If you’ve decided to start a business then you are probably considering which route to take to achieve your goal. As the article topic promises, we’ll dive into all you need to know about owning a franchise and building your own startup so you can have better insight into both options and make a more informed decision.
The Pros Of Buying A Franchise
Better Chance At Success
Since the franchise has probably been around for a longer time, they must have perfected their processes and structures over time. This experience is what gives it better insight and strategy for success. They have foolproof knowledge on the best marketing strategy to use, the best work culture to maintain, and the best way to run their day-to-day activities to stay afloat. All of this makes success for them much more feasible and thus equally easy for you to attain when you buy into the franchise.
You Don’t Have To Build Brand Recognition From Start
Franchises have already cultivated brand recognition and even brand loyalty, so when you buy into the franchise this will rub off on you. Buying a franchise usually means you get all the details on owning a franchise, so you won’t need to start figuring out branding or struggling to give the visibility of your products in an overcrowded market. You can just sit back and enjoy the visibility the brand already has.
Support And Training
When you buy into a franchise, it becomes your franchisor’s business to make sure that you succeed because your failure will look just as bad for them. This is why there is “franchisee support”; a system designed to make sure you get all the training and resources you need to succeed with the business. The franchisee support can come in different ways. It could be comprehensive courses designed to give you a better grasp of the business system and processes. Alternatively, you could get sales, marketing, and tech support to assist with building and serving your own customer/client base, all of this is just to ensure that you are well equipped to maintain the business’s top ratings.
The Cons Of Buying A Franchise
It’s Usually Expensive
There are major fees that you have to keep paying to maintain your franchise even after paying the initial (usually high) fee of buying into the franchise. The other fees are usually fixed and billed at a monthly or yearly frequency and if you want to keep using the brand name you will have to keep paying these fees.
Because the franchise already runs on existing systems and processes you have very little say as to what should change or remain the same. Some people find this lack of autonomy restrictive and frustrating. However, the truth is that if you want to keep the franchise license you will need to adhere to the rules and regulations the franchise operates under.
Starting your own business
The Pros Of Starting Your Own Business
With a startup, you get to express your business idea the exact way you imagined it. You get to flex your creativity and be as innovative as you want, which is truly every creative person’s dream. So if you like to have your ideas expressed in a certain way, a startup is your best bet.
If you’re building a startup then you have the autonomy to make all final decisions. You get to determine the working hours, the work culture, the branding direction, product design, and marketing strategy. Additionally, you don’t have to subject your decisions to anyone else’s approval. You literally have the freedom to be whatever you want to be and even more importantly, you have the freedom to test the validity of your ideas. Mind you, while there is a limit to the growth of a franchise, there is no limit to the growth of a startup business.
The Cons Of Building A Startup
While with a franchise you will be entitled to training and support from the franchiser, with your startup you have no such cushioning, you are left to try out your theories by yourself and gamble on their success.
High Failure Rate
It is a sad reality that startups have a higher failure rate, especially when compared to franchise businesses. Studies have found that as many as 25% of startups fail in their first year, an even bigger 50% fail in 5 years and only 30% make it to 10 years. This makes it an even tougher gamble for you to succeed if you decide to build your own startup.
Nevertheless, with great risk comes great reward. While it might be a tough gamble, if you succeed it would be well worth the risk.