Starting A Franchise
Pros & Cons of starting your own franchise
There are many reasons why you might be considering becoming a business owner. Perhaps you’re tired of working for someone else, and are ready to be your own boss. Maybe you’re looking for an opportunity that will allow you to work from home and enjoy a better work/life balance. Whatever your motivations, the most important thing to consider when starting out on your own is whether you want to go it alone, or find a franchise opportunity that suits you.
Whilst setting up your own business from scratch may have its appeal, investing in a franchise often proves to be the most secure, cost-effective, and profitable option, and offers many long-term advantages that an independent business venture simply cannot.
Here, we break down the benefits of joining a franchise vs. starting your own business:
One of the major advantages of investing in a reputable franchise is that you’ll be marketing, consulting on, and selling an in-demand product from an established national brand. This product will have already been heavily market tested, so you can hit the ground running. It’s this that makes joining a franchise a turnkey business opportunity, as there’s no need to spend time and money developing, trialling, and improving your products and services – your new business is ready to start working for you from the word go.
Starting a business from scratch can be a lengthy process, taking you anywhere from 3 months to a year to get going, and when you do, you’ll still have to build your market share – and your brand credibility – from the ground up. It can take a lot of effort to find something that sticks, and many potential customers may be put off because they either don’t know enough about your products, or because they’re unsure about working with a newly established business – just one reason why 60% of start-ups fail within 5 years.
Franchise Operating System
For a franchise to flourish, it has to have a proven business model. This means that when you partner with a marketable national brand, you’re investing in a well-oiled machine that has been tried and tested many times over in order to deliver the best possible outcome for both franchisees and the franchisor. There’s no trial and error involved on your part – simply follow the guidelines set down by what has worked effectively for the existing franchise network, and you’ll reap the rewards of a winning formula that has been optimised for your target market.
When you set up your own business, you forego the security and stability that comes from using an established operating system. Instead, you’ll have to invent the wheel several times over, and when things go wrong, it’ll be up to you to pick up the pieces, cover the costs, and find the time to spend on getting things right in order for your business to survive.
Cost of Franchises
Partnering with a franchise typically requires a much lower financial investment than starting your own business. You’ll pay an initial franchise fee and ongoing royalties, but your franchisor should cover the cost of business expenses such as training, customer support, essential resources, and much more. You’ll also experience a faster return on your investment thanks to the reputable brand, support of an experienced team, and established business model.
Whilst the price tag for setting up your own company is dependent on a variety of factors, the first few years of a new venture can prove to be particularly expensive as you invest time, money, and effort into sourcing and storing stock, premises, and staff; building a customer base; and establishing your brand. There are also likely to be greater costs in the long run, thanks to the experimental nature of running a start-up.
Franchise Training & Support
By joining forces with an established franchise, you’ll have access to extensive training and ongoing support. Very often, no prior experience or expertise is required in order to succeed, as your franchisor will provide you with expert guidance on every aspect of your new business, often in the form of training courses and on-location training. You’ll also have a strong support network behind you every step of the way, with your franchisor offering dedicated support personnel for marketing, finance, HR, etc., and your fellow franchisees on hand to supply peer support whenever necessary.
Starting your own company can be a steep learning curve. You won’t necessarily have anyone to reach out to when you have questions, so will have to go it alone on a trial and error basis. On top of this, you’ll be required to become a master of multi-tasking and take on the roles of business developer, marketer, salesperson, account administrator and more. When you want to employ staff to fill these positions, you’ll only be able to do so if you’ve already experienced significant business growth, making it difficult for you to move your business forwards.
Franchising Success Rate
Franchising involves building a successful business by putting in place a system that works and establishing a recognisable brand around it. A franchise is therefore a proven model, and as a result, failure is unlikely when you invest in one. As with any business, there are a number of factors that can affect your level of success, but ultimately, if you follow the system and put in the effort, you won’t go wrong. In fact, a record 97% of franchisees in the UK reported profitable growth in 2016, whilst the failure rates for franchisee-owned businesses remain incredibly small compared to those of independent businesses.
The risk is obviously much higher for start-ups, with business failure a real possibility. Just 4 in 10 small businesses in the UK will still be trading after 5 years, so any chance of success, especially long-term, is significantly lowered when you decide to launch your own business over joining a franchise.
To find out more franchises and receive information why not use our free franchise matching service by completing the form below;