Starting a new business is never easy, but it can be worthwhile. Whether you want to turn a long-held passion into a commercial venture or you’re branching out into an entirely new industry, taking your first steps into entrepreneurship can be as exciting as it is daunting. Going it alone isn’t the only option, though. Franchising is an increasingly attractive option for entrepreneurs looking to start a new venture with certain assurances.
Businesses involved in franchising generate $2.3 trillion of economic activity and employ 21 million people, making it a model that has clearly demonstrated its influence and worth.
Franchising is a beneficial business model for would-be business owners. The combination of freedom and security with the incredible variety of industries available makes it the perfect go-to for your first business venture.
6 Reasons Why Franchising is Best for Budding Entrepreneurs
1. You Can Call the Shots While Benefiting from a Helpful Support System
The ability to make our own decisions and take charge of our destiny is what drives many of us to start our own businesses.
However, with that independence comes necessary uncertainty. With the franchise system, you have the security of a larger brand that, while respecting your independence, is invested in your success.
Your franchisor will be able to chime in with useful tips and support along the way to make sure your venture prospers.
2. Name Recognition Will Work in Your Favour
When getting a business off the ground, it can be hard to attract new customers. Without a proven track record and reputation, expanding your customer base can be difficult.
A benefit of joining a franchise network is that with the bigger business behind you comes an established brand — and, therefore, customer base.
Whether you start a franchise in coffee, cleaning or anything else, the brand will be known in the industry. With the brand name will come familiarity with your products or service, which, from the customer’s’ point of view, makes becoming a patron of your business less of a risk. Think of it as word of mouth, only on steroids.
3. You Don’t Have to Worry about Standing Out
Often, new businesses can find themselves floundering in a very competitive landscape. When trying to launch a new business, the worry that long-established players operating in the same industry could drown you out is a real concern.
Being part of a franchise means you are an established player already, which means you’re more likely to succeed with the buttress of your brand’s history and resources.
You will be able to focus on growing your new venture without having to constantly worry about how to keep yourself above the crowd; your brand’s wider strategy will ensure that all franchises can adapt to the relevant industry landscape if it happens to change.
4. Franchising Will Give You a Lower Financial Liability Than a Standalone Business
A lower financial burden is definitely one of the major benefits of starting a franchise compared to starting a standalone venture.
All franchises require a franchise fee, which is your investment into the business, and with it comes certain assurances. Your franchisor will assist you with marketing and promotion, and may, in some cases, even secure premises for you.
You could be given a budget for training, and all the necessary equipment you need could be covered too. With less of your own money on the line to keep the business going, you can have a lower financial burden — but, crucially, one that doesn’t limit your long-term growth.
5. You Can Choose Your Own Working Hours While Benefiting from a Network
When running a franchise, one thing that you have in common with owners of standalone businesses is control over working hours.
In both cases, this might depend on what industry you’re in: a café operator, for example — franchise or not — will have to stick with the standard hours expected of customers.
However, your own working hours will be more under your own control. As a franchise owner, and with help and support from your franchise partner, you will be able to hire employees to work for you. You can decide how hands on you will be in the day-to-day running of the enterprise.
It’s likely that a lot of your work will be done behind the scenes, and you can choose when and how to devote your time to this. While this work can often seem solitary, having a number of employees, as well as a franchise partner, will provide you with a helpful network of support while allowing you to stay in control.
6. Franchises Are Less Likely to Fail Than Start-Ups
It has been shown that start-ups have a much higher rate of failure than franchises. A whopping 90% of start-ups fail, while the failure rate for franchises is often reported to be much lower.
Some studies suggest a 90% success rate for franchised units. Some of the factors we have mentioned undoubtedly lead to a higher success rate, such as support, both financial and administrative, and an assurance that the brand’s reputation could help your new venture get off the ground and attract customers.
You may need to seek out finance to make your franchise dreams a reality, but franchise finance is often easier to obtain than a business loan for an untested start-up business, as there is the reassurance of a track record of similar enterprises and the underlying larger franchisor, which gives lenders a sense of security.
Running a franchise has multiple benefits. If you’re looking to become your own boss but want the backing of a proven business model, a franchise may be the right choice for you.
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Author Bio: James Fell is Online Business Editor at Aceville Publications, overseeing digital projects for What Franchise and Global Franchise. He’s passionate about writing about business and the future of franchising.