Many people aspire to own their own business, but few ever realize this dream. The perks of being your own boss are enticing to many but the perceived risks of being self-employed hold many of us back.
Starting a business is not as glamorous as one might think. First, you have to come up with the concept which is not a simple task. Second, significant upfront capital investment is required along with the investment of your time. Also, there is no guarantee that your business will succeed and you will likely find that your business does not make money for quite some time after opening the doors.
Opening a franchise business may be a good alternative for those who seek to own their own business. Franchisees are provided with the benefits of being an entrepreneur along with the resources of a large company. A franchise business is a business for yourself, but not by yourself.
A franchise can give you the independence of small business ownership with the support of a big business network. Most importantly, a franchise business can help you achieve your entrepreneurial dreams.
Reasons to Open a Franchise Business:
Opening a franchise minimizes the risks associated with starting your own small business. Many argue that this success is offset by franchise fees (often a percentage of sales), however, the costly mistakes of trial and error when starting your own business can be financially devastating.
The lower risk profile of franchises is well understood by banks which are often reluctant to finance independent small businesses but sometimes willing to finance the capital cost of a franchise business.
Franchisees are able to avoid the hurdles faced by independent small businesses because of a solid foundation built by the franchisor. Human resources policies, safety procedures, bookkeeping processes, and systems implementation are just a few items that your franchisor will likely provide you with that you would otherwise have to develop and figure out on your own. With the right tools available, you will be able to devote your time to actually running your business and growing revenue.
Though execution is critical and the result of an entrepreneur's personal drive, a franchisor can help you better understand what is required to succeed as a franchisee. This can serve as a roadmap to help you execute effectively.
A successful franchise will already have an established customer base. While most new businesses focus on increasing their brand awareness, franchisees buy into a brand that customers are already aware of.
Marketing and advertising are often facilitated by the franchisor. The mediums used for advertising will be researched by the franchisor’s marketing team and consequently more effective at increasing sales. This will prevent you from making expensive mistakes with your precious advertising dollars. In addition, you will benefit from the buying power of the franchise which should help to keep advertising costs reasonable.
As a franchisee, you will also receive access to the resources of the organization. Shared resources such as call centres, software platforms, national advertising and public relations campaigns are handled by the franchisor. For a typical small business, these resources would be unavailable.
Franchisors want their franchisees to succeed. As your sales grow so do their royalties. In other words, when you succeed so will your franchisor. Your operational success is in your franchisor’s best interest.
To start, we suggest assessing your current financial standing. Starting a franchise, or any business, comes with some risk and there is no guarantee that you will see a profit. Evaluate your finances and see if you are in a good position where you can get by without an income for some time. Maybe try living on your spouse’s income for a period of a few months to see how it impacts your lifestyle.
Also, make sure you can dedicate enough time to a new business. If you have a busy schedule, starting a business may not be a wise decision. Opening a franchise is a full-time commitment and you need to have time dedicated to working in your business. This will probably mean leaving your job in the corporate world. Do not discount the benefits of stability from your job, but also realize that the short-term pain of getting a franchise business off the ground can be financially rewarding and personally fulfilling.