Not every entrepreneur is cut out to be a franchisee, just like not everyone is meant to start their own business—at least not for the first time. However, it’s not always easy to determine which option is best for you. You could be fit for a franchisee role, but what if you are better off building a business from scratch? Obviously, this is a decision that can affect your career path for years to come.
If you are leaning towards the franchisee route but still aren’t sure, here are several signs that may mean a franchise is more suitable for you than starting your own business.
1. You want something already established
One of the main benefits of buying a franchise is that you’re also buying their brand reputation. For example, if you take on an opportunity for a screen printing business from an already established company, you won’t have to worry about building the business from the ground up. Why? Because it already has the experience, the reputation, and the trust from customers—things that would take you months—if not years—to achieve if you build a business from scratch.
2. You have limited business experience
A franchise comes with a tried-and-tested set of systems, techniques, and guidelines that the franchisor has spent years cultivating. That said, buying a franchise is like buying a puzzle that has already been assembled—you won’t have to do the heavy lifting in trying to figure out what works, the franchisor has already done that, which is why they are expanding the business into other business owners’ hands.
If you have limited experience in business, becoming a franchisee may be the right move for you. While having experience gives you an advantage, it is unnecessary, unlike when you establish your own company.
However, this doesn’t mean that you should go into it with zero knowledge of running a business. Having at least a basic understanding of business operations (especially when it comes to the type of franchise you want to purchase) is imperative to achieving success as a franchisee, so be sure to know the fundamentals—at the very least.
3. You are not good at hiring people
Yes, you can hire someone to hire people for your business, but what about those first few people you take on board? Keep in mind that your first employees play a huge part in which direction your business will go, and if you are not good at hiring people, you may end up with a huge loss in your hands.
When it comes to a franchise, you can have the franchisor hire people for you. This way, each one of your employees goes through the company’s standardized testing and hiring processes. You may have the last say before you take on a new employee in your franchise, but it’s certainly better knowing that they had passed the franchisor’s hiring process before their file ended up on your desk.
4. You are new to the industry or niche
Even if you already have experience in previous business ventures, you may still find yourself having a difficult time adjusting to a new industry or niche when you decide to start another business. For example, if your first business is in the real estate industry and you want to start a food business, the differences between these two fields can be night and day.
Buying a franchise can make the transition into an unfamiliar industry a hundred times easier—in many ways, running a franchise is like a training ground in a particular industry as an entrepreneur who came from another field. Hence, it may be better to start a franchise instead of building a business from scratch if you want to explore an industry, market, or niche outside your business expertise.
5. You want an easier time getting funding
Compared to starting a business, it is often easier to secure financing if you buy a franchise instead. The reason for this is that franchisors offer financial projections as they present you with the business plan. Lenders, therefore, can see more potential in the business venture that you want to explore, especially if the company has a good financial history.
If these descriptions apply to you, then you may do better with a franchise instead of your own business—or at least for now. Nevertheless, be sure to analyze the pros and cons of each option to make the best decision for the huge investment you are about to make.