Owning a Small Business Vs. Owning a Franchise

If you’re not one for taking risks, the biggest advantage of partnering with a franchise is that it has a higher likelihood of success. A franchise is a proven business model that has been tried, tested, and refined over time. Essentially, you are purchasing a defined road that will allow you to navigate the business world with ease and security. 

 

For small businesses this is not always the case. It will take a lot more time and resources to get your business up and running. Let’s face it…it is impossible to compete with a franchisor who has done this hundreds of times before. However, with pain comes great reward. Whilst franchise models will have several restrictions, you will be starting a brand-new business that nobody has ever seen before, and every choice will be yours. 

 

The only question is…how do you gain customers? 

 

Figures show that half of all new independent businesses fail within their first 2 years; during that same timeframe, 90% of new franchise businesses become profitable. You must ask yourself, what do you value more…stability and financial security, or creative freedom?. 

Understandably, buying a successful business comes with a cost. Franchise start-up costs can vary hugely depending on the size, type, and location but the average cost to purchase a franchise business is £42,200. This is a significant investment that you need to be prepared to pay. On the contrary, when you start a small business how much money you invest will be up to you; you will be able to go at your own pace and spend as you see fit. However, you will accrue greater costs in the long run due to the minimum cost of production and the time it will take for you to build a strong customer base. 

 

Due to high success rates of franchise businesses, lenders are far more likely to provide the finances you need for your franchise investment than a small business which can significantly reduce the amount of capital required for you to get started. Naturally, this simplifies life significantly as both the costs and risks are managed by the franchise model. 

Fancy going it alone? Or would you still rather have a friendly team behind you to provide you with a little bit of comfort? Buying a franchise business means you will be given training and resources as well as access to an expert team who you can turn to for help. Your franchisor is also likely to take care of a lot of the background operations of your business. Additionally, you will also benefit from the other franchisees within the network who can provide you with a wealth of knowledge and moral support by sharing their experiences. 

 

Whilst some say this gives you the best of both worlds, it is not the complete autonomy that running a small business will provide you with. When running a small business, you will have nobody to answer to and will have the flexibility to decide practically everything. The future of the business will be on your hands whether or not your business thrives. It’s an immense responsibility! 

 

Quite simply, starting a small business involves greater risk but greater freedom. If you’re not keen on the idea of only relying solely upon yourself or risking your finances, it’s worth doing your research to see if partnering with a franchise could just be the solution you’ve been searching for.