Want to open your own business and be your own boss – – but not sure how to do it? A franchise could be the answer. Many of the businesses you visit on a regular basis are franchises – from the place you grab your daily burger to the nice folks who groom your dog. Franchises are popular because they work – and picking up a proven business model takes a lot of the guesswork out of starting a new business.
A franchise can allow you to start the business of your dreams, but franchising isn’t for everyone; learning more about what to expect can help you make the right choice for your new business.
Do you Need Financing?
A bank may be more willing to fund your business dream if you purchase a franchise. A franchise is a proven business model – you may have an excellent idea, but you don’t have the brand recognition of a McDonald’s; a restaurant you create yourself may actually be harder to finance than an established brand franchise. If you know you are going to need to borrow, then a proven franchise may be a better bet, particularly if you have never run a business before.
How Much “You” do you Need?
A franchise has value because it is branded and instantly recognizable. All units look the same (or are very similar), offer the same product line or menu of services and advertise in the same way. If you purchase a franchise, you’ll have to conform to that franchise’s particular style and way of doing things. If you prefer to do things your own way, want to tinker with the way the business is advertised or with the way it works, then a franchise may not be your best option.
Can you Afford a Franchise?
If you are starting your business on a shoestring, then a franchise likely won’t work. From the initial investment to the ongoing costs, you’ll need to bring a hefty amount of cash to the table. Is your personal finance or bank account up to the task? The actual dollar amount needed to get started with a franchise can vary wildly. In 2015, a Merry Maid cleaning business would set you back about $31,000-$50,000, while a new Taco Bell would start out at a whopping $1 million and could go as high as $2.5 million.
Consider a franchise if the branding is important – and you have the assets or the ability to finance your new business. If you have less money available and are unable to borrow the amount needed for a franchise, a business that you create yourself will allow for more flexibility.
Do you Have a Dream?
If you have a dream or vision of what your ideal business looks like, then you either need to find a franchise that suits your dream or take your own path entirely. Because franchises by their very nature need to be cookie cutter versions of one another – a Subway in Pennsylvania needs to look the same as a Subway in Florida – your own vision may not align well with a pre-packaged business. Choose your business model wisely and make sure that the franchise you are considering truly matches your dreams and expectations.
Both franchises and stand-alone businesses offer plenty of benefits to new entrepreneurs. Learning more about your options and what to expect from the franchise process allows you to make a truly informed decision about your new business and your future.