Running a business successfully is fulfilling. However, setting it up and having it up and running is always the hardest part. The journey is always filled with pitfalls, which many are unable to evade and eventually give up. In fact, more than 50% of startups do not make it to their first year.
What if there is an easier way to own a business without going through the grueling experience of starting one? Well, starting a business from scratch isn’t the only option, you can always leverage the franchising business model to become a business owner. This way, you will be starting from a point of tested markets and business models, increasing your business chances of survival. The following are the reasons you should start a franchise.
1. It is easier to hire talents
A franchisee’s success translates to the franchisor’s success as well. Having this in mind, franchisors will always offer all the support a franchisee will need to run the business successfully. This includes tested methods of hiring talents. Instead of writing job descriptions and training programs from scratch, you have all this already done for you. In addition, you get to gain valuable insights on hiring practices from other franchisees during meetings.
Given that the franchisor is a known brand, you stand better chances of attracting top talents since they trust the brand.
Besides, owning a franchise allows cheaper alternative ways of bringing employees onboard. If, for instance, you have a franchise in Hong Kong, you can hire through Hong Kong employer of record services. This takes away the need to hire a HR team since all employees’ HR, legal and taxation needs are handled by the organization.
2. You are more likely to succeed
Starting a new business means trying to push an untested product in an uncertain market. The process poses a daunting task that cost money and time, without a guarantee of ever succeeding. This is different from starting a franchise since all the hard work has been done by the franchisor. You are moving an already known product to already existing customers.
The business model has been proven and you get to tap on the advertising capabilities of the franchisor. When you start from a point where much is already done for you, you are more likely to succeed as compared to starting everything from zero.
3. Getting funds is much easier
Sourcing for funds for a new business is always a struggle as compared to an already established brand. This is because an already running business can give more accurate financial projections based on actual operations. As a franchisee, you can always take advantage of your franchisor’s experience to draft financial projections that can be more appealing to lenders.
Lenders also consider franchises a much safer investment given the history of the franchisor. Thus, they are more inclined to offer loans to a franchise as compared to an independently owned business.
4. Getting equipment and products is simplified
Starting a business is always an expensive affair, especially if you have to buy equipment to start operations. When it comes to starting a franchise, getting equipment is much easier. Depending on your agreement, the franchisor can rent you all the equipment that you need, or offer it to you at a reasonable price compared to the market price. Other franchise agreements come with equipment as a start-up package, eliminating the need to look for one.
The same goes for products; the franchisor offers cheaper and reasonable ways of getting the products that you need. In addition, you can always trust the quality control measures put in place by the franchisor.
5. You become a part of a team
Most startups fail because entrepreneurs go at it on their own. Most decisions are made from assumptions, which most of the time crashes with the reality of the market. Starting a franchise, on the other hand, offers the opportunity to work as a family. You already have a network of other franchisees ready to work with you through the journey.
In addition, the franchisor is always ready to offer you the necessary guidance that you need to thrive. This means that you have the opportunity to brainstorm with other team members whenever you are faced with difficult decisions along the way.
According to statistics, franchise survival is much higher that independently owned startups. This is because franchises start under the wings of already established brands. However, this doesn’t always guarantee profits and success. You will still be required to put in work to drive growth for the business.