000 and $110,000 are CFOToday Inc., Jackson Hewitt Tax Service, Liberty Tax Service and H & R Block.
Professionals who are interested in starting a financial services franchise need to be certified by the Certified Financial Planner Board of Standards.
2. Tutoring Services Franchises
The increasing demand for tutors on high schools or even grade school students creates great opportunities for people with tutoring background to start a tutoring services franchise. By hiring a tutor, teaching is customized to the level and needs of each student.
Profit margins in tutoring services franchises are high because there are no fixed expenses included. Also, the barriers to entry are high because the services provided are professional and require expertise in the field. Besides, tutoring can also cover music, arts, or sports. Therefore, a tutoring services franchise is a source of residual income because there will always be children willing to be taught football, or piano, or getting help with math.
Club Z! In-Home Tutoring Services and Tutoring Club are two very popular low investment tutoring services franchises with franchise fees ranging between $20,000 and $34,500 respectively.
Professionals who are interested in starting a tutoring services franchise need to contact the National Tutoring Association.
Stay At Home, Right at Home Senior Care, The Senior’s Choice and Senior Helpers are some great low investment senior care services franchises with initial investment between $50,000 and $99,600.
Barriers to entry are high because the market is specialized and there is residual income because people are getting old. Although the cost might be higher than other options due to specialized personnel, it still remains a low investment franchise opportunity.
People who are interested in starting a senior care services franchise have to have a nursing, social work, psychology, or gerontology degree to offer geriatric care management. Also, it is often required to hire specialized personnel for medications and other tasks including bathing, or relocating.
4. Food Services Franchises
Food services franchises are extremely trendy because people always find time to feed themselves and have coffee. This creates numerous low investment franchise opportunities that are not affected by the broader economic conditions. Barriers to entry are low because there is no particular specialization. However, it is a market that never ceases to be profitable because it meets a basic human need.
Some of the most popular low investment food services franchise opportunities are Pizza Inn, Hot Stuff Foods and Cuppy’s Coffee with franchise fees between 0$ and $50,000.
5. Technology Services Franchises
Technology is another popular category where one can find really low cost franchise opportunities. Particularly, tech-savvy individuals can establish an Internet-based business and take advantage of the low costs involved. Barriers to entry are high because the market is specialized and technology includes many fields (hardware, software, networks etc.)
Overall, people who consider starting a franchise should not only consider the initial capital requirement, but the relationship of capital required to business value. Sometimes, low investment franchises are not high value ventures and on a long-term horizon this may prove disastrous for the franchisee.
