When people think about owning their own small business, they tend to picture building it from the ground up: starting in their home office with just a desk and a dream, and slowly expanding and making a name for themselves over time.
While this can be very rewarding if you’re successful, there’s another way to go about it that has significant advantages. Instead of building your own business, you could invest in a franchise, which is a license to sell products or open a store in the name of a larger, already established company or brand.
But the question is: Why would you want to buy into a franchise instead of starting your own business from scratch?
Here are three reasons why franchise ownership is a smarter way to go.
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Profits Can Be Achieved Faster with Franchise Ownership
When you start a business from scratch, it takes an enormous amount of work to get everything set up – from creating a business plan and obtaining financing to choosing a name and building a website.
Then, you have to figure out which marketing techniques are going to work best and how the operations will run the most profitably. Many times, these efforts are trial and error, and all these processes take an enormous amount of time to develop. Sometimes, this learning curve can drag out for years and take so long that the business runs out of cash and must close.
With franchise ownership, most of these action items are already figured out which allows you to hit the road running. Franchisors test various processes and systems until they establish a profitable model. Then, all you have to do is follow their systems to achieve success.
While there is still some experimentation at the franchise ownership level to see what works best in your location, the large portion of work that is already done allows the franchisee to achieve higher profits much faster.
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You Are Not Alone in Franchise Ownership
With traditional entrepreneurship, many business owners find themselves in a lonely place, with no one to serve as a sounding board and provide advice as they struggle to learn the ropes.
They also have to find training solutions that fit their needs – or forgo training altogether due to the cost. Oftentimes, these training programs are costly and not the exact solution the business owner needs.
On the other hand, most franchisors provide support and have developed training programs to help the new owners learn the exact systems that will allow them to succeed.
In addition to providing training, franchisors can offer guidance and trouble shoot problems. On top of that, new franchisors have instant access to other franchise owners who have already tackled similar problems and can offer advice from an ownership perspective.
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It’s Easier to Obtain Financing
If you’re buying a franchise, it can be easier to obtain financing than if you’re starting a business from scratch. Why? The bankers believe that your chances of success are better, which makes you less of a risk. They know that the systems and training franchises have in place will help you succeed.
For those same reasons, there’s also a higher chance of getting a larger loan than what you could get starting a traditional business.
These are just three reasons why franchise ownership is a better deal, but there are many more. If you’d like to learn more reasons and get the ins and outs of franchise ownership, join us for one of our free webinars by clicking here, or sign up for a free consultation with one of our local franchise consultants. Just click “Get Started” at the top right side of this page.