Are you thinking of starting a business? If so, you’ve come to the right article for one of the important factors to consider when choosing what type of business you want to run.
One of the considerations potential business owners need to make is whether to start a business from scratch or buy a franchise instead.
A franchise is a type of license that grants you, the franchisee, access to a franchisor’s proprietary products, branding, business knowledge, processes and trademarks, thus allowing you to sell a product or service under the franchisor’s business name. In exchange for acquiring a franchise, you will usually pay the franchisor an initial start-up fee and annual licensing fees. One example of a franchise business is McDonald’s. When you pay McDonald’s franchise fee, you can own & operate your own branch of McDonald’s. The company that owns McDonald’s will give you the terms & conditions for franchise, initial training & manual, and company products to run as a McDonald’s branch.
There are many advantages to buying a business franchise in Australia, especially when you’re a first-time business owner, which is the reason many people give it serious consideration. Of course, at the end of the day, your decision will be based on your personal passions, goals & objectives. But it’s well worth the time to look into the advantages of franchising that you may not have been aware of, and that may just change your prior plans for the better.
Here are the advantages of buying a franchise:
Little to no industry experience required:
While it’s important to have business knowledge and skills, you won’t have to know the ins & outs, nor have experience in a particular industry to purchase a franchise. You’re buying an already established business, which means the franchisor will provide you with the relevant training so you can develop the necessary skills to succeed at running the business.
Existing customer base & brand awareness:
A customer base and brand awareness is tough to develop when you’re a new small business. On the other hand, a purchased franchise already has a name, with active & established customers, which cuts your work down drastically and assures you customers from the start.
Lower risk than a new business:
There are many trials & errors when starting a new venture. Franchised businesses, however, have already worked through these and thus, have proven strategies & processes that work.
Franchise owner support:
Franchisors provide ample support & training to franchisees because their brand reputation depends on your ability to run a business using their name. In addition, franchisors have years of business knowledge & experience that you can gain from them, which is not often available when you start your own business.
Good opportunities for growth & expansion:
If you’ve enjoyed having a franchised business & are being rewarding nicely for it, you may want to open new locations in the future. If you do, you’ll still benefit from the franchisor’s support, plus the same demand & brand awareness in those new locations.
As you may conclude, it’s much quicker and easier to purchase a franchise than to start your own business from scratch. One down side to a franchise however, would be the limited amount of creativity you would be allowed to have, since franchise processes are often strictly uniform to maintain the brand’s already established image. Additionally, any business innovations or new procedures would have to come from the franchisor or be approved by them first.
If creativity and full control of your business is an important part of your interest in starting a business, then buying a franchise may not suit your tastebuds. But if your main reason for starting a business is for immediate profit, low risks, & the chance to learn more about business before venturing fully on your own, then a franchise can be the perfect business to start off with.
If you’ve enjoyed this article, browse through National Brokers Network website blog section for other great ideas & advice in business & investments.
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