If you’ve considered running your own business, you will have already done some research into how you form the company, handle your accounts and what type of corporation you will become.
You may have already realised that it can be quite a daunting task. Setting up a business means there are lots of legal loopholes to jump through, and of course, you won’t have the protection that being employed gives you.
However, probably one of the most difficult problems to tackle is how you get your work.
It’s OK saying that you’re self employed, but you need to tell people about it and maybe even advertise.
In some industries, this can be fairly easy, everyone knows what a plumber does, and they know why they need one, but what about other industries? Not everything is so clear-cut, and it might seem that to break into some businesses you need some kind of inside knowledge, a “leg-up” if you will.
This is where franchising comes in.
Franchising is not new, in fact, it has roots right back to the 17th century when franchisees were granted the right to sponsor markets or operate ferries, but it really didn’t take off until the 19th century when Coca-Cola became one of the most successful franchising operations in the world.
And of course, everyone knows about McDonald’s.
When Ray Kroc took the McDonald’s brothers’ idea and turned it into a franchise, he changed the world, and people are still joining up to this day.
But it’s not just about hamburgers and sugary drinks, there are franchise opportunities in all sorts of industries, and you’re bound to find one that suits you.
To be fair, on High Streets, many franchises seem to be focused on feeding us. There’s Subway, Papa Johns, and Spud-U-Like to name just three.
And then there are also the business service types of operation such as TaxAssist and Printing.com.
But it doesn’t stop there.
If you’ve always had an interest in property, you could turn your hand to becoming an estate agent. Franchises such as the relatively new Home-xperts.com are growing rapidly as people look to invest their cash into a business that already has a following.
What are the benefits of franchising?
As we’ve already alluded to, starting a business can be difficult, but it’s also very rewarding.
When your invoices are paid at the end of the month, you know that everything you earn (minus tax and expenses of course) is yours. You don’t just get a fixed salary, your income is based on how hard you work and is directly related to your performance and skill.
Of course, the opposite is also true.
If you don’t put the graft in, you don’t get paid.
Franchising gives you the benefits of owning a business, but it also provides something that you don’t get when you start on your own – support.
A good franchise will have an excellent back-office that will back you up and sometimes provide you with admin support.
They will often also provide preferential rates on supplies, training, insurances and other things that are necessary for businesses to operate.
But what’s more important is that they give you structure. They give you tried and tested systems that are there to support you and provide a framework with which to build your business. This is the leg-up that many will need in order to succeed.
However, you still have to work hard.
What franchising is not
Many people view franchising as a “done for you” business. It is not, by any stretch of the imagination.
You still need to run a business, but you’re getting the structure already done for you.
For example, when you start a burger business, how do you know how much mince to buy? How do you know how many buns? Have you got a supplier for ketchup?
If you buy a McDonald’s franchise, all of these things are known. They have been running businesses for years, so they have a pretty good idea of what needs to be ordered and when.
Want to do a promotion? If it’s your own business then at best you’ll be able to afford to advertise locally, but have you notcied how McDonald’s are always on the TV advertising their latest offers?
That national coverage helps everyone in the franchise.
All of that clout means that the minute you start your business, you have a huge machine working for you, providing a great brand and bringing customers through the door from the start.
Of course, it costs
Buying a franchise will obviously cost, and depending on the type of franchise, how popular it is and the support they give, this cost can vary wildly.
There’s often an on-going support cost, too, and you’ll probably have to pay for training, but the benefits can easily outweigh these downsides.
You’ll probably still have to take out a loan, and so you’ll also need to provide a business plan and forecast. Guess what? The franchise can help with this, too.
In fact, getting that loan may well be a lot easier if you’re going to be using it to invest in a business that can already boast success.
Banks don’t like risk. They like to see a solid business plan.
If you’re starting out completely on your own, that’s going to be difficult.
If you’re buying into a franchise, then it’s likely you’ll be able to base you plan on actual figures that can be proven.
Is it for me?
It would seem, therefore, that the franchise model is perfect.
Surely having all of that support is beneficial to anyone starting a business?
Well, let’s consider some entrepreneurs and why they’re considering it in the first place.
Many people who start businesses are doing it because they can’t stand working for “the man.” They hate systems, and they want to work they way THEY want to work.
Is this you?
If it is, then some franchises may not be for you at all.
The systems are proven. They’re solid. They work. That why they’re successful, so you’re going to have to toe the line.
You’re not going to be able to put your own sauce on a Big Mac.
You won’t be able to offer diced rabbit on your SubWay.
However, if you like structure, but you just want to be in control of your own workload, and you like the idea of running a business that already has a built-in working business model, then it could be just your thing.Business & Finance Articles on Business 2 Community