Many people dream about leaving their 9-5 jobs and working
for themselves. Whether you want to buy a franchise or startup on your own, the
lure of being your own boss can be overwhelming, but which one is the better
option? There are many different factors to think about before you decide which
is the right choice for you. Here are some things you should consider.
Cost
The first thing you need to consider is the cost of both
options. Starting a small business from your garage or spare bedroom is likely
to be cheaper than buying a franchise, which may come with a hefty price tag. However,
have you done all the sums or just looked at the headline figure?
You
can spend a lot of money when you start a business. There are the suppliers and equipment to
consider. You will need to create a website, build a brand, and pay for
advertising. If you buy a franchise, these things will likely be included. It
may work out more cost-effective to buy a franchise, but you should consider
your options carefully.
Goodwill
Goodwill will bring customers through your door. If you buy
a franchise, you are also buying into the goodwill of the company. For example,
if you buy
a McDonald’s franchise, people will buy from you because it is McDonald’s. You
have a ready-made customer base. If you set up ‘Bob’s Burgers’, you will have
to advertise and build up that goodwill to get repeat business. It won’t be
handed to you on a plate. This can be the difference between whether your business
is a success or not.
Outside Involvement
If you buy a franchise, you will also buy a company logo an
existing supply chain, and the training and support to make a success of it. However,
this does mean that the franchise company might be a lot more involved in the
running of your business than you want them to be. If you want to start a
business so that you can make all the decisions for yourself with no outside involvement,
then a franchise might not be right for you.
Exit Strategy
Consider your exit strategy before you go into business.
There is a
range of franchises for sale at any time. Check out Franchise Local to see
what franchise for sale opportunities are available in your area. It is a
national directory of franchise listings.
You may be able to sell your independently owned business,
but the price depends on how well your business has done. This can be a huge
risk, for example, if you were relying on your independent business to pay for
your retirement and you go bust before this, as you will have to change your
plans. This is not as likely if you have brought a franchise.
There is no right or wrong answer to whether a franchise is
better than setting up an independent business. It depends on personal
preference and what risks you would prefer to take.
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