Are you looking to open a new business?
You have two paths ahead of you: start a new one from scratch or buy a franchise. In this article, our focus is on franchising.
In the United States, there are over 700,000 franchises, representing about 3 percent of all businesses in the country. From these numbers, it’s clear franchising isn’t a popular option among many entrepreneurs.
However, solely looking at the numbers is akin to looking at one side of a coin. The truth is the benefits of franchising cannot be ignored.
Eager to learn more about why franchising is the best way to find small business success? Read on!
1. Minimize the Risk of Failure
You’re certainly aware that small businesses in the U.S. have a high risk of failure. It’s so bad that only about 30 percent of small enterprises will live to celebrate a 10th anniversary.
There are plenty of reasons so many of these businesses fail, but one stands out: lack of sales. And why would these businesses lack sales? It’s largely because they’re selling a product or service that has no market demand.
That’s potentially what you’re walking into if you decide to start a brand-new business from scratch. Unless you do market research (which many small entrepreneurs don’t) and validate the idea, disaster awaits you ahead.
Or, you could buy a franchise and minimize that risk. You see, when you go the franchising route, you’re buying a proven business model. The franchiser is already making sales, so you have no reason to doubt that their product will sell. You just need to find the right location for the business.
This isn’t to say franchises don’t or can’t fail. Just like any business, they’re subject to economic and market conditions. But, compared to new businesses, franchises have better odds of succeeding.
2. Plenty of Franchises to Choose From
Given that the franchise industry is small, you may be forgiven for thinking there are limited franchising opportunities. So, perhaps you want to start a landscaping company and you aren’t sure whether there are any established landscaping franchisers in the market.
Well, you’ll be pleased to learn that there are countless franchising opportunities. Whether you’re eyeing the food service or dry-cleaning market, you’ll find plenty of options.
Heck, even in a niche industry like healthy snacks vending you’ll have many franchises to choose from. Check out Healthy You Vending reviews to get started!
That being said, a key part of running a successful franchised business is choosing the right franchisor. You have to put time and effort into researching the various potential franchising options and settle on the best.
3. Get Startup Support
Starting and running a small business is anything but easy, especially for first-time entrepreneurs. Many are basically winging it, hoping for the best outcome. With adequate support, you can make costly mistakes that will result in the failure of the business.
Yet, if you’re starting a business from scratch, there’s no tangible support you’ll get. You’re all on your own unless you take practical steps to get a mentor or hire small business consultants.
The good news is franchising is different. Franchisers don’t leave franchisees to their own devices. They provide business support, helping ensure the franchises hit the ground running from day one.
This support can come in the form of mentoring or even technical assistance. For example, if the business needs to set up propitiatory machinery and equipment, you can count on your franchisor to send a team that will help you set them up.
Now, different franchisors offer various levels of support to their franchisees. If you’d appreciate a high level of support, it’s important to focus on finding a franchisor who has a reputation for being very supportive.
4. Brand Recognition
Building a recognizable brand is one of the primary goals of most small business owners. Unfortunately, a vast majority of small enterprises rarely morph into well-known regional or national brands.
Why? Since the small business marketplace is saturated, it’s almost impossible to build a brand that stands out.
Franchising offers you a prime opportunity to start and run a business that has a recognized brand. In most cases, franchisors are established national brands. One look at the company’s branding and anyone can tell what company it is.
Since your new business will use the franchisor’s branding elements, you’ll have an easier time attracting customers. For instance, imagine setting up a Starbucks in your neighborhood. Considering almost everyone is familiar with Starbucks, your new coffee shop will need no introduction.
Ultimately, it’s things like superior brand recognition that give franchisees a greater shot at success. The franchisor already has a loyal customer base, so you can bank on getting a share of that base in your local market.
5. Greater Peace of Mind
This is an often overlooked franchising benefit, but it’s just as important.
Most small business owners are in a constant state of worry. From the fear of failure to fierce competition in the market, there are several sources of worry. It’s no wonder a recent survey revealed that about 42 percent of small business owners are burned out.
Franchising won’t take away every worry of being an entrepreneur, but you’ll be in a far better place mentally. Even knowing that franchises have a good chance of succeeding is enough to make you sleep well at night.
Enjoy the Benefits of Franchising
Franchising might not be the popular option for starting a business, but it’s clearly advantageous. These benefits of franchising should be enough to make you make up your mind if you were on the fence. What could be better than starting a business with a proven business model?