With the Chartered Professional Accountants of Canada...
Deciding to start a business is a big step. This could be the pathway to financial freedom and a new sense of independence. But before getting started, it is important to consider all of the different options for opening a business and each option's advantages and disadvantages.
When a person chooses to start a completely new business, they should be prepared to invest lots of time and energy into the process. When compared to other options, this requires lower start up costs, but because there is not a set support system, the new business owner is looking at lots of time getting things off the ground. If the venture fails, there is no one else to turn to. If money is needed, it may not be easy to get financing.
On the other hand, aside from the lower start up fees, starting a new business means having complete creative control over how things run and what policies are put into place. There are no lingering problems left over from a failed or struggling business model.
When a potential business owner looks to buy a new franchise, there is already a built in support system available. From the very beginning, the brand is available to help with the start up process and financing can be easier to come by. Tried and true methods are utilized to get things moving in the right direction and on-going training ensures that the business stays strong and takes advantage of the brand's changes and growth.
Higher costs tend to be one of the biggest disadvantages of joining a franchise. Aside from the fee to purchase a franchise, there are advertisement costs as well as royalties that need to be paid to the parent company. These add up quickly. In addition to the cost, if a brand is having problems or is not keeping up their end of an agreement, things can become difficult for the franchisee.
Some individuals looking to get started in business have begun to look at the opportunities available to buy an existing franchise. On one side, there is a business already up and running. It is already obvious that the franchise will do well and its progress over the past couple of years can be easily tracked. Everything is already set up. It just needs someone to come in and run things.
While this sounds like the best of both worlds, there are some drawbacks to purchasing an established franchise. If the original owner had problems, they are immediately inherited by the new owner. Any issues with pricing, leasing the property, or even employees and customers all roll over to the new management. Cost varies from franchise to franchise, but purchasing an established business may require a large upfront investment.
Starting up any type of business, whether it is something completely new or a franchise, involves some risks and there is a monetary cost that needs to be addressed. However, now is the time to get out there and make something happen. Look into the opportunities for a franchise in your area and take the next step to find out more.