Do you know what kind of business suits you best?
Deciding to buy a small business is a major investment step. Choosing the right type of business is integral to the kind of success you will have. There are two broad categories of businesses you can consider: a franchise or an independent!
Both have merit. To determine which is right for you, look for the opportunity that best suits your personality, your skills, and your financial objectives.
The choice between an independent business and a franchise business is not clear-cut. At the core, both are businesses. There are pros and cons to each broad category, and within each category, there are a vast number of very different and very successful (and not so successful) industries and options.
There are five areas to consider when narrowing the field:
1. Ownership Model
Each offers a different degree to the new owner to make decisions, effect change, and decide on which path to take to success. The products and services you offer, your method of delivering these to your customer, the way you even find customers. A franchise business comes with the security and stability of using products and market models that have already been tested in the market.
2. Cost
Compared to a franchise business, independent businesses often times come with higher upfront and operational costs. On the other hand, they also come with control over investment decisions. One can undertake decisions like remodeling, downsizing, and expansion depending on their budgets. Franchises, on the other hand, have lower investment costs but one has to pay royalties as part of the system wide resources.
3. Brand Recognition
A franchise business has the advantage of having a far more recognizable brand compared to an independent business. The independent business owner has to spend a lot growing the company brand and even then it will take some consistent work to get the recognition level of a franchise.
4. Operational resources
Franchisees enjoy great operational support from the franchisor in terms of training, marketing & sales, supply management and even human resources. This makes them more suited for first-time business owners without any experience even though experienced business people also buy them. Independent business requires one to go it alone though it comes with complete control.
5. Success Rate
The trick is finding a model that matches your lifestyle, personality, and capacity. You have to do your research considering many factors. Ultimately, it may all come down to whether you prefer to be in business for yourself or be in business for yourself but not by yourself.