If you live in the this fantastic country; the USA, then count yourself extremely lucky as people around the world label the United States as the ‘Land of Opportunity’. In our country, there is an opportunity galore and you just need to find the right one for yourself. But, this is easier said than done, especially if you’re looking to get into business. Now, there are two routes to get into business: start your own business or buy a franchise. Here, I’m going to help you decide which one’s right for you. So, let’s get started!
You’re done working for someone else and now want to build your own business empire. There is just one little problem: you aren’t sure whether to start from scratch or get into partnership with an existing business. In simple terms, you can’t decide whether to start a business or buy a franchise. The good news is that I’m going to help you make a decision—the right decision—the decision that’ll help you build a business empire and become wealthy. So, without wasting any further, let’s get straight to business!
Factors to Consider in the Decision
A decision that many people think about but never practice is investing in a business to take charge of their career and life. Since this a major life decision, the apprehension is somewhat understandable. However, if you are brave enough and take the step that many hesitate to take, there are many potential rewards to be had. Since you’re here, one can only assume that you’ve decided to get into business, but aren’t sure how to start.
For aspiring entrepreneurs, there are many options and a common decision faced by them is whether to start their own business or invest in a franchise. Both opportunities involve many risks but come with a number potential benefits. So, deciding which one’s better for you can be a bit of a task. However, you can the decision easy for yourself by considering the following factors.
Compared to a typical small business, a franchise has a very different ownership model. Unlike the former, the latter doesn’t give you much freedom to change your products or services based on your preferences and changing market conditions. In a franchise business, most of the decisions about products and similar variables are made by the parent company.
While people with their own business have the luxury to make their own decisions regarding product lines and service offerings, they don’t have the security that decisions regarding product lines and service offering have already been taken and tested and they just need to implement them. So, in short, as far ownership goes, independent owners can make their own decisions but they don’t have the security and stability available to franchise owners.
The cost involved in starting a new business or buying an existing one and the fees to maintain the business is one of the major differences between an independent business and a franchise. Compared to buying a franchise, starting a business has a significantly lower average initial cost. Reason? Unlike the franchise business where a fee is charged by the parent company to give rights to start a franchise, an independent business doesn’t require paying anyone any fee to start the business.
Independent business owners don’t have to pay an initial fee to start their business but they miss out on the experience and reputation of an established brand by not opting to buy a franchise. Not only that, they have to spend considerable amounts to market their business, cost they would have probably saved by buying a franchise.
The aforementioned-cost savings are one of the major reasons many people today are choosing buying a franchise over starting a business. Also, when you opt for a franchise, the risk of failure is much less than it is in the case of starting your own business.
We briefly touched on this in the previous section but now we go into the details. When you start your own business, you have to work your socks off and pump a lot of money into marketing the business just so you can build a brand name. This costs you both time and money. On the other hand, when you buy a franchise, the brand name is already there and you just need to leverage it in the best possible manner to run a profitable business and make some money.
However, there is a dark side to this as well. Say, the parent company of your franchise does something illegal or starts to get negative reviews from customers about its products and/or services. Now, don’t you think it would affect your franchise? It most certainly will! Generally, if the franchises of a business are being run by people other than the owners of the parent company, most people wouldn’t be aware of it.
They will assume that all the franchises are being run by a single entity, and as such, will treat them as the same brand. So, if the parent company gets a negative review or gets into legal trouble, your franchise will be affected as well—negatively that is. So, think long and hard about this factor before making your final decision.
In addition to the aforementioned-things, there are many other factors to consider when deciding which one among buying a franchise and starting a business is better for you. However, the factors mentioned above are the most important considerations to come to a viable conclusion or decision. If you’re still confused about the route to take, get in touch with us and we’ll help you in your decision.
by Bobby J Davidson
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