Should I Open My Own Business Or Open A Franchise?

by | Jul 1, 2024 | Franchise | 0 comments

So you’re considering opening your business – congratulations! It’s an exciting time: you’re ready to be your own boss, take charge of your future, and create the future you’ve always wanted.

This is the best time to take your time and really consider which path you want to take forward. Are you going to open your own concept, or are you going to open a franchise?

If you’re trying to find the right answer for you, go through the following questions:

  1. Do you have a product or service to offer that is completely new and unique?
    If so, you’re probably not going to find it in a franchise model, and it might be best to start from scratch. If not, consider exploring your passions in the franchise space.
  2. Do you have a lot of experience in the industry you’re looking to enter?
    If you’re hoping to open the best restaurant in town, absolutely love food and bringing people together, but have zero experience in the restaurant industry, then you should consider a franchise. You’ll have the support and guidance to find success in that industry, rather than blundering forward with no foundation. If you have experience in the industry and you’re ready to strike out with complete confidence, then forging your own path might be the most rewarding.
  3. How many hats are you willing to wear?
    Do you or your partners have (or are you willing to learn) all the skills necessary to open and run a business of your own? Just a few of these skills and operations are sales, marketing, content creation, graphic design, spatial design, equipment maintenance, customer service, communications, social media, finance management, bookkeeping, investment analytics, hiring personnel and training, managing payroll, and so much more. If you feel confident that your team can learn and manage everything without guidance, then your own independent business may be the right path. If you’d feel more confident with the support of a tested model and operations for your industry, then a franchise model might be best. There is always the caveat that you can hire professionals for many of these tasks, but remember that extra cash is often in short supply when you get started!
  4. And finally, what is your risk tolerance?
    Consider the money, time, and heart you’re planning to invest in this business, and be brutally honest with how much risk you’re willing to accept. Understand and face the statistics: ⅓ of small businesses fail after 2 years, and ½ of small businesses fail after 5 years. Compare this to a franchise model, where your location has a 92% chance of being open after 2 years, and 85% chance of being open after 5. Remember to consider profitability with this as well – you don’t want to be barely hanging on and regretting your decision.

Consider your answers, consider your partners’ answers (if you plan to open with partners), and be honest. You have a much greater chance of success if you start your journey going the right direction.