Whether you build your own business from the bottom up or opt to get a franchise, there are a few key differences to consider.
When talking with potential business owners, my late father would always ask them when they wanted to “own what they do.” I usually liked that term.
If that’s what you’re thinking about doing, I’m likely to review two ways you can do it, combined with the pros and cons of each of them.
If you’re entrepreneurial-minded, a natural startup business is a way to go. That’s because you should use 100% of one’s innovative juices 24/7.
In summary, you’re the one who:
- Arises with a business thought
- Puts together the company plan
- Produces associations with lenders
- Tests and perfects your thought
- Produces distribution routes
- Puts together the marketing plan
- Produces plans and techniques
- Hires staff
- Negotiates the professional space
- Starts the company
As you can see, your plate is likely to be full. The hours needed to start your company are likely to be long and hard. Starting your company will be long and hard. But when you believe in your company idea, and you’re prepared to see where your idea will get you, those long hours will be good hours. After all, that is your “baby” we’re speaking about here.
Bright and Dark sides of a Startup
If you’re thinking about starting your own personal business, based on your idea for a needed product or service, there are a few things you need to find out when you dive into the pool.
The Bright Side
- You possess the concept
- You’re the Creative Director
- You retain all the equity
- You are able to run your company as you please
- You will find no rules
- You keep 100% of the gains
The Dark Side
- Your total upfront investment is unpredictable
- There isn’t any idea regarding when you’ll break-even
- You can’t get yourself a good handle on your own expenses initially
- Our risk is large since that you do not know if your idea may continue to function
- You’ll be below incredible stress to produce your company profitable
All in all, as it pertains to a startup, the risks are high, but your potential financial rewards can make the risk worth it.
Franchise businesses are quite popular.
Once you stop to take into account it, the concept that you can open a business up in a quick period of time, using a proven business formula with an upfront cost that’s fully disclosed, is attractive. But as you’ll see, franchising isn’t for everyone.
Bright and Dark sides of Franchising
Over the years, franchising has enabled a huge selection of thousands of visitors to enter business for themselves. There are many reasons why franchising works. Franchise businesses provide:
The Bright Side:
- An established business model
- A small business system that’s been tested and proven to work
- Technology that can help you, as a franchisee, stay efficient and organized
- Marketing programs you may use immediately
- Support from headquarters
- A network of other franchisees as you are able to rapidly contact when you encounter problems
The Dark Side:
On the flip side, just like franchising is, it’s perhaps not perfect.
For instance, as a franchisee:
- You will be expected to follow the business enterprise program and symbolize the manufacturer as given in your operation contract
- You will be spending royalties to your franchisor for the life span of one’s company
- You may have to purchase such things as technology upgrades, re-branding, new store designs and/ the like that your franchisor requires
- You’ll only manage to buy products from approved vendors
- If the national brand experiences negative publicity, your neighborhood business may be affected
Given these points, if you’re contemplating going the franchise route to find yourself in business, you need to ensure you’re comfortable with the restrictions placed on you as a franchisee.
Having said that, I’m likely to answer the question you’ve running throughout your head. That question is: “What’s a much better way to go into business; a startup or even a franchise?” My answer is that both ways could be good.
If you have an idea for a business, and you truly believe in it, you need to seriously look at a startup.
If you would rather leverage someone else’s business idea to possess that which you do, and you’re comfortable with following rules, you need to in