Are you thinking of investing in or buying a franchise? Let’s look at buying a franchise pros and cons in this post, as you all know owning a franchise can be very lucrative or, maybe not!
More and more people at the moment are moving into entrepreneurship and working for themselves, rather than working eight hours each day in an office for somebody else trading time for money. We are all conditioned to get an education, find a job, and make your boss rich.
Well, it’s about time you thought about your financial future and started working for your own financial destiny.
There are many options available today for the new entrepreneur. If you have a good investment set aside, you may consider franchising. It is always better to go this route as your success potential is far greater than if you had to start a business from scratch. The reason for this is that you are buying into a proven business model which has already shown how successful it is. You would be getting the recipe for the same success if you bought into it ideally.
You would obviously need a large amount of money for this as most good franchises don’t come cheap. You would probably only start to see your profits after a couple of years, once all your start-up costs are paid off, but if you are in this for the long term, in most cases it will pay off handsomely for you providing you have chosen the right business venture for you.
Make sure you do your homework before buying into any franchise.
Research can be carried out with ease these days, thanks to the power of the internet. Check out other franchises in the same model you are interested in. Contact the owners and see if they are happy with the franchise that they have purchased and if they are doing well.
Also, make sure that the franchise that you purchase is going to work in the area you want to do business from. You won’t have any success selling ice cream in Iceland for example.
The smart entrepreneur, who has the funds at his disposal, will normally choose to franchise, as it will require less work to get up and running. An established business undertaking is less expensive and less risky. But before you make a final decision, you must be able to weigh all the advantages as well as disadvantages. This is an essential part of choosing the best business for you.
Buying A Franchise Pros And Cons
As with anything there are pros and cons and buying a franchise is no exception to the rule.
Buying A Franchise Pros:
- You get to skip the startup stage which includes writing a business plan, conducting market research, and creating your product as the franchise has already set it all up, tested the products, and proven them to work.
- You get the experience of the franchise behind you, limiting mistakes and thus there is more probability of making a success out of your business.
- All you have to do is apply the system and set it up in your market.
- Instant name recognition. Most times when starting up, you will need to do a lot of marketing before people recognize your brand. With a franchise, all this won’t need to be done, as the name is already well known. You will save a fortune on advertising and marketing related costs.
- You normally get full training on how to implement the system.
- You will normally have access to stock at reduced rates as the Franchise normally buys in bulk for all the Franchisees.
- If you need financial support, banks will give loans a lot easier if you are going into a proven business rather than starting something new.
- You can interview existing franchises on their experiences and see if they are happy with their businesses and if they are doing well financially.
Buying A Franchise Cons:
- You are not going to be your own boss, as you need to follow all the rules and regulations of the Franchise when you operate. If you hate complying with rules, a franchise might not be for you.
- There is normally a high start-up cost.
- There will also be royalty fees and other marketing-related costs you may need to pay each month.
- If there is any bad publicity, even if it is at a national level, your business will be affected in some way or another.
- Read your paperwork properly, because if you break any of the rules set out you could be put out of business.
- If you live in a large metropolitan city you may have competition from other Franchises in close proximity to your own. Make sure when you sign that no other Franchise can operate within a certain radius from yourself, or you could put each other out of business.
The decision to buy into a franchise comes with many of the same considerations as starting any other business. You will need a passion for the business at hand, so don’t buy a restaurant if you hate cooking or working long hours.
You will also need to look at hiring a team and getting tools to help you stay organized, as well as have enough financing.
But the specifics of what makes franchising a good and bad move is what makes your choice that much more exciting.
Decide if you can live with the cons and take full advantage of the pros before you decide to buy a franchise.
What If I Can’t Afford A Franchise?
If you can’t get your loan or getting a franchise is just out of reach for you at the moment, there are luckily cheaper methods to go about owning your own business.
Why not build a business from the ground up online for a fraction of the cost of what you would have to pay for an offline business.
Just think, no salaries, no rent and very low start-up costs, do it in your own time, and in a few years, you could have a highly successful online business and work in your own time from the comfort of your home.
Many people worldwide are doing this for themselves now and enjoying the freedom that comes with it. So why not you too?
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