In the days of venture capital, angel funding, and historically low interest rates, securing funding for a start-up is easier than ever. However, there is never a guarantee that you’ll make the money back – and you may be on the hood for recouping investors. That’s why starting a franchise can be the best option for business ownership in 2016. Whether you want to open a UPS store or a local restaurant, consider the pros and cons of starting your own or starting a franchise, and you’ll be able to find the right fit for you.
When it comes to cost, you’ll likely spend less on a franchise than starting your own business from the ground up. You’ll have the support of a major company, who will help you navigate some of the earlier steps of starting a business that tend to slow progress and increase costs.
Success with your business will come from having a steady dose of customers. If you start your own business, you also have to build up your entire customer base, which can drain money with advertising budgets, and can take time – making carrying costs greater than your returns. When you open a franchise, the company will already have name recognition and existing customers, which significantly reduces the time and effort you’ll need to spend.
If you want to start your own business, you either need to find the right partners or be an expert in all things operational and technical. You’ll be the one responsible for those early hires, finding the space, understanding your role in the market, and making sure financial reporting is accurate from day one. With a franchise on the other hand, you gain the benefit of an existing knowledge base in the parent company, and tools and techniques you’ll be able to use to increase your knowledge.