Those interested in pursuing business might hesitate about buying a franchise. Why invest in a franchise when you can just start your own company and copy another big business’s efforts? While that notion might seem business savvy, adopting a franchise instead of launching or investing in a start-up might be a better idea in this tough economy. So if you are considering becoming a business owner but are wrestling with the idea of purchasing a franchise, here’s why you should think again.
Security and support
One of the primary benefits of buying a franchise over a small company is the financial security it brings. Attracting investments is a common difficulty when starting a business, but working with a franchise can help you avoid those pitfalls. A prospective entrepreneur has to navigate a labyrinth of obstacles when trying to secure finances from investors and banks. Strict requirements and risk mitigation measures from creditors make receiving funds for your business tricky.
However, with a franchise those hurdles are significantly reduced. As opposed to an untested business plan, the franchisor’s background and reputation will better persuade banks and investors to offer loans on less stringent conditions. And compared to starting your own business, buying a franchise could actually cost less.
Additionally, with a franchise opportunity, business experience isn’t a must. New entrepreneurs often run into the issue of not having enough management experience and business knowledge to be successful in the business world. But franchisees benefit from franchisors’s experience and operational support. Franchisors want you to succeed so they have a dedicated support system in place to offer you advice, assistance in opening stores, and training to help you feel confident in the industry and understand how to build a great business. Franchisors provide you with the tools and materials needed to run your business and are there when you hit a rough spot or just need someone to bounce off ideas with. As a franchisee, you have the network and support a big business brings, but you can still operate independently like a small business owner.
Speaking of support, franchisors provide national advertising campaigns to help draw in customers. As an independent operation, a good location isn’t enough; customers need to know what you offer. The company will help you devise smart business plans to attract and retain customers, and given that advertising is expensive, this is a huge plus as a franchisee. Staff will often supply franchisees with proven marketing tools and strategies. And the company will typically approve any local marketing materials you create so you know you are getting an expert eye’s review before the materials reach the public.
With what feels like a new start-up forming every five minutes these days, having the backing of an established corporation helps you stand out and appear serious. Franchisors’s recognized brand and identity provide a powerful asset for your business. Franchises have better rates of success than start-ups, and it’s easy to see why. Franchisors usually have survived decades in their industries and are easily identifiable to the masses. As a franchisee, you get to rely on a familiar market image and branding when selling your product. While franchisees get to enjoy this benefit, start-ups have to start their marketing campaigns from scratch, which can take considerable time, effort, and money. Plus, already having that established reputation in place is helpful when securing finances. And franchisees are required to adhere to high quality standards so customer experience remains consistent across the board. Following this system will help attract customers to your individual location because they already know what to expect.