Entering into the business world can be a risky venture, as a majority of small businesses don’t make it through the first year. A safer option is to buy into an existing franchise. Franchises have many benefits to a person who is dipping their toes into owning a business for the first time. With today’s economic climate, more and more people are opting for a franchise rather than going out on a limb and starting their own.
What is a Franchise?
A franchise is a commercial relationship between the owner of a trademark or brand name and an individual or organization. The individual uses the established identification to start a business. The franchisor will then offer a business model and ongoing support to the business in operational and financial sectors. A franchisee will generally sell or distribute goods and services supplied by the franchisor.
The franchise gives you the benefits and freedom of a small business but you have all the benefits of being supported by a big business. For starters, when you buy into a franchise you are buying into an established brand or business which makes you instantly recognizable to people. You also have the added benefit of the company’s advertising and promotion.
Franchises also have successful business models that have been proven to work. So, you don’t necessarily need a great deal of experience to enter into the foray of a franchise. Everything is already laid out from supply to output. The franchisee will go through all the necessary details and methods that you need to be successful.
The start-up time for a franchise is usually far quicker because the franchisor will help you get established and even find the perfect location for your business and then you get the added benefit of ongoing training and support.
As a franchisee, you will also receive the benefit of the buying power of a big company, so your stock will be a lot cheaper and your profit margin considerably higher.
You also get the added bonus of benefitting from their national and regional advertising and promotional campaign. Advertising and promotions can be a costly and time-consuming endeavour and will add to the stress of starting up your business. Buying a franchise takes away some of the stress of small business ownership.
When you join a franchise, you are joining with hundreds of other people who have been in your position of starting a business. Usually, a franchise will have an intranet for the franchisees to exchange ideas and tips on making your franchise a successful one. Information and life experience are really valuable when it comes to starting your business and having a network with solid experience can be the difference between success and failure. So utilise this network and never be afraid to ask for help.
Another reason why franchising is so popular is its ability for rapid growth. Your business can hit the ground running and making a profit as soon as the doors open. From day dot you have the ability to compete with bigger, more established business. This rapid growth means that your business can become quickly profitable, in turn you will be able to sell it for a higher price – if that’s the route you want to go. Some people start a franchise, build it up and sell it for a profit.
Franchises are a low-risk entry into the business world. A lot of the responsibility is taken off your shoulders and is on the franchisors, such as financial and operations management, which is a real release of burden and stress for those new to the business world. That being said, it’s important that you know your franchisee rights before starting up.
Franchises have become so popular due to their proven business model and their ability to make a profit and expand at a rapid rate. So, if you’re thinking of dipping your toes into the proverbial business shark tank, take a look at buying into a franchise – to alleviate the stress of small business ownership.