Becoming a business owner is a life-changing experience. Before you invest, be sure you’ve made the best choices for your unique situation.
Millions of people wake up every day and go off to a corporate job they hate. They work hard, make money for their company, and return home with little to show for it. They may have health benefits and a steady paycheck, but no real sense of purpose.
Find that purpose by being a small business owner. Control your destiny. Think of your years in the corporate world as a training ground. You developed your skills and experience, waiting for the right time to put them to work building a business of your own.
Bottom line, you’ve waited long enough.
There are four main types of businesses you might go from employee to entrepreneur, each with its own pros and cons.
Start a franchise. Franchises offer proven business model for profitability to follow as you start your own business. The franchise agreement is going to provide extensive training, online courses support, and guidance on how to operate your business and be successful. There are retail, small office, light industrial and home based business options.
Buy an existing franchise. There may be an existing franchisee interested in selling their license. You still have the benefits of a franchise business, but you will need to understand the owner's reason for selling and how they are valuing the business. You’ll be limited to locations willing to sell.
Buy an independent resale business. Buying an existing business skips the startup phase, but comes with its own challenges.
Start from scratch. This is arguably the most difficult and time-consuming way to start a business. You have to do everything on your own – establish a product or service, find market fit, write a business plan, etc. Half of all businesses that start from scratch fail in their first year.
Buying a franchise: Reduced risk, lots of support
As a franchisee, you own your business, but have the advantage of a proven business model. There’s a menu of tested products or services, pre-built operating procedures, and ongoing training and support.
It’s like having the winning playbook to follow as you build out your business. Browse hundreds of franchise opportunities in dozens of industries in our marketplace.
Advantages to starting a franchise
Reduced risk - you have the freedom of business ownership but the safety net of a proven business model for cash flows.
Access to financing - lenders prefer financing franchises over private startups because of their higher overall success rate.
Experience - there’s far less trial and error. The franchisor has already figured out how to efficiently deliver their product or service to the customer in the businesses operated.
Management systems - you get training and assistance in human resources, accounting, facilities management, legal compliance, and more.
Purchasing power - as a group, franchises have greater purchasing power than solo businesses.
Brand identity - there may already be brand awareness and a chance potential customers will have already heard of you.
Planning - there’s less guesswork. The franchise provides you with standard operating procedures and can advise you on realistic goals.
Startup assistance - the franchise knows how to launch new locations. Their valuable training program can save you advertising dollars and shorten the time to profitability.
Marketing strategies - you get professionally developed marketing campaigns. Advertising can be expensive; your franchisor will help you spend your marketing dollars effectively.
Disadvantages to starting a franchise
Large upfront initial investment. The franchise is going to provide an investment range from low to high startup costs, including the franchise fee, real estate leasehold improvements, equipment, and additional working capital needed during the ramp-up phase.
Royalty fee - franchising is a partnership and paying royalties is the franchisor’s incentive to make sure you grow a successful business.
Less flexibility - as a franchisee you have to follow the proven business model and abide by the rules of the franchisor. The terms in your licensing agreement are there to protect the brand and maintain consistency across all of the franchise operators.
For millions of people, a franchise provides them with an opportunity to own and operate a proven-profitable business model that gives them the freedom they’ve always dreamed of. It’s the least risky way to start a business, and there is access to financing to help you build something that’s truly yours.
Buying an existing business: Blazing your own trail
Buying a franchise “resale” means buying an existing franchise license from the current franchisee. You have the same safety net you would have if you were starting the franchise new; corporate is going to train the new owner and the location is already established.
Go into this with your eyes open. There’s a reason the current owner is selling. Understand that reason, the historical performance and reputation of the location and how the seller valued the business assets.
You might also consider buying an existing non-franchised business. In this case, you don’t have that corporate safety net to rely on, but like buying a franchise resale, you can jump into the driver’s seat of a vehicle that’s already moving.
Whether you are looking at a resale franchise or non-franchise business, the risks are similar.
Advantages to buying a business resale
The business already has a location, equipment, and inventory.
There may be an existing customer base, though there is no guarantee customers will transition to a new owner.
There is an existing workforce. Before making the purchase, you will want to know if employee training is up to date and if there have been any staffing challenges.
You can draw from historical data when applying for financing.
The business already has a presence and reputation in the marketplace.
Disadvantages to buying a business resale
A successful business that is turning a profit typically costs more than starting a franchise.
There may be a mismatch between what sellers and buyers think the business is worth.
You might inherit deadbeat staff or employees resistant to changes you want to make.
The business may have outstanding debt.
If the business has a bad reputation in the market, that can be very difficult to overcome.
Successful, profitable businesses are usually sold through inside deals. The best businesses for sale are never listed.
The biggest challenge to buying a highly profitable established business is they tend to sell very quickly. The businesses you see listed for sale are often problematic or overpriced.
Your best chance at these opportunities is working with a business broker. They can alert you to opportunities before they are listed.
The ‘best business’ depends on you
There is no “one-size-fits-all” best business model. The best business for you depends on your goals, passions, experience, capital to invest, willingness to take on risk, and much more.
If you dream of being your own boss, you don’t need to figure this out alone. Schedule a 15 min call free consultation and we’ll help you find the right business that brings your dream to life.
Compare franchises, get tips and advice, and see listings right in your inbox.
Get our newsletter with the latest franchises and news from the industry. You are only one step away from joining the most successful franchises in your area.
