Turning lemons into lemonade

The global credit crunch can be seen as a disaster for most businesses. However the slow economy is a great time to buy a franchise. For the savvy investor looking at business ownership there is the opportunity to turn lemons into lemonade by making some good deals.

There are a number of ways to take advantage of the situation. First of all interest rates are low -in fact they are at a 45 year low. The RBA governor Glenn Stevens has not ruled out cutting the cash interest rate from 3.25 per cent even though it is at its lowest point since 1964. The likely scenario is that interest rates are likely to fall further to a record low of 2.25 per cent.

Although money can be hard to come by for shaky borrowers, those people with good credit are getting some excellent interest rates that keep getting better as the RBA continues to reduce rates in an effort to boost the economy. If you are ready and looking to become a business owner then don't wait for rates to rise; low interest rates will mean more money in your pocket.

While start-up businesses are deemed risky, more so than ever banks consider a franchise purchase a safe investment. Banks are well aware that franchising has-a good record of success. Therefore, even in a weak economy banks are willing to provide loans for franchise purchases because they are well-tested business models, have thorough initial training, have mandatory marketing programs ensuring adequate advertising, provide continuing operational support and have local and national and recognition.

Currently property values for both buying and renting are now down. This is vital for any  business as the rent you pay can make or break it. Right now it's a buyer's market but as the demand for space increases so will the cost. If you find a good price in a good location, act quickly and negotiate hard. Just remember to have your lawyer check out the terms of your rental agreement to be sure you are getting the best deal possible.

Just months ago I was struggling to find any employees, today I have at least 10 walk-in highly qualified job applicants who can start right away. With a predicted nine percent unemployment rate there are plenty of employees available.

Redundancies and layoffs are happening daily and on a large scale with the likes of BHP slicing off more than 6,000 employees from its workforce without flinching. Companies of all sizes and types are reducing their worker forces as the economy slows. However, what's bad for one group of people can be a benefit for another. Almost every business needs employees and chances are you'll find more highly qualified workers to choose from during an ailing economy than a healthy one.

Finally if you are one of those laid off employees buying a business can help you land on your feet, I cannot think of a better way to recover from a personal hit than to start your own business. Think of it this way, you will never again have to ask for a promotion or pay rise or ask when you can take your next holiday.

If you truly want to be your own boss and take control of your career, this is an excellent tin buy a business, particularly if you invest in a solid franchise with great training and support.

By Tony Melhem - Franchise Council of Australia Deputy Chairman and Chairman of National Franchisee Forum

This article appears courtesy of Franchising Magazine