Although every business needs a system to earn increasingly higher revenues, it can be difficult to decide whether you should create your own system from scratch or simply take advantage of a system that has already been tested in the marketplace. This is the primary question you face if you’re tired of working for a company and would like to own your own business. Should you launch an original startup or join a franchise?
Let’s take a look at some of the things you will need to consider if you start one or the other and how they might be different.
- Business Concept.
When it comes to launching your own business, you need an original idea. Even if it’s a business as simple as opening up your own bakery, you need to find something that differentiates your bakery from all the others in town. For this, you would need to research the competition and baking something that the other bakeries aren’t making. You might, for example, specialize in a certain type of baked good. If you fail to come up with something, then there is no reason for people to buy your stuff rather than stay with their favorite bakery.
With a franchise, it’s slightly different. A franchise has already done the work of researching small business ideas to find an unmet marketing need. They, too, have an original idea, but they have worked out their idea long before you show up on the scene as a franchise owner. In most cases, they have used national advertising to make it clear what makes their brand different from other small businesses in the niche. A pizza franchise, for instance, will have unique recipes that differentiate their pizzas from all other pizza parlors and will have broadly advertised exactly what makes them special.
- Business Services.
There are many basic business services that both a startup and a franchise will need. For instance, they will both need business bank accounts, marketing, sales, accounting, and legal services. The differences between these services are more one of size and scope rather than the services themselves; a franchise will need far more legal services than a regular small business because it is a much more complex business entity.
- Business Processes.
The business processes between a small business and a franchise may look similar but they are rooted in completely different philosophies.
When you own your own small businesses, your main concern is freedom to do everything your own way. You not only want to design the business according to your ideas of good design, but you want the freedom to validate your own business ideas, sell what you want, the way you want, and at the prices you want. In addition, you’re quite willing to change the product line if you come across something that will sell better within your niche. Similarly, your marketing and sales strategies are subject to change as you learn new ways of getting the word out about your business and converting prospects into customers.
An important business process that a franchise can offer which is frequently overlooked is a payroll service. Relationships with companies like payroll service Columbia South Carolina are often built into franchise agreements and can be invaluable for your busienss operations.
While a franchise in the same niche is also interested in design, developing a product line, marketing, and sales, they will organize their business processes in a different way. They will look for the most cost-effective design that can be replicated in all their units. They will do the hard work of testing different products and then double down on a proven product line. Similarly, their choice of marketing and sales processes will be based on extensive testing, with the most successful ideas locked into a system to be replicated by all their franchisees. In short, franchises are not interested in experimenting beyond a certain point, after that, they are invested in protecting the status quo. Once their primary ideas have been discovered and tested and systematized, then they are replicated as closely as possible by all franchisees.
In the final analysis, deciding between your own business or joining a franchise is less about the business model and more about you. If you’re a visionary and creative thinker, then you’ll constantly be tweaking the business systems provided by the franchise, which will break the agreement. If, on the other hand, you want to simply work a proven system, then a franchise will offer you the best chances of success.
