The bottom line is that franchises have a higher overall success rate than startups. Franchises operate under a predetermined business model that has already been successful, while independent companies make adjustments and decisions to their business model. You know you want to run your own business, but you can`t decide to buy a franchise or start a startup from scratch. By creating an overview of the pros and cons of each option, you can decide which one is right for your situation and personality. Buying a franchise always means having a backup, knowing that it`s really hard for you to fail, you expect ongoing support in every aspect of your business. You have the security you need, you do things your way, but you are always dependent on others, you have to keep in mind that for things, you are unlikely to disagree with the change. Scandals, actions and mishaps at the company level can also have a negative impact. Consider how Chick-fil-A franchise owners faced protests and backlash when the company`s CEO made comments about same-sex marriage, or how Subway franchise owners felt when the FBI indicted Longtime Pitchman Jared Fogle for distributing and receiving child pornography. If you don`t like the fact that your livelihood is tied to someone else`s image, you should stay away from franchises. Ultimately, the franchise owner runs the business, but the home office is the boss.
If this sounds too restrictive for your style, it may be best to start your own business. Professional freedom and growth: If you have your own business, you can work at any time. Depending on your company, you can also work wherever you want. You don`t need to contact other people. This means that you have your own professional freedom. Also, franchises can only grow to a certain point, but there are no limits to growing a start-up. Success rates for individual franchises range from just 40% to 100%. For example, Pinch a Penny., Mathnasium Learning Centers, and HomeVestors of America are among the top-rated franchise brands (according to franchise satisfaction data collected by FBR). Be sure to review the success rate of each franchise you study and talk to franchisees. Most importantly for many budding entrepreneurs, starting your own business will make you the boss in every way. That`s the beauty of being self-employed. You make all the decisions.
You set your schedule. You run the show exactly the way you want it. No one can tell you what to do because you own the business. If you know how to build a better mousetrap or run a better business, this is your chance to prove it to yourself and the world. Really, having a franchise isn`t as easy as it sounds, it`s not a start button you press and things start to happen while you`re sitting on the couch. Owning a small business gives owners the freedom to innovate and use their creative side, an essential part of any small business success. Starting a business from scratch works best for people looking for financial and personal freedom, who have a solid understanding of how to run a business and refine a grand idea. You can study companies like yours or in your market or niche to get a good idea of how you`re going to run your business and what your earning potential will look like. Chances you`ll make mistakes along the way and use those experiences to develop your own systems and solutions to solve those problems. Some mistakes you face can make you recover, but others could be riskier and hurt your business. These costs exist for both franchisees and small business owners. For franchisees, however, these costs often come in the form of fees.
With your own business, you start from scratch. If you are a sole proprietor, you have the purchasing power of only one. If you are a franchisee, your franchisor can negotiate mass rates and pass on the savings to you. Plus, having the power of a recognized brand behind you often relieves a supplier`s mind when it comes to lending: if a successful franchisor is willing to trust you, sellers are more likely to do the same. A franchise is a business that allows entrepreneurs to use their name, brand, systems and activities like their own, in exchange for ongoing franchise fees and royalties. However, not all franchises are a safe bet and not all independent businesses are destined to flop, which is why it`s so important to do your research. Franchising is seen by many as an easy way to start a business for the first time. But remember that franchising is not a guarantee of success and that the same principles of good management such as decision-making, time management (among others) still apply. Depending on the franchise you choose, you may have the choice to purchase a fully functional location or start from scratch in a new location. The first option allows you to get started and take over a business that has an existing customer base, documented cash flow, and an already existing workforce. Franchising also offers a clear exit plan. When you`re ready to retire, you can sell an existing, well-known business to another potential franchise owner.
Do you like starting a business or would you rather start with a fully functional business from day one? Either way, franchising would be an option for you. If you have an idea, you may be able to turn it into a business. Sam Walton did it with Walmart, Bill Gates did it with Microsoft, John Schnatter did it with Papa John`s, and countless other entrepreneurs did the same. With start-up costs as low as $10,000, having your own business — whether full-time or part-time, in your basement, garage, or even in the trunk of your car — is much cheaper than the costs associated with many franchises. And if all goes well, your unique idea could one day become a franchise! If you have big dreams and want a chance in the big leagues more than a steady salary, starting your own business may be the right step for your personality. Higher risk of failure: The main problem is that small businesses have a much higher risk of failure. To be honest, deciding whether to start your own business or buy your own business is a long and time-consuming process that requires a lot of research. You need to invest this time and do research in advance to minimize the risks and maximize the earning potential for your future business and investment. When you start your own business, you are alone. Many things are unknown – will the product sell? Will customers like it? Will you make enough money to survive? The failure rate is also high. Statistics show that 20% of start-ups do not survive the first year; about half of them reach the fifth year; and about 35% last ten years.
If your business is to survive, you have to do it alone. To make your dream come true, you can expect to work long and hard hours without expert support or training. If you try this on your own without any experience, the deck will be stacked against you. If that seems like too much of a burden to carry, the franchise route may be a smarter choice. Below, I`m going to list some of the great benefits that most franchises will offer you: Passion and enthusiasm are key ingredients to take a business from startup to success. .