You want to start your own business and be your own boss. But how should you go about it?
Should you launch your own business from scratch, buy an existing company or purchase a franchise opportunity? Here is a closer look at each option to help you decide.
Do you already have a business idea that you’re passionate about? Perhaps you have a plan for doing something in a way it’s never been done before, “disrupting” an industry or bringing a new invention to market. Maybe you don’t like being told what to do, and want to handle every aspect of your new business your way.
If so, starting your business from scratch is likely the best way to go. If your business is truly groundbreaking, you probably can’t find an existing business or franchise opportunity exactly like the one you envision. If you don’t like following rules, you’ll chafe at the restrictions of franchising even if you do find an opportunity similar to your idea. And if you enjoy building things from the ground up, you probably won’t want to deal with someone else’s existing business.
Starting from scratch is also a good option if you’re on a limited budget. You can shape your new business to fit your available capital, such as by operating from home or part-time, as opposed to meeting the financial requirements of buying a franchise or a going business.
Buying a Business
Perhaps you want to be your own boss, but don’t relish all the groundwork involved in getting a new business off the ground. You’d rather step right into the leadership role, taking charge of a business that’s already thriving. Or maybe you know you could excel at turning around a struggling business or expanding a smaller company into a big name. If this is you, buying an existing business could be just the ticket.
When you buy an existing business, you take over all its assets and operations. You can even keep the same employees in place if you (and they) prefer. You can buy a floundering business whose owner wants to get out, or a thriving business whose owner is simply ready for a life change.
Keep in mind, when you buy an existing business, you’ll have to manage a transitional period and convince employees, partners and customers that you can run the business as well as (or better than) the previous owner. There are likely to be personnel challenges, as you may need to replace some (or all) employees.
Last, but not least, buying an existing business can be very expensive. However, if you have the necessary capital and do your due diligence beforehand, buying a business could be your ideal solution.
Buying a Franchise Opportunity
Buying a franchise can offer the ideal middle ground between starting from scratch and buying an existing business. When you buy a franchise opportunity, you are buying a license to use a parent company’s trademarks, systems and way of doing business. In most cases, you also receive training and ongoing support from your parent company (the franchisor). In return, you pay a franchise fee to launch your location, as well as ongoing fees and royalties. Buying a franchise can cost as little as $10,000 and as much as several million dollars, making this method suited for a vast range of budgets.
As a franchisor, you’ll be growing your new franchise from the ground up, but the franchisor will help with everything from choosing a location to buying inventory and training employees. This is helpful if you lack experience in one or more areas of running a business.
However, you’ll also need to follow the systems and processes the franchisor has put in place to deliver a uniform customer experience. This rubs some independent-minded entrepreneurs the wrong way.
Finally, buying a franchise can be a good option if you know you want to own your own business, but aren’t sure what kind. Perusing the vast world of available franchise opportunities, you’re sure to find at least one that fits your skills, interests and experience.