Do you want to become a sub broker franchise owner?
You might choose this option when you have already worked with an established broker. So, with sufficient experience under your belt, starting a sub broker franchise might be an excellent move.
However, you need to figure out the most crucial aspect of the business – the capital.
To understand the amount, you must consider factors like franchise expenses and office space costs. To support your sub broker franchise journey, we’ll talk about its capital investment and related details in this post.
Let’s begin with the different factors deciding the investment amount.
The investment is about the stock broker you want to start your sub broker franchise business with. So, you must select the appropriate stock broker matching your investment capacity.
Start by choosing a reputed stock broker who has reasonable franchise setup expenses. It’s essential to understand their sub broker business model and associated expenses. After this, it will be convenient for you to select a stock broker.
After successfully selecting a company, look at their initial deposit and registration fees. The initial deposit for a franchise is approximately INR 50,000 to 200,000 or 300,000 for most brokers. This deposit will be the first step in working with them.
Then comes the registration costs, around INR 10 or 15,000 to 20,000.
Some stock broker companies might allow you to partner with them and begin sub brokership without deposit. The broker might provide this offer to improve their business opportunities.
So, if you find such a stock broker, discuss the benefits they provide with the deal. Enquire about revenue sharing, technical assistance, marketing support, business training and opening account incentives and if it’s registered under SEBI.
Most importantly, understand their eligibility criteria to see if you are suitable for business. If you are eligible, you might have to submit a processing fee along with the relevant documents like identity proof.
So, it is vital that you understand the entire payment structure before signing up for a stock brokerage firm.
It’s time to focus on your office space. These expenses will differ according to a home office or rented space. For those with a home office space, you need to bear internet connectivity, electricity and technical equipment expenses.
- The average internet expenses are around INR 500-1000.
- The approximate residential electric bills are INR 6-9 per unit.
The costs for purchasing office supplies will depend upon the number of employees in your team. A laptop, printer, speakers, headsets and a landline will be sufficient if you work alone. All these might cost around 2 to 3 lakhs.
Renting office space can be INR 15,000 to 40,000 per month, depending upon the location and the cost/square feet.
Alternatively, you can set up your office in a co-working space. Here, the rent for each seat or desk is INR 12,000 to approximately 15,000. These spaces will offer you essential office supplies like gadgets and the internet.
However, the expenses for paying your team members will depend purely upon team size and your revenue. The higher the revenue, the better their salaries will be.
A sub broker franchise business will be successful when you select the correct stock brokerage firm. So, take your time while selecting the broker. Understand the requirements and consider customer reviews or testimonials before making the final call.
Starting the franchise business will require a capital of almost INR 3 to 5 lakhs. So, after selecting the broker, start controlling your monthly expenses. Prepare a budget and follow it diligently to have sufficient funds for the franchise.
Cautious and responsible financial habits will help you grow your business in the long run.