The BizFilings blog covering business tips and trends.
Build a Business or Finesse a Franchise?
Published on Aug 25, 2013
Read 'Build a Business or Finesse a Franchise?' at 'Time to Start Up,' the small business blog by BizFilings.
You've decided to head out on your own and become a business owner. You’ve secured the funds, identified a market, and know what you’re looking to sell. Now there’s just one more question to ask yourself: Should you join an established franchise or build your own company from the ground up?
Your decision will probably be based on factors that include capital, goals, and personality. Below are some advantages and disadvantages of each option to consider as you determine what’s best for you.
Owning a Franchise
With a franchise, you have a built-in support system and a brand that’s been tried and tested. Hopefully, most of the expensive mistakes of that particular business have already been made, and you have a successful business model that has been proven nationally. Franchise opportunities usually come with advertising and marketing support, and in many cases, you’ll be provided assistance in hiring and help with regulations regarding that particular business. The business plan is already in place, and as an owner, your responsibility is to see it through successfully.
However, owning a franchise come with some sacrifices as well. Initial costs can be significant along with ongoing fees. You’ll also be limited to where you can buy supplies, and there will be a host of rules, regulations, and guidelines to follow. When you buy a franchise, you’re paying for name recognition and customer expectation and many of those lofty business dreams or spontaneous creative changes to branding, offerings, etc. that you may want to make cannot be changed as easily or ever as if it was smaller startup.
Starting Your Own Business
Starting your own business from scratch will be one of the most challenging and potentially rewarding things you can do. If you have ever wanted to ‘be your own boss,’ starting up could be the answer. The independence that comes with starting a business is something owning a franchise cannot offer. It’s an opportunity to implement your ideas, inject your personality, and infuse your philosophy into an organization from the ground up. If you consider yourself a determined and hard-working person and are willing to put some ‘sweat equity’ into the business, starting up can be very rewarding.
On the flip side, starting from the ground up will undoubtedly be challenging, costly and time consuming. You will be responsible for every facet of starting, maintaining and growing the business, virtually by yourself (no pressure!). There will be times when you may question your decision making. Days will be long and mistakes will be made. It will sometimes be a lonely, frustrating journey.
Whichever business venture you choose, make sure you review all the facts and tap into fellow entrepreneurs and startups for advice on business best-practices. Entrepreneurs, feel free to share your experience starting up or owning a franchise in the comments section below.