It’s that time of year again! As we say goodbye to 2015 and welcome in 2016, many of us are making our list of New Year’s resolutions. If you’re an entrepreneur at heart, perhaps 2016 is the year you’re ready to step out on your own. In addition to those health and wellness goals and financial ambitions, add exploring business ownership options to your list.
If you aren’t sure where to start, consider that there are three options for going into business for yourself. You can start a business from scratch, purchase an existing business or invest in a franchise. Each can lead to long and rewarding opportunities depending on what fits best with what you’re looking for.
In the following post, we’ll take a look at the advantages and disadvantages of each option to help you kick off your New Year’s Resolution research to a good start.
Is 2016 the year you plan to bring your brilliant idea to market? Then starting a business from scratch may be piquing your interests.
- It’s your business, so you get to make all of the decisions.
- There is room for tons of creativity.
- Most likely, it was a passion for the product or service that you’re bringing to market and that will show through in your business.
- Since you’re building the business from the bottom up, you’ll have to create all of the systems and procedures needed to run the business.
- There are limited financial options.
- There is a higher failure rate associated with this type of business ownership.
Maybe you’ve been eyeballing that flower shop down the street, and it’s finally for sale. Then this year may be your year to buy an existing business. If so, here are a few pros and cons to consider with this type of business ownership:
- There is a history of actual financial results so you have a pretty good idea of what you’re getting into.
- It’s an established business with an existing customer base, which can make for a smooth transition and built-in cash flow.
- The business systems have already been established so you can focus your time and attention on other areas of the business.
- The business already has a reputation. Make sure it’s a good one or be prepared to spend some time mending and building up the image.
- Review whether or not there may be some hidden seller motives that initiated the sale in the first place.
- Potential issues with current staff could require additional training and support.
Your third business ownership option is franchise ownership. With over 3,100 different franchise concepts in more than 80 industries, it’s likely you’ll be able to find one that speaks to your interests and goals. Here are a few advantages and disadvantages to consider:
- A franchise is a proven business system with established name recognition.
- Receive ongoing training and support from the franchisor.
- Although you are a small business owner, you are also part of a larger network that can provide marketing expertise and purchasing power.
- You must pay a franchise fee and ongoing royalties.
- There are systems and procedures in place that you must follow.
- Franchisors do have territory restrictions, so be sure to review what territories are available to you.
If you’re interested in exploring business ownership this year, add to your resolutions to contact your local FranNet consultant. Our consultants can help you learn more about business ownership and their expertise is at no cost to you. Make 2016 great, and have a happy New Year!