Venturing into business is a defining life decision, especially when leaving employment and establishing your own enterprise. However, it can be difficult to choose between buying a franchise and starting a business from scratch. Even when the choice is made, it can be challenging to determine the type of business.

Whether starting a business or choosing a franchising model and buying into an established system, there are several ways to get started. As you read further, you will gain insights into buying a franchise or starting your own business, enabling you to decide which model works best for you.

Benefits of Buying A Franchise

Among the top benefits of buying a franchise is buying into a business with brand recognition and customer trust. Potential customers in your area are likely to recognize the signage, name, and your brand's reputation, including customers who are brand loyalists. For this reason, it becomes easier to make your first sale and increase your revenue since you already have people who know and trust your brand name.

Franchising means your systems and operations are in order, averting the practice of trial and error when starting an independent business. In most cases, franchisors will provide the tools and systems to ensure your business runs effectively and smoothly. Also, the Franchisor can help create opportunities for your business that enable you to grow swiftly.

Buying a franchise also provides you with access to advisors and experts within your industry. Furthermore, your company receives adequate protection from the already established brand, including a trademarked name and creative logo. Ongoing support could include maintaining your social media platforms, frequent updates regarding your network, and proven marketing and advertising strategies to further drive customers and revenue. Essentially, you get ample time to concentrate on your business and achieve your goals.

As part of a franchise, you will be part of a larger network that has stronger buying power for inventory and supplies, which is something that offers a significant edge over independent businesses, leaving you with a larger profit margin. The money savings do not stop there, with potential tax incentives for franchisees; the IRS Section 179 tax deduction allows you to deduct the cost of some assets as expenses during the year they were in service. 

Other Things to Consider When Purchasing A Franchise

Buying a franchise lets you buy into an already existing and proven business model. It enables you to access a franchisor with a proven track record, sturdy supply chain, expert technical support, and an effective training program. Many possess an excellent success rate with reduced chances of business failure.

Franchising also allows you to purchase a fully operational business or start under the brand's signage and name. Buying into an existing franchise will enable you to enter an enterprise with existing customers with a workforce already in place. 

What Does Starting Your Own Business Look Like?

Starting a business can be exciting but daunting for most entrepreneurs. When you decide to start your own business, you will be in control of your operations and systems. This ranges from getting financing for your startup to opening the doors and fostering expansion and sales.

When opening your own business, you need to research the market and your intended customers. This means improving your operations and systems, advertising effectively, and developing the latest marketing strategies and anything involving your business.

Things to Consider When  Starting Your Own Business

Starting your own business requires figuring out everything on your own. Although you research your market and study how similar companies operate, there will still be a learning curve. Learning from the market can help solve some of your mistakes, but riskier errors can affect your business.

Contrarily, franchising lets you benefit from existing systems, including templates and resources, to prevent such risks and mistakes. In addition, establishing your own business means starting without a brand name, website design, business cards, logo, sales brochures, and employee training. Buying an already trademarked franchise readily provides all these elements of starting a business.

Questions to Ask Yourself When Deciding Between A Franchise and A Startup

How do you mitigate risk?

When starting a new business, you might be comfortable with certain risks. However, consider the amount of risk you can handle. If you are more risk-averse or prefer to lessen your exposure to uncertainties, buy a franchise to enter a support system and proven business model.

Are you innovative or desire prescribed systems already edged for success?

The best part about franchising is that the franchisor provides ample support for the initial set-up of the business. Together with a proven track record, you get to start your sales from the first day. However, if you prefer to have input in the business, like creating your marketing plan and designing the store's layout, then starting your own business is ideal.

How do you take direction from other people or companies effectively?

Buying a franchise provides freedom and independence but requires compliance with the franchisor's predetermined terms. These include sharing your financial information and spending on certain business elements such as marketing. This enables the franchisor to analyze its franchise system's performance, facilitating economic improvements and business profitability.

Success Rates for Franchises vs. Startups