Last Updated on Apr 1, 2020 by James W
While a job offers the security of a fixed salary, it can also be frustrating realizing that no matter how hard you work, you’ll earn the same wages every month. Although there is no longer a cap on your income if you start your own business, it can be difficult starting from scratch, especially if you’ve never run a business before. However, one route to business ownership you may not have considered is franchising.
A Proven Business Model
When you own a franchise, you can own your own business without researching and testing a new business idea. You basically don’t have to figure everything out for yourself or risk making expensive mistakes. When you buy a franchise, you’re buying a business model that has been tested to deliver a product or service in a profitable way. Essentially, you are duplicating a business process that has been proven to work. In short, it’s a turnkey solution.
Let’s suppose you like the idea of opening up a retail store. After reviewing various retail franchises, you pick a UPS store franchise because you spend a lot of time using your local store to handle all your postal needs.
When you make your decision to invest in a franchise, what exactly are you buying?
You’re getting detailed instructions on how to set up your own business, as well as all the training you need to perform every business task you need to do on a daily basis. While you have your own business, you’re not alone.
Moreover, the support doesn’t stop after you’ve got your own store and now know what you’re supposed to do to run it. Besides operating your store, you’re given plenty of information about how to market it.
In addition, you’ll meet other franchisees who will walk you through their own high-volume store and explain to you what they did to grow their business.
A Network of Support
One reason many small business owners fail is because they don’t have any support when they desperately need it. They don’t have anyone to answer their questions. They make blind guesses on what to do and end up making some bad decisions.
While they may have plenty of the right stuff to be successful—they’re aspirational, hardworking, and diligent—they often don’t have any experienced people to guide them when they are confused about what to do about a business problem.
However, as a franchisee, you can call a corporate call center or contact a field support personnel to get clarity on how to achieve your goals.
When you have your own individual business, you don’t have a support system. When you’re part of a franchise, you have an entire organization that is rooting for your success. What’s more, many of the problems that you find bewildering have been solved by others.
Reduce your Risk
Starting your own business has inherent risks. You’re not sure what to do and you may be working in unfamiliar territory. While you may have plenty of theoretical business knowledge, perhaps even an MBA, you lack the experience to solve real world business problems.
One way to slash that risk is by belonging to a group that has developed a viable operating system. Through trial and error, the founders of a franchise have learned how to build their brand and how to dominate a particular market. By using their proven system, you don’t have to invent your own.
A purchasing contract by the franchisor can provide you with steep savings on products because of the heavy volume that is bought. You are likely to get discounts on products you sell or the equipment you need to make your own products. Discounts also apply for store fixtures, delivery vans, office supplies, and many other things.
National Brand Recognition
It takes a substantial amount of marketing over many years to build a brand that people recognize instantly. Generally speaking, people are not likely to buy something they don’t know much about. By joining a franchise, you are leveraging the superior advertising power that the franchisor gets by combining the advertising funds of numerous franchisees.
Don’t Do it for the Money
Only buy a business you are interested in doing for its own sake. Don’t do it for the money alone. The money will come if you have a passion for the line of business. For instance, only buy a cleaning franchise because you get excited over things like clean floors and clear windows; or only buy a food franchise because you like the idea of running a great restaurant; or only buy a retail franchise because you like helping customers meet their needs.
Although there are numerous advantages of buying a franchise as opposed to starting your own individual business, you must have realistic expectations, too.
While you may be given a recipe, you still have to do all the hard work to cook up the dish the way it’s supposed to taste.
As a franchisee you have to use plenty of initiative, keep track of your books, and develop a good reputation in the community as a business owner. In other words, all the usual ingredients of success still apply.
So before deciding on a franchise, you need the right mindset. You need to be interested in the line of work and determined to succeed when obstacles arise.