Starting a Business vs. Buying a Franchise: How to Tell Which Is Right for You
19 Apr 2019
Whether you are thinking about starting your own business or maybe buying a franchise, there are certain advantages and disadvantages to consider in both of these instances. With only a couple of goals in mind – customer’s satisfaction and profit, respectfully – you are surely on the right track of making sound business decisions.
When it comes to answering these types of ’what came first – the chicken or the egg?’ questions, you have to take into account many different factors and things. And although there is no and can never be just one definitive answer to the question of whether you should start a business or buy a franchise, there are surely some cues and signals that you can follow. It all depends on your particular case, and you should be highly skeptical of anyone who tells you that you need to choose only one scenario.
Things like the actual type of business, geographic location, existing customers base, among various other things all have to be taken into serious consideration when deciding whether to start on your own or buy an already existing franchise.
That’s why we are giving you the list of general pros and cons, so you can decide what’s best for you based on some very important criteria. You want to maximize your chances of success, so you need to carefully examine which opportunity is best for you.
The Advantages of Becoming a Franchise Owner
Ongoing Support and Help
When you decide on becoming a franchise owner, you can opt for a plan where you own and run the business on your own, but you also get help and ongoing support from the franchisor. You are using the preestablished network and are avoiding all the unnecessary bumps on the road, that are bound to happen when you are starting on your own. The franchisor gives you a certain blueprint for success.
This can save you from a lot of trouble and spares you from headaches associated with hard beginnings. Essentially, you’re playing it pretty safe when you opt for buying a franchise. Ideally, you know exactly what are you getting yourself into. The franchisor gives you the much-needed safety net, by providing you the projects, logistics and giving you the support and help whenever they are needed.
You Don’t Have To Build the Reputation From Scratch
In such conditions, you are also taking advantage of the fact that the franchisor already has a set, fortified and entrenched product, brand and overall reputation. It’s all about that customer cred, right? That’s why companies like Chatime franchise give you the opportunity to flourish under their wing. For instance, by taking over a branch of the already worked out business, you are minimizing the danger of failure.
On top of that, you don’t have to worry about hiring marketing experts to get your business started. Chances are that the brand and the company are in full swing by the time you join them (otherwise, why would you even take that risk? If the franchise isn’t all set and running full steam or barely stands on its own, you might want to look into some other options).
Start Earning Money Right Away
All this naturally leads to one thing: making profit more quickly. When and if you don’t have to worry about developing projects and logistic from zero, when and if you are not bothered by building up a brand or a product – you are putting yourself in the position to start earning money right from the get-go. The business is already structured properly if you are lucky enough.
On top of this, you are also saving time that you would otherwise have to spend persuading lenders to provide funding for your independent venture. Also, this gives you the opportunity to start swimming with the bigger fish from the very beginning. You don’t have to concern yourself with being invisible and spending the precious time climbing up the ladder.
The Advantages of Starting a Business On Your Own
What’s one person’s preference, it’s the other’s disadvantage and vice versa. The same can be applied to this specific decision whether to go solo or join the existing franchise.
You Get the Chance to Be In the Driver’s Seat From the Start
Some people are reluctant to join the winning team because it’s not challenging enough for them. They need to be fully in control of everything and they are all about the journey and not the destination.
There certainly is something appealing to being your own boss. You are doing things on your own terms and you are the only one responsible for both success and failure. If you’re not driven only by money, but also by power, chances are that you’ll be more content with starting and building a business from scratch. In this scenario, no one dictates you anything – for example where to purchase products and services from.
If Others Aren’t Performing At Their Best, You’re Also Suffering
It’s nice to have a safety net when you are just starting and everything is running smoothly, but this unfortunately also means that you are depending on other people’s abilities more than usual. If the franchise is underperforming currently, it will also affect you greatly.
Consequently, if the franchise goes out of business, you will lose the job as well. You can’t avoid either positive nor negative impact: you share the good and the bad just like in a regular marriage.
You Don’t Have to Pay Ongoing Fees To the Franchise
In most cases, the franchisee has to pay fees like a percentage of the profits to the franchisor. When you are on your own, you don’t have to worry about these things. The profit that you make is only yours, so you take full responsibility for everything.
If the franchise is doing bad, the people in charge can decide to go in a different direction than maybe you would. Your word isn’t as valuable as it would be if you were the sole owner of the company.
We gave you some pros and cons to the question of whether to start a business on your own or to buy a franchise. All things considered, you have to take into account your distinct situation when making this decision. The important thing to remember is that there can’t really be just one answer that suits everyone. You have to look into all the specifics and decide based on your particular preferences and the situation you’re currently in. Different scenarios might be suitable for you in different stages of your life.
Lucas H Parker
I am a business consultant with a passion for writing. Doing my research, exploring and writing are my favorite things to do. Besides that, I love playing my guitar, hiking and traveling.
13 May 2019 - Business