You will face challenges of all kinds when starting a business or running a franchise. There are benefits to either business model and making sure the benefits outweigh the drawbacks is one way to tell which is best for you.
When you invest in a franchise you have less work to do in terms of learning how to run it. A business requires learning how to run it as you go which can be much more challenging. You do not get a blueprint for running it successfully before you start. With a franchise, you have the advantage of following the proven processes and knowing that you will most likely meet with success.
Franchises can be more expensive to get started in than businesses can be. This depends on lots of factors, but with franchises, you often need $25000 or more to get into the location you want. You also have to pay a franchise fee and pay royalties to the owner for the sales made at your location each year. This can cut into profits.
With a small business, you can easily start something online for several hundred dollars. Yet, you also have to build it from the ground up. With the franchise, you do not face this challenge because the business is already up and running. With your own business, you have to figure everything out one step at a time.
If you are business-minded you may prefer the challenge of starting your own firm rather than getting involved in a franchise. This is because the franchise has set rules that dictate how things are done. With your own business, you get to create how things are done. It can take trial and error but for creative entrepreneurs, this is all a part of the excitement.
With your own business, you need to be creative and innovative. If you are an independent thinker and you love problem-solving and succeeding at reaching goals, a business is the way to go for you. You might feel stultified at a franchise because innovation is not a requirement to run it.
Talk to an attorney to discuss the challenges that you might face if you start a business versus buy into a franchise. Franchise agreements are complex and starting your own company requires that you choose to set it up in a legal formation such as a corporation or an LLC. An attorney can help you navigate which is best for you.
Another challenge with businesses is that they have high failure rates. According to Entrepreneur online, the statistics show that 25 percent of startups will fail in the first year and 50 percent fail in the first five years. Starting a business can be risky but you also stand to net more money if your business succeeds.
With a franchise, you face the challenge of having to deal with a limited amount of growth. You cannot expect to expand or create new ways of doing things for a well-established franchise. Both franchises and businesses have challenges. You need to decide which are preferable for you to face to determine which type to get involved in.
Important Tips For Franchise Owners To Know About Getting Started
How Can A Franchise Use Social Media To Market Their Business.
Challenges of Starting a Business Versus Running A Franchise
What Services Can You Offer When You Run A ComplexCity Spa Franchise
Reasons To Own A Spa Franchise Instead Of Starting From Scratch
The Most Lucrative Spa Franchises In America