Should aspiring entrepreneurs start a new business or invest in a franchise? Before making a decision, several factors should be considered.
A startup business means building from scratch, but it also means you can innovate and create products, services, and a unique brand image. You can handpick staff members, choose the location and to make all business decisions.
Startup businesses offer the flexibility of work schedules, workplaces, and the rewards of building something from scratch and creating employment opportunities. However, starting a business requires a significant time investment and a vast amount of uncertainty and risk.
Meanwhile, investing in a franchise reduces some of the risks associated with starting up a business. Franchisees operate a business model that runs on proven systems and processes that have been tried and tested.
Unlike starting a new business, franchisors offer franchisees an operating manual, training programs, marketing materials, and ongoing support. Franchise opportunities provide an established brand and an established customer base. Franchise ownership also reduces the amount of time needed to get a business operating.
However, the franchisor also lays out most of the decisions, leaving little room for creativity and freedom. The franchiser also obligates regular franchise fees and ongoing royalties for continued support and use of the brand name.
Industry choice is an essential factor in deciding whether to start a new business or invest in a franchise. Before venturing into a business, you need to do research and gather information. Understanding the industry, the target demographic, anticipated competition, and current market trends is essential in creating an effective business plan.
Franchise opportunities have a well-established business model with proven success, with a clearly defined target demographic and optimal locations. It is easier to grasp the market trends with franchise opportunities.
Another important factor to consider is the need for creativity and flexibility. A startup business allows entrepreneurs to explore creativity, try new things, and challenge traditional industry standards. Entrepreneurs are free to make and pivot business decisions that will shape the success of the business.
Franchises are practical for entrepreneurs who are not necessarily interested in the creative process but enjoy having an established system to work in. Franchisees have less control as a franchisor may dictate strict operational guidelines.
Brand recognition carries significant weight in a company’s success. Entrepreneurs need to determine whether they can build a brand successfully or take advantage of existing established brand name recognition. Brand recognition can bring tremendous advantages, such as trust, customer loyalty, and a well-established sense of quality to customers. Franchise opportunities come with an established brand name, logo, and related service standards, verified over time.
Startup businesses provide freedom and flexibility that franchisees do not have. Franchise opportunities reduce some of the risks associated with starting a new business and provide an established brand name, excellent support, and proven methods.
Entrepreneurs with a creative drive, a passion for building a business, and an appetite for risk may choose startup businesses. On the other hand, entrepreneurs who want the security of an established system and are OK with having less room for creativity may opt for franchise opportunities.
Each option has its advantages and disadvantages.
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You may contact Armando “Butz” Bartolome for questions and more information.
By email: aob@gmb.ph
FB Page: Armando Bartolome
Linkedin: https://www.linkedin.com/in/franguru/
Website: https://www.gmb.ph
