Start your own business or buy a franchise?
That is a question a lot of my customers ask themselves before coming to me. And truthfully, the answer depends on a number of things. I think it helps to first look at the advantages and disadvantages of each.
Having a great idea and using it to start your own business is a romantic and appealing notion. Even more so if you think you can make a living from doing something you are passionate about.
Think of the advantages:
– You have total control over all aspects of the business.
-You can play by your rules and use your creativity to build the business.
-You can do something every day you are passionate about.
-The start-up costs can be relatively small, with a large upside potential.
Of course, there are some disadvantages too:
– You must create the systems that run and sustain the business.
– Financing options are severely limited, especially in this tight credit environment.
– The failure rate for independent start-ups is high.
So what about a franchise? Well, like everything, there are advantages and disadvantages as well.
For many folks, the advantages are numerous, but boil down to several key ones:
– You have name recognition. This is more important in the food business but helpful in others.
– The blueprint/idea is already proven, and systems to grow and sustain the business have already been created and are ready for you to implement.
– The ongoing training and support that comes from the franchisor will continue to help.
– The failure rate for franchises is lower.
But, there are disadvantages:
– You have fewer industry options from which to choose. Many businesses cannot be franchised.
– You must sell the products and services offered by the franchise.
– You must pay a franchise fee up front. This can raise your cost of start-up.
I have often said in my seminars that true entrepreneurs will not buy a franchise. They want to create their own systems and products and run it their way. And for some folks, this is the right path to business ownership. On the other hand, a franchise fits many of our clients, especially those in career transition, by offering a blueprint for success. A franchise is asking for you to apply your expertise and skill set to an existing idea with a successful blueprint and grow it into a successful business… and own it. This is something many transitioning career employees have experienced and been asked to do as they have transitioned from one job or one company to another.
To start your own business or buy a franchise? We can help you make that decision. If you are ready to get started…..
–Mike Hall is the owner of FranNet Carolina, a franchise consulting company that matches clients to business opportunities