Open Your Own Independent Business or Buy a Franchise?Published on October 07, 2021
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Opening a business is a major life step. If you’re doing it right, it requires a great deal of thought before you can move forward with it. From the outset, you’ll have some obvious questions you’ll need to ask yourself before you can start formulating your own strategy to begin your venture.
Some of the easier questions entrepreneurs have during the initial stages of opening their business may seem obvious—Which industry do you want to start your business in? Where do you want to locate your business? How much money is it going to take to get your business off the ground?
But there’s one question you may not have considered, and as it pertains to all of the above could play a major role in your future successes—Do you want to start from scratch with an independent business or buy a franchise?
Making a decision between the business options isn’t going to be easy, and you won’t be able to make the choice based on any one specific thing. You can find success no matter what type of business you open. Entrepreneurs thrive opening independent businesses just as often as franchise owners do.
In order to decide, you need to carefully evaluate all the pros and cons of each business type. Look over the key differences, and talk it out with your friends, family and trusted advisors to figure out which one best fits your personal and business goals. Of course, before you can make that decision, you need to know your options.
An independent business is exactly what it sounds like—a business that operates independently from other companies or outside parties. These are often small, local privately owned businesses, and can be sole proprietorships or partnerships.
Running an independent business means everything’s up to you. You have the freedom to run things how you see fit. But in many cases that freedom comes at a cost. The learning curve is much steeper when you’re running your own independent business and there are additional stresses to consider including time commitment requirements, stress, and the undesirable tasks that will be left to you to complete.
If you want to open your own business, but are turned off by some of the disadvantages of being independent, you should definitely consider a franchise instead. By buying a franchise, you are entering into an existing, successful business model to run as your own. Many of these franchises have a proven track record, a strong training program and ongoing support, which conveniently offsets some of the more noticeable drawbacks to running an independent business.
Unlike independent businesses, franchises do come with guidelines that you must follow, meaning decisions on how to run the business aren’t entirely yours. For most, this tends to actually decrease your stress, but for those looking to open a business completely independent of outside control or assistance, it can be frustrating.
Franchises can also be costlier to open, due to an initial franchise fee than can range from thousands of dollars to hundreds of thousands of dollars and a set minimum investment amount. You will also be paying an ongoing royalty fee for use of the franchisor’s system. Still, even with these expenses, the old adage holds true—you get what you pay for.
The final decision as to what type of business you want to open requires a lot of thought and due diligence. Look at what works for you, what disadvantages you can live with and work around, and which play to your strengths. You have time to make the decision as well, but once you make it, go ahead full steam and don’t look back.
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