Starting a Business vs. Buying a Franchise: Deciding What is Best for You

While starting a business from scratch offers one total freedom over both day-to-day and big-picture operations, buying a franchise is widely considered a safer route, especially among first-time buyers. And, that’s for a good reason; less than ⅓ of businesses survive long-term. There is no right or wrong answer, but understanding the advantages and setbacks of both opportunities will help you decide what’s best for your situation. Keep reading to learn whether starting a business vs. buying a franchise is right for you.

Starting a Business vs. Buying a Franchise: Deciding What’s Right for You
Aspiring entrepreneurs are attracted to the idea of becoming their own boss, but that can come to fruition in other ways than building a business from the ground up. Learn more about these two types of business structures below.

What to Know About Starting Your Own Business
Although the success rate tends to skew more towards franchising, starting your own business can be worthwhile. Both opportunities require hard work and immense dedication, but you have to be willing to go that extra mile when starting a small business. You’re required to take many additional steps, such as establishing a business model and generating brand awareness, which are two make-it or break-it factors in an enterprise’s success. Still, the allure of having total control could give independent businesses a slight edge over franchising. It’s up to the business owner to determine what elements are most important to him or her.

Should You Become a Franchisee?
New business success is contingent on a lot of factors; demand, brand awareness, and ultimately having a great business idea. Franchisers handle these responsibilities for you, which reduces your risk of failure. They have systems in place to help franchisees navigate through the more challenging aspects of business ownership. If you’re interested in franchise opportunities, consider the following advantages:

Business Plan: Neglecting to develop proper systems and structure is one reason the new business failure rate is so high. Franchising takes the trial-and-error out of devising new methods. As a part of their franchise agreements, owners are expected to follow the same policies across their network.

Ongoing Support: Owning a business can make you feel as if you’re constantly putting out fires. Franchisees receive ongoing support to help them manage their daily activities. Plus, most franchises offer training and development opportunities.

Brand Recognition: One of the more substantial threats new small business owners face is a lack of brand awareness. Coincidentally, this is a franchisee’s greatest strength; their organizations are often common household names. Their customer base is already well-aware of the product or service, thanks to national advertising campaigns.

If becoming an entrepreneur is one of your goals, we encourage you to consider the advantages of buying a franchise vs. starting from the ground up. The franchise system takes the guessing out of business ownership by providing a framework for success. Let one of our international teams guide you through the buying process. In addition to working with independent businesses, Sunbelt Business Brokers also represents franchises. Locate your closest office to learn more about franchise opportunities in your area.

Brian Knoderer

Brian Knoderer is the President of Sunbelt Business Brokers. He has over 20 years of experience as a business owner and managing business transactions. As a seasoned intermediary, Brian has successfully represented companies in a broad range of industries helping business owners achieve their desired exit strategy or growth initiative.

Brian is also co-owner of Sunbelt Indiana and Managing Director of MMI Capital Partners, a franchisor focused investment banking firm.

Previously Brian was involved in several entrepreneurial ventures as well as having held corporate roles in Franchise Development for Prime Hospitality and Choice Hotels.

Brian is a graduate of Ball State University with a degree in Management Information Systems and earned his MBA from Butler University. He has received the Certified Merger & Acquisition Advisor (CM&AA) designation, holds both the Series 7 – General Security License and the Series 63 – Uniform Securities Licenses, and is a licensed Real Estate Broker. He has been affiliated with several organizations including the Entrepreneur Organization, a Member of the International Business Brokers Association, Venture Club, and a Board Member of The Entrepreneur Institute.