Deciding to start your own business is both exciting and scary, and for many people it is a lifelong goal. These entrepreneurs intrinsically realize that owning a business is not just financially, but emotionally rewarding as well.
However, for many first time entrepreneurs the thought of starting a business from scratch is a bit overwhelming or not financially feasible. An alternative to starting a new business is to buy a franchise. We are surrounded by franchises everyday, from fast food to cleaning services to business services.
In most cases, purchasing a franchise is like buying a prepackaged business. All the necessary information, products/services, training, marketing, operational expertise, business plan, etc. is supplied to the buyer (or franchisee) from the franchisor (franchise system owner). For this reason, a franchise is a very different animal than starting a brand new business on your own.
Buying a franchise offers entrepreneurs the chance to own a business with fewer unknowns or variables. Often, the profit potential of the business is already established or known. The anxiety inherent in having to spending years before you can determine the upside of your business is almost completely eliminated.
While a background in business is probably useful, it’s not necessary when you buy a franchise. The training provided by the corporation is usually extensive. You are taught all the secrets of profitability, therefore eliminating the learning curve that is there for non-franchised businesses. The corporation you are buying the franchise from wants you to be successful as much as you do.
Because a franchise is, by its nature, an established and known business concept, banks are generally more willing to give loans to people purchasing one. In today’s very tight financial market, this can be critical for someone who doesn’t have a large sum of money ready to invest. Banks are also more willing to work with a business that has a steady or predictable profit margin. When you own a franchise, the prices are fixed or guided by the franchisor, therefore your profit margin is much more predictable.
For many people, the thought of planning and implement a comprehensive marketing strategy induces panic. When you buy a franchise there are several benefits. First, the franchise often has built-in brand recognition. This will help you gain acceptance with customers as soon as you open your doors. Second, the franchisor often provides a marketing blueprint for you to follow. Having worked for other franchisees, it should also work for you. Finally, the franchisor often pools franchisee dollars to implement a regional or national marketing campaign. All of these benefits provide you a leg up when you are just starting out.
Buying a franchise is a big decision. While financial success can’t be guaranteed, the anxiety that surrounds becoming a business owner are greatly reduced when the franchise route is taken.