Why Buying a Franchise Is Better Than Starting Your Own Business
Mar 31, 2022 11:38
Starting a business comes with many challenges, explaining why up to 65% of startups fail within the first ten years of their formation, according to the U.S. Bureau of Labor Statistics (BLS). Furthermore, according to the same bureau, about 20% of startups fail within the first two years of their formation. This explains why many people are today resorting to franchises. Buying a franchise has many benefits, including:
The main reason many businesses fail is a lack of capital or having a small capital that can't sustain the business. Starting a business needs a lot of cash. You have to spend on registration, insurance, business premises, and hiring employees. And other overheads. The best way around this is to buy a franchise.
A franchise will allow you to grow without the risk of the cost of equity or debt. The best starting point is to look for low-cost franchises in your industry. With this kind of business arrangement, your franchisor will take care of everything, and you'll get a business that's already running.
One of the worst nightmares entrepreneurs face is competition. There's that constant fear that other entrepreneurs will snatch their concept and beat them. If you have this fear, you aren't alone. If that's the case, buying a franchise can be your best option.
FranchisingFranchising will allow you to capture the market faster before your competitors dominate it. The good thing about it is that your franchisor will do all the dirty work. Your franchisor will not only offer you financial leverage but will also leverage their human resources.
Another challenge most new entrepreneurs face is getting and retaining experienced unit managers. Hiring experienced managers are expensive. Likewise, you'll need to have a solid financial base to train your own managers. This is the problem low cost franchises solve.
With a franchise, you'll be substituting the manager with the owner. The business owner (franchisor) is someone who has invested in the business and is interested in its success. The owner will do all that it takes to ensure you succeed.
Franchises run more efficiently than businesses owned by individuals. This is because of ease of supervision and staffing leverage. Since your parent company will allow you to undertake site selection, local marketing, lease negotiation, accounting, training, hiring, and other HR functions, the franchisor's organization will be much leaner. But, on the other hand, you'll be doing all these in a familiar region (country or city), which allows you to do your best. The result is that the business will be more profitable.
Choosing low-cost franchises reduces your risks tremendously. You'll be in charge of all franchise operations, like hiring employees, purchasing inventory, and everything in the business. In doing all these, your parent company will not leave you alone. You'll get guidance and any form of help you need. All these will work toward ensuring your success.
Franchising is the trend today. Many people have realized it's easier and less risky to buy a franchise than start a business from scratch. If this is appealing, you can take the first step today. If you are low on capital, look for low-cost franchises.
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