The typical 9-to-5 grind can be a drag sometimes. To break out of the rather unfulfilling work lifestyle, you decided to strike out on your own. Starting a small business is difficult; it’s a major life decision that has some serious repercussions if you don’t do it right. From how much you’re going to invest in it to what kind of business it will be, you need to think of a lot of things to make sure your business plan takes shape and, hopefully, becomes successful.
One of the said factors you need to think about is whether you’d want to start from scratch and build a traditional small business or invest in a more structured and developed franchising strategy. Both options offer a variety of pros and cons to a smart investor. Here’s how they differ.
Traditional Businesses: A DIY Approach
Startups and traditional small businesses begin as an idea. It thrives from the innovative, creative and strategic minds of its creators. Starting a business is a double-edged sword. It can be exciting, seeing as you’re creating something from the ground up. It can also be intimidating, seeing as you’re treading something uncharted in your life. But what this rather do-it-yourself approach can do for you is give you professional freedom and growth. You’re not beholden to anybody; the only way to go is up.
However, there are more risks involved with small businesses and startups. The latter, especially, has a high risk of failure involved when the product or service doesn’t take off quite well. In the span of a year 25% of startups have already failed. Striking out on your own also means that you will feel every repercussion of your mistakes in steering your business to success. Not establishing a proper business model will guide you towards failure.
Franchising: Ready to Serve
Buying into franchises mean that you want a share of an existing, successful and proven business model. As a franchisee, you’re only responsible for your franchise’s operations. This is a highly successful system continuously supported by the franchisors through marketing and other means. There’s also the fact that franchising leads to brand recognition; buying a franchise lets you start on a recognizable, successful, market-friendly brand that rakes in customers easily.
However, getting a franchise is expensive. There’s an initial and ongoing fees you need to pay to the franchisor. There’s also no freedom when it comes to franchising. You’re beholden to the rules of contract between you and the franchisor as they’re only providing you a license to do business under their name.
Which One is Better?
Whether you want to build a private practice or start a healthcare franchise or a food cart or a restaurant, It’s important for you to know all the pros and cons of each kind of business model. Each option has its set of complexities that you need to understand, especially franchising. You need to know how to make each other work to your favor, considering all the preparations involved with starting either a franchise or a traditional business.
It’s good to consider franchising because everything about a franchise has been tried and tested already. On the other hand, if you have the knack for running a business, there’s an opportunity for you to unleash your potential as an entrepreneur. Finding the right business model that fits your agenda and financial goals will lead you to your success.