Entrepreneurship is a lifestyle change that requires plenty of research and consideration. Owning a business, whether a franchise or an independent business, will allow you the freedom to step outside the typical nine-to-five life. However, some differences between them might help you decide which is a better fit for you.
Advantages of Buying an Independent Business
Buying an independent business allows you to acquire a solid foundation and decide how to make it your own going forward. With it, you gain its financial history, established cash flow, customer base, and trained employees. You might also acquire its brand, internet presence, and other goodwill assets – all of which allow you the flexibility to make strategic decisions going forward.
Autonomy vs Responsibility Over Business Strategy
As a small business owner, you’ll have full autonomy over your business and therefore your life. If you have time restraints, specific duties outside of work, or other passions you’d like to follow, buying an existing business will free you to do that. Furthermore, there is creative autonomy to be gained. Try out different marketing campaigns, take the business is an entirely new direction, or dedicate yourself to learning new things every single day – nothing is stopping you, you’re the boss!
Tailored Funding Options for You
With great power, comes great responsibility. There is a lot to do when owning and operating a business, and it will all come down to you. Whether you own an independent business or franchise, you still have to hire and manage employees. Yet, independent business owners have to make strategic decisions and take risks. It will be important to develop a vision as you move forward.
Potential Start-up Costs vs Offering New Services or Products to Increase Profits
Owning an independent business will allow you to define and create new pathways for revenue. You won’t be constrained by a corporation’s guidelines, allowing you to conduct your own market research and expand the business as you see fit. Offering new products and services or altering your current products and services: it’s all within your power!
However, as the new owner of an independent business, you’ll be contributing more than just your time and energy; building a business will require money as well. By analyzing the needs of your business, you can decide whether the money will go towards buying newer equipment, updating infrastructure, or maintaining marketing promotions. Prospective business owners can take out loans, gather a group of venture capitalists to invest, or use their own money.
Advantages and Disadvantages of Buying a Franchise
Franchises are, at their core, about building relationships. Cultivating relationships with customers that are all over the world, and fostering growth as the franchisee and franchisor work together, will help grow connections and business. Expect to be supported through the process of researching, buying, and training – all while learning to manage your business. If you don’t mind coloring inside the lines and enjoy the reassurance of safety nets, then buying a franchise might be a good decision for you.
Working Within an Existing Business Plan vs Not Having Much Room to Maneuver
Brand recognition is almost instantaneous. You’ll have to do very little work towards establishing your presence in the community as franchises are already well-recognized. Franchises have existing business plans that are market tested and altered to be successful in all locations. While buying a franchise can still be risky, the amount of risk is greatly reduced due to the time and energy the corporation has spent researching and building a business plan. Along with providing a business plan, the company will likely provide financial help, additional training, and other support systems to help you through the path of entrepreneurship.
On the other hand, you aren’t left with a lot of room to alter the direction of your franchise, should you have new ideas. While you can propose different plans if the corporation you choose has appropriate communications set up, change will likely be slow to take place. The lack of creative control may be a deal-breaker for some, while for others, it can be a stress reliever.
Marketing Material and Other Material Provided vs Less Stressful Decision Making
One of the biggest advantages of buying a franchise will be the type of support you receive from corporate. Through the process, there will be people to answer your questions and address your frustrations. There will be less stressful decision making, and when there are difficult decisions to be made, you’ll have market research and other resources at your fingertips.
That being said, you won’t have a lot of leeway as it relates to your own creative ideas regarding your business. Marketing plans will be handed down, advertisements decided by teams at the corporate level. You’ll be following an outline, and while many things are up to you, many things aren’t.
What’s right for you?
Deciding what to buy is just as much about researching the pros and cons of each type of business as it is about matching those characteristics with your own skills and lifestyle. Be sure to thoroughly research the operations of businesses and franchises, along with the specific stores for sale.
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