Perhaps you are thinking about starting your own business, but you don’t really know where to start. Buying a franchise might be the perfect opportunity to launch your entrepreneurial career with more support than you would receive otherwise.
Before we go into some of the reasons a franchise makes a great first business, let’s talk about what a franchise actually is. Any time you see a familiar national or local chain, like McDonalds, Ace Hardware, UPS, or even Digital Doc, there is a good chance that it is a franchise. An individual entrepreneur will buy into the franchise of their choice, then they must pay a royalty fee out of their sales to the corporation that owns the brand. Anything left over, the franchise owner keeps.
There are several powerful reasons owning a franchise is a good move, especially when you’re considering it as a first business:
1.) Lower Investment Costs
It takes money to start a business. If you decide to be an independent business owner, all the upfront costs are on you. That includes everything from building costs, to marketing, to product development. The risk is 100% on you. But, when you decide to start with a franchise, you’ll generally have a lower upfront investment. Some companies even offer in-house lending or financial aid to help you get started.
2.) A Support System
When you open a franchise, you get a built-in support system meant to help you succeed. Some franchises offer more support than others, so it’s something you should look into before buying in. The franchisor, meaning the corporation in charge, can offer strategic planning and provide assistance with everything from marketing to technology to training.
3.) Work for Yourself (Almost)
A nice perk when you decide to own a franchise as your first business is the ability to work (mostly) for yourself. You will of course be held responsible for your franchise by the franchisor, so you won’t have complete autonomy. However, within your location you get to make the decisions, set schedules, and generally run the show. As long as you understand that you’ve been given a formula to follow, you get to enjoy being the boss right off the bat.
4.) Hard Work and Hands On
There is an idea out there that when you buy a franchise you are essentially buying a “business in a box.” That’s not the case. Those businesses cover some of the support you receive and the built-in systems that come with franchising, but it isn’t as if you will just sit back and let the business run itself. You have the opportunity to really shape your business. You’ll have to be motivated to tackle issues and figure out how to make your investment pay off, but if you’re willing to start your own business, the prospect of hard work most likely won’t scare you off.
5.) Training Programs
Some of the best benefits of buying a franchise involve the training programs available. No one is going to expect you to know how to run your franchise right off the bat, so most companies that offer franchising provide programs designed to get you up to speed on the best ways to run the business. You’ll also be provided with reference materials and resources to handle issues as they come up.
6.) Marketing help
Having a built-in, recognizable brand is a powerful incentive when starting a business, especially if it is your first business and marketing isn’t your strong suit yet. Franchisors already have crafted the marketing plan, and often have already set aside a budget for national marketing. If you are joining a smaller corporation, you may be given guidelines on running a marketing campaign, or be asked to only worry about supplementary marketing efforts locally.
7.) A Proven Track Record
Starting a franchise helps to eliminate some of the uncertainty and errors you might make otherwise. You’re adopting a proven system – a whole way of doing business that has already been proven to work in other locations. You’re buying into the computer programs and efficiency that the company has already tested. Rather than wasting time and money testing various systems and workflows, you are provided with everything the company already has in place.
8.) Room for Growth
If you’re an entrepreneur, you probably aren’t content to sit back and do nothing once you’ve started your business. After running a franchise, you’ll have a solid foundation to build on. Not only will you have built equity and diversified your assets, but you’ll have learned a solid foundation of skills running a low-risk business. Whether you are looking to expand and add more franchise locations to your portfolio, or you are setting yourself up for a big sale, you’ll see a good return on investment.
It’s easy to see how buying into a turnkey solution makes sense as you consider starting your own business. Along with the built-in brand recognition, you have support to lessen the overall risk. Make no mistake, you will still have to do your due diligence, but if do, you stand a good chance of running a successful business.