A franchise can be a good option for those entrepreneurs who find starting a business particularly complex and above all the uncertainty of whether that idea that is undertaken will be liked in the market, a situation that does not happen in the franchises where its success is proven. On the other hand, starting your own business can be a more attractive option for those who want to have total control over the operations from the first steps.
Before taking a step forward, you should weigh the pros and cons to avoid common mistakes associated with starting a business. Starting your own business or buying a franchise? Here are some tips to help you choose the option that best suits you:
With a franchise, the brand is already established in the market and the level of success and recognition by the market is already known.
When you start your business you risk creating your own brand, as it must be the right one for your new business. It is preferable that you hire a branding expert to advise you and develop the best possible brand, as this element is fundamental to the success of the company.
Teams and suppliers
A franchise comes with an established business model, so there is no need to negotiate with suppliers, create brand image etc. . You will have more support than an individual business owner and will receive things such as training, marketing assistance and general corporate support.
However, while some enjoy the security and ease that this scheme offers, others prefer to be innovative and take their own creativity into their own hands. Therefore, if you are a highly creative person full of different ideas and want to make these ideas a reality, then you should start your business. But you must elaborate a previous business plan that guides me the steps to undertake your idea.
As for the costs of one model or another, we can not say that the franchise or the business itself is cheaper than another, this will depend on the franchise in question and the idea to be undertaken. If it is vital to get the numbers right, compare them and see the pros and cons of one model or another. It must be taken into account that not all franchises are the same. So the franchiser, in addition to the initial investment, has to make a series of payments, such as
Membership fee: usually a single payment for the transfer of the brand and know-how.
Royaltie: Periodic payment either monthly or annually for the service provided by the franchiser (creator and owner of the brand) and for the advice he gives. These royalties are usually a percentage of the turnover and not all the franchised ideas require it.
Fee for advertising or marketing: it is usual to pay a percentage on sales or a fixed fee, destined to cover the advertising and promotion campaigns of the whole group or network of franchises.
By starting your own business you will have more control over all operations and the direction you will take.
In a franchise you will always be subject to the decisions of the franchisor, and therefore, you will have less freedom to decide how much to invest, where to open your business, what equipment to buy and to try out your own ideas.
Starting a business from scratch is a challenge that, in many cases, involves great risk, but the potential is infinite. When you are independent, there are more possibilities to expand and control how much and how to invest. For example, if cash flow is slow, independent entrepreneurs can delay expansion plans or limit the scope of new projects.
A franchise can grow only to a certain extent, however, there is no limit to the growth of your own business, of course, if everything goes well.
As you can see, there is no sure answer about which strategy is the best, this will depend on the business model and your company’s philosophy about what you want to achieve. A careful and thoughtful analysis of your personal goals for establishing a business should help you decide on the type of opportunity that is best for you.
It is true that franchises exist in practically all activities, but that does not mean that the company of your dreams will find the ideal model in one of them. Likewise, what you plan as your own business may be a better fit, with a greater chance of success, in the form of a franchise.
Whatever your choice, if you must have a good business plan, which contemplates a serious strategic plan with the aim of reducing as much as possible uncertainties and avoid improvisations of any kind and that allows you to face different scenarios.