People with an entrepreneurial passion are always looking for new business opportunities. Persistent commitment to financial growth in comes with many different, often difficult, decisions.
One such decision many entrepreneurs face is deciding whether to start a business from square one; building it from the ground up, or choosing from thousands of franchises to partner with. There are pros and cons to each of these options. This post will break down the advantages and disadvantages to each option and hopefully guide you in making your next important business decision.
Starting Your Own Independent Business
Pro: Complete independence. When you start your own company from the beginning, you have complete control over every business decision and move the organization makes.
Pro: Setting your own schedule and your own hours.
Pro: You make all hiring decisions. This means you are your own boss, and you have the ability to ensure that you get along with, and like, everyone that works for you.
Pro: You control your profits, you get the money you make, without having to dish it out to a larger corporation.
Con: You have complete responsibility for your business. When you build a business from the foundation up, you lack a support system typically available to those in larger corporate structures.
Con: Although you get to set your own hours, without a support system, you will end up working far more than 40 hours per week, especially in the beginning.
Con: You have no successful business model to base your strategy on. While it is likely that you will be planning your new business based on a wealth of prior experience, it is also likely that in order to succeed you have a unique idea. This means that you are navigating into uncharted territory, alone.
Con: You have no marketing plan. Any successful business needs a detailed marketing plan. If you are starting your business from scratch you will have to create and implement your marketing initiatives from scratch too.
Buying A Franchise
Pro: Training programs. Typically franchises will have extensive training programs that help their franchisees efficiently hire and train new employees. This eliminates a time-consuming step in getting your business started.
Pro: Structured support. For many franchises this means dedicated account personnel, established marketing support, and in many cases, legal counsel.
Pro: Robust marketing initiatives. Franchise corporations often take on the majority of marketing spending as well as dedicate thousands of hours to spreading brand awareness for the franchise. This frees up your time to focus on other aspects of running your business.
Pro: Brand association. If you choose to buy a franchise you should diligently research the franchise you are considering to ensure they have a successful and well-known brand. If they do, being able to claim their brand and associate your business with that brand will help you gain customers and earn trust right off the bat.
Pro: Bulk supplies. Franchise corporations often have relationships with various vendors for the supplies needed to run one of their franchises. This means that you have access to bulk rates and discounts on the key ingredients needed to grow your business. This also alleviates the hassle of researching different vendors and managing relationships with them in order to get the best deal on supplies.
Con: Fees. Franchises always come with additional cost. Whether they are initial startup fees, ongoing payments, or both. These fees will vary based on the type of franchise and the industry they operate in.
Con: Conforming to the rules and regulations of a larger corporation. While you are technically your own boss, you still have to answer to a higher level of management.
Con: Top-levelcorporation trouble can affect you. Even though your business may be thriving locally, if the corporation as a whole experiences strife at the top level, this will undoubtedly affect your business and brand image.
There are risks and rewards to both options for starting a business. The most important part is weighing out the pros and cons of each model and deciding which one makes the most sense. You know yourself, your goals, objectives, business habits, work ethic, and personal style better than anyone else. Investigate the possibilities of each business opportunity and find one that fits you best.