The trick to choosing the right option for you is understanding the nuances of each business model and how they complement your professional strengths, weaknesses, and business goals. Do you want to “do it your way” or are you more inclined to “follow a system”?
Starting an independent business can be very tempting, especially if you are looking to get out on your own and be your own boss. Still, creating a business from scratch, all by yourself, is no simple task. Not only do you need to have significant knowledge of the business, but you need experience, expertise, and a lot of luck. It will also require an enormous amount of time and always more money than you think. Impossible? No. Difficult? Absolutely. Worth it? Perhaps, if you are the type of person that doesn’t want direction and would prefer to go it alone.
Purchasing and starting a franchised business can also be difficult. The good news is that you aren’t alone. When you are a franchisee, you are in business FOR yourself, but not BY yourself. A good franchise has already been proven profitable and proven repeatable. The founders of the franchise have already made mistakes and wasted a lot of money, so that you don’t have to. This will not only save you a lot of money but will save you a significant amount of time and allow you to become profitable much sooner.
Still, what makes franchising so appealing? I will explore this question throughout the rest of this post.
What advantages do franchisees have versus owning an independent business?
1. It is Easier to Get Funding for the Business
Funding the business is much easier. Banks, the Small Business Administration, and other financial institutions are much more likely to fund a proven franchise system than an independent business startup for all the obvious reasons. Franchises have a better track record and therefore offer less risk to the financial institution than an independent business.
2. You Have More Access to Business Resources and Guidance
Starting your own independent business can be very glamorous and exciting. But there are some downsides to being an independent business owner. You won’t have the training, the resources or business connections as a franchise owner. With an independent business, you are completely on your own, and you must make decisions and guide your brand with your own knowledge and expertise.
With a franchise, there is a business model already in place. All materials, products, marketing, and operational systems are already formed and available. You will be trained in all aspects of the business and will have the support of not only the franchisor, but other franchisees as well.
3. You Are More Likely to Succeed
Independent businesses normally take a long time before they are at breakeven and eventually profitable. They need time to grow, adjust the business model, and eventually become profitable. This is not to say that you can’t create a successful business on your own. However, it will take more time, more money, and more skill to run a business that you have started from scratch.
Franchise businesses, on the other hand, are already established with a proven, profitable, and repeatable system in place. You are provided with everything you need to succeed and make a profit. Owning a franchise is not a guarantee that you will succeed, of course. But your chances of success are much higher when you have a business model to follow, systems in place and a franchisor that trains and supports you.
ABOUT THE AUTHOR
Bill McKee has been a business owner since 1993 and built several successful businesses. He has a fascination for understanding different business models and really enjoys helping people. For those reasons, he has been a franchise consultant since 2007 and has helped well over a hundred people to be awarded franchises. If you are interested to see what is available in your area, contact Bill at (972) 767-8433 or Bill@TheFranchiseConsultingCompany.com.