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Starting a business can be an exciting venture. However, to most, it’s a very daunting prospect. With so many decisions to make, the added pressure of choosing between starting your own business and purchasing a franchise can feel overwhelming. It can be frustrating to spend hour after hour researching which option is best for you.
To help you decide, we’ve outlined the difference between starting a franchise business and a startup business – and why (we think) franchising has the advantage. Everyone has their own reasons for starting a business, whether it’s for a more flexible work/life balance, a career change, or greater financial freedom. Whatever the reason, running a successful business can lead to a very fulfilling life.
A franchise business is an organisation that allows other businesses and individuals to use licensable trading names, systems, branding, and products in return for a fee and commission costs.
This enables individuals to start a new business with a proven business model, with support from peers and from the resources provided by the franchisor (such as training manuals, advice, and guidance).
The difference between a franchise and a startup business is not necessarily a subtle one. With both you can become your own boss, run your own business, and experience exceptional financial rewards.
The difference lies in the work needed to setup your new venture, and the success rate involved.
Startup businesses may have complete control when it comes to things like brand and products, but the essence of running and starting a business remains the same. As a franchisee, you’ll need to pay an initial fee to start your own business within the network, but then you can jump straight into building that business with all the processes already in place.
With your own small business, you’ll need to invest lots of time and capital into all manner of things, like product development, financial planning, and advertising costs – this can make owning a startup a significant challenge.
Opting to start a franchise business has many advantages, with each providing value in different areas – making life more convenient for you and making your journey as a business owner less stressful.
We’ve listed five reasons why franchising is an exceptional option for those looking to take control of their career.
One of the core benefits of franchising is that you buy into what is effectively a ready-to-go business. A major drawback of most startups is the amount of work that needs to go into setting everything up before you can even start making money.
Franchisees benefit from a proven business model – developed and refined to offer the best opportunity to support sustainable, effective, and profitable growth. This includes your standard business processes, such as hiring staff, accepting payments, and delivering your products. Having these in place allows you to focus on the work the directly helps to grow your business.
Franchise businesses don’t need to spend weeks developing things like a solid supply chain, or marketable products. This has all been done for you and is proven to work.
When you run your own startup business, you need to add to your existing startup costs to either outsource or employ staff to help you run the organisation. That’s not how it works when you franchise.
Franchise owners benefit from expert internal support from the HQ team. This means you’ll have immediate access to marketing, IT, human resources, customer services, and a whole lot more. This ongoing support system is why franchise businesses see impressive success rates, and the risk involved is often minimised (versus a startup business).
With some franchise businesses, like Premier Education, new franchisees are enrolled into a successful training program as part of their initial investment. This gives the franchise owner all the skills they need to run their business day-to-day, and to make the most out of the successful business model.
Another unique advantage of starting your own business within a franchising business is that, as a franchisee, you’ll be surrounded and supported by a network of likeminded individuals.
With franchisees across the country, you can ask questions and find the best ways to grow your business – this includes finding the best way to create a local marketing plan, learning new ways to reach your customers, or even learning the easiest way to live the self-employed lifestyle you want. This access to community is one of key reasons why the franchise route prevails over building a business from scratch.
The franchise system can work in whatever way you need. If you’re interested in building a franchise business from scratch, you can find an area that is fresh and ready to go. On the other hand, if you’re looking to purchase a franchise business that’s already well underway, then there’s often an option for that as well.
The variety of franchise opportunities is endless – you really can build the business you want, while having the security of an established team supporting you along your journey. This option to purchase a franchise at a level that meets your need and investment goals gives a massive advantage over creating a business startup, and the whole industry of startups.
When you join a franchise business, not only do you get the benefits of a proven business model and existing systems, but you also get access to an established brand.
With startups or your own independent business, it can be hard to break through the market and secure a place for your brand’s identity. This isn’t a problem when you franchise, as you’ll become part of an existing brand which already has a compelling reputation.
This benefits your new business growth in many ways. For one, your target audience are much more likely to be aware of the brand already, putting them in a better place to become paying customers much sooner.
Another benefit comes with the opportunity to work with partners and organisations that would be almost impossible as a small business or independent company. The existing brand reputation allows for a greater collective buying power, which can often lead to collaborations with other large, reputable organisations (such as national governing bodies).
You can get started on your franchise journey with us with an initial deposit of just £2,000. From there, we’ll help you to create effective business plans, financial forecasts, and provide you with all the guidance you need to secure sufficient funding for your franchise business.
Find out more about our franchising opportunities.