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FRANCHISE
BUSINESS VS STARTING A NEW BUSINESS
By: Tony Hogan
TopBusinessIdeas.com
As an
entrepreneur, you may want to start your own business and make your own
path to success. If the thought of starting out on your own without any
training at all bothers you, perhaps you would be better off first trying
your luck with a franchise.
Here are some
common beneficial features of a franchise business:
- Well
structured business plans usually in place.
- Already
known brand name recognition possibly.
- Have
training in place to decrease failure rate.
- Ongoing
support if you have questions or problems.
- Proven
successful already, no need for trial and error.
- Easy to
expand to multiple locations (all the same).
- Collective
Buying Power (Everyone buys from one source)
- Location
Research Assistance
- Accounting
Systems in place.
Many of these
things are positive features that will help you succeed in business. You
don't have to worry about whether or not what you are doing will work,
because someone else has already tested it. As with everything, there are
a few negative aspects of a franchise as well:
- Lack of
creativity or freedom to do what you want.
- Often
times you pay royalties to Franchisor (5% gross/year)
- High
start-up costs (many require tens of thousands of dollars.
- Generally
have a contract to stay with franchisor.
- Pay for
percentage of national advertising campaigns.
If you have
never run a business before, franchises may be a great first step if you
have some capital to work with. The knowledge and real world experience
you can gain from owning a franchise can often greatly benefit you in
future businesses you open.
Here are some
common negative features of a starting a new biz:
- Sketchy
business plans at best.
- Nobody has
ever heard of you, so the trust is not there.
- You can't
buy things at a great discount typically.
- Little
Support or Training available.
- A lot of
trial and error to find what works and what doesn't.
- No
shoulder to cry on or people to blame but yourself.
Although
these seems a bit harsh, starting a business is not all bad. In fact, many
people who start a business on their own are more successful that those
who own franchises. The reason is because you tend to learn more when you
learn on your own. If someone is constantly telling you how to do things,
you never really learn them. You know that all you have to do is go ask
for help rather than digging to find the answer on your own. Here are some
benefits of starting your own business:
- Freedom to
do whatever you want. If you want to sell widgets today and the widget
market dries up, you can sell thingamabobs tomorrow.
- What you
make, you get to keep - no royalty fees.
- Generally
lower start-up costs.
- You pay
for only what you need, nothing else.
- Much
higher income possibility.
That is a
quick outline of a new business idea vs a franchise. It is really up to
you on what you feel is the best option for you. You can succeed with
either option as long as you give it 110% effort.
www.franchisewebsite.co.uk
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