Opening a Franchise vs. Opening a Business

Should you start a new business or invest in a franchise?

Opening a business is a common dream. In fact, it’s right up there with buying a house with a white picket fence and having two kids. If you’ve been dreaming of opening your own business, it might be a good idea to really consider your other options, namely, opening a franchise. Owning a franchise is a lot like owning your own business, with a few key differences, of course. Here are a few reasons to invest your money in a franchise rather than in a startup:

#1. You’ll have fewer expenses to get started.

There’s no doubt about it, starting your own business can be pricey. Not only do new business owners have to pay for the premises, the products, the talent, etc., but they also have to get their name out there somehow, and the only way to do that is through marketing. Many new business owners make the mistake of underestimating the cost of marketing their business, and that can be fatal to new businesses of all types. In most cases, starting a franchise is much cheaper than starting a business, but the costs can vary from franchise to franchise. In addition to being generally less expensive to invest in, with a franchise, you’ll be provided with an outline of all future costs, which will help you to stay prepared.

#2. It’ll be easier to get financing.

In this day and age, getting a small business loan is not easy. Since the majority of new businesses fail within the first couple of years, investing in small business is deemed risky by the bank in many cases, and banks are wary of too much risk. Franchises are seen as less risky and less likely to fail, as they are already part of an established, successful system. In most cases, not only is it easier to get approved for a loan for a franchise, but you’re also likely to get much better rates when you do.

#3. You’ll already have brand awareness.

As we mentioned in our last point, marketing is a must. In order for you to actually gain clients and customers, they have to know that you exist, and the only way to do that is by establishing your brand and getting it in front of people. Unfortunately, marketing isn’t cheap, and it can be a very restrictive expense for many new businesses. But when you buy a franchise, you are investing in a business that already has brand awareness. And while that doesn’t mean that you won’t need to do any marketing, you’ll have a huge head start.

Although there are pros and cons of both starting a business and investing in a franchise, there are many reasons to consider the latter. In our next blog, we’ll be going over a few more reasons to open a franchise instead of business, so stay tuned. In the meantime,  if you are interested in joining our commercial cleaning and water damage franchise, please contact us at Classic Commercial today.