To Be or Not to Be a Franchisee: 3 Key Questions to Consider
Consider your personality and approach to business matters to determine if you're ready to start your own company or purchase a franchise.
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The dream of owning your own business is alive and well for most Americans. The only problem is that many people don't know where to start on the journey to becoming self-sufficient. There are a million different options, but first and foremost each potential entrepreneur must decide if he or she wants to become a franchisee or start a business independently.
Each route has its benefits; therefore it's critical to take the time to consider both options before making a decision. What it initially comes down to is asking yourself the following questions:
Related: What Is the Real Survival Rate of Franchised Businesses?
1. Do you understand every aspect of the business or do you thrive in one area?
When starting a business from scratch, entrepreneurs should be well versed in every single element of the enterprise. They need to create systems and procedures and test whether these work for that particular business. This process of ironing out the details deters some from choosing to own an independent business but excites and challenges others.
Conversely someone who buys a franchise knows that someone else has already done the "dirty work" and found the most effective systems for that particular business. A franchisee must simply thrive at correctly running the system while adding their own personal management touch.
Related: The 3 Scariest Things About Owning a Franchise
2. Are you an expert at making a name for yourself or would you like to be associated with an already strong brand?
When purchasing a franchise, you are also inheriting the reputation of that brand. For example, if you open your own Dunkin' Donuts shop, you will encounter customers who already recognize the pink and orange logo. Many people will know whether they like the brand and will expect speedy service providing them doughnuts and steaming hot coffee.
On the other hand, those starting a business from scratch have a chance to create a unique brand identity. But consumer trust and awareness don't come easily; they need to be earned through time, consistency and excellence.
3. Are you the kind of person who likes to go it alone or do you appreciate a sense of community?
Owning a business -- whether it's a franchise or not -- can be risky. Some people prefer to be self-reliant and want to manage potential problems using past experiences and premonitions as guides. An entrepreneur must solve the issues that arise.
Others prefer enlisting the support and help of others to ensure that their business runs smoothly. A franchisee has many built-in allies, including the franchisor and other franchisees within the system.
The most important factor fo success is making sure that problems are identified and steps are taken in the right direction.