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.
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 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.
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.
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.