Franchise or Small Business: Which is Right for You?

By Susan Guillory

So you’ve decided to quit your job to become an entrepreneur. Your decisions are far from over, my friend. Not only do you have to decide what kind of business you want to start (what industry? What type of products or services will you sell? Where will it be?), but you’ve got one more major decision:

Do you want to buy a franchise or start a business from scratch?

Each has its own benefits and drawbacks. Let’s take a look.

Why Franchising Rocks

Realize that starting a business from scratch will be more challenging. Your business is unproven, and you won’t know there’s a market for it until you launch.

A franchise, on the other hand, is a proven entity. There are dozens — if not hundreds — of this brand all over the country or even world. Other franchisees have successfully made a go of their business, and you will too.

A franchise comes “out of the box,” meaning all the processes and procedures, marketing, and products have already been established for you. All you have to do is unpack them and start your business. There’s no guesswork, which many people prefer.

You’ll have access to your franchisor, who you can ask questions and lean on for support. You won’t get that with a small business.

On the other hand, you have to pay a franchisor for the privilege of opening a franchise, and that can be expensive, depending on what sort of brand you’re buying into. And you will have to hand over a percent of sales every month as royalty fees, which help pay for marketing and other administrative expenses.

On the Other Hand, Small Businesses are Pretty Great, Too

But if having everything already laid out for you isn’t challenge enough, you might prefer to start a business from scratch and build it yourself. With a small business, you set the course. You decide on the products you’ll sell. You set the prices. You do all your marketing. Some find deep satisfaction in having a hand with every aspect of their business’ success.

You may be able to come up with a unique business model that can’t be found anywhere, and could realize more success than any franchise. Heck, you might even franchise your business, and be proud when you see more locations popping up all over.

Yes, there’s more risk because there are not guarantees of success. You won’t have the support network that you would with a franchise. You will risk failure.

But then again, anything worth doing is worth taking a risk for, right?

Think carefully about which path you choose for your entrepreneurial journey. It’s a big one.

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Susan Guillory

Susan Guillory is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, The Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.


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