Betting Shop Franchise in an emerging country - Financing
started this topic @ 13:49 on 15/10/2011
Please pardon me if i come across as rambling.
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I have secured an agreement from a major sports betting company in europe for an exclusive franchise rights for betting shops in an emerging country. The potential in this emerging country is huge and i know that because a friend of mine is one of the managers for the only sports betting company in this country which started operations in 2010 and has since opened 2 shops and about to open a 3rd. The friend has been giving me insider information so i know how profitable this business can be in this particular country. It is making abnormal profit. I am in the process of obtaining a gambling license from this particular country to enable me set up a chain of betting shops. This is costing me a around $10,000 equivalent and the franchise from the european company is at a cost of £15,000 both of which i am able to fund myself. My problem is that the set-up cost (Shop rent, Equipment,shop redisigning) funding is proving a challenge and i think i may need an investor. Bearing in mind, this is a venture outside of the UK can anyone help me with direction to where i can get someone to invest?
RE: Betting Shop Franchise in an emerging country - Financing
| 17/11/2011 11:53 PM
Good luck with his venture sounds very interesting!
Just a personal view, but in my experience it is usually very difficult to raise finance when your business is still just an idea.
At the moment your bargaining position is quite weak, as you don't yet have the necessary gambling license! Any prospective financier would demand a high percentage of the business if you entered into an agreement at the moment as the risk is that you don't get the license and their money is lost.
One potential way of increasing your chances of investment, while your still waiting for the license is to carry out some market research. If you can prove to potential investors that your business has customers waiting to spend their hard earned money with you, then they maybe more prepared to gamble on an early investment, even if you haven't yet secured the license.
While I appreciate your friend has supplied you with inside information, it very difficult for genuine investors to take this at 'face value' after all, many frauds are based on people saying they have information that others don't, if only I had £10,000 I could make a cool £1,000,000! In fact 419 scams are still successful even today!!
Also as some one who has lived and started businesses in other countries, you should be very aware of outside issues that could face your business. While operating a betting shop in the UK is regulated and respectable, in some countries you may find yourself at the mercy of corrupt official, or even worse, organised crime!
I'm not wanting to put you off, but I think its only fair to warn you.
As I said at the begining, I genuinely wish you every success with this venture, but get the license first, and funding should be much easier to raise. After all, who's ever heard of a Bank that didn't like the opportunity to make a good return!