The Million Rand Question

Can you afford a franchise? Use this personal balance sheet to assess yourself.

The Million Rand Question

Right here is one of the most informative and valuable exercises you can do before investing in a franchise. By filling out this personal balance sheet, you’ll be able to determine your net worth which is an important step in the process of becoming a business owner.

Why? You’ll discover what assets are available to you for investment in your business, and it will also help you get a clearer picture of whether a bank will be likely to finance you or not.


When the numbers don’t balance

Once you’ve subtracted your liabilities from your total assets, you’ll be able to see what your net worth is. For example, if your total assets amount to R1,5 million, while your total liabilities amount to R750 000, your net worth is R750 000.

Conversely, if your total assets amount to R500 000 and your liabilities amount to R750 000, your net worth will be –R250 000 aka, you’re in debt of R250 000.

It’s not the end of the world if your net worth is in the red. Though an uncomfortable exercise, it will help you change your spending behaviour and reduce your expenses, while working towards your goal of being your own boss.

Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

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