Many novice businessmen, before starting their own business, ask themselves the question – what will be more profitable: open your own business or buy a franchise? This question is really very complex and has many nuances that are worth knowing about. Therefore, in this article, we will look at the advantages and disadvantages of each of these two types of business. If you want to earn guaranteed money with minimal investment – you can bet on eSports.
Opening your own business means going all the way on your own, which can be very confusing in places. But in your business, you will be able to manage all the processes yourself and control the work of other employees.
If you are acquiring a franchise business, then this means that you are buying an already established business model. On the one hand, it will definitely work and make a profit, but on the other hand, you cannot change what you do not like about it. Although the advantage here lies precisely in the fact that the franchisor has already made all the possible mistakes in the business for you, so you just have to learn, listen to recommendations, and manage.
Below we will analyze the main points that we have to face.
Opening an individual entrepreneur or LLC and a current account, filing a patent application, and more
1. On one’s own. How to open an individual entrepreneur or LLC, which taxation system to choose, how to register an honest mark, create an EDI, and a commodity accounting system. It’s interesting – everything is on the Internet. It remains only to be critical when opening the first links in a search engine because you need to delve into all the financial and legal subtleties.
2. By franchise. The management company must have ready-made regulations and a step-by-step plan. Large companies, as a rule, already have a partner bank through which they open IP for you. Everyone talks, and everything is taught.
Space selection
1. On one’s own. When choosing a place for your future business, it is important to take into account many criteria, the main of which are:
- The absence of competitors within a radius of 150 meters.
- Lack of educational institutions within a radius of 100 meters in a straight line.
- Not a basement (this often scares off potential customers and is completely unprofitable)
- The room must have a separate entrance (if not in the Shopping Center).
- The presence of a nearby alcohol market is an advantage.
2. By franchise. From the management company, you should receive detailed recommendations, and the manager for the selection of premises should assist in finding and choosing the very place. It is important to clarify this point with the franchisor. There are companies that are really confused about this because the place plays a huge role in the success of the store.
The initial purchase of goods
1. On one’s own. Before you begin to form an assortment and choose a supplier, you need to consider important factors:
- The minimum quantity of a unique item with a minimum budget is 1000 pieces.
- The supplier (any wholesale company) always makes a markup, so the price will always be higher than if you buy directly from the manufacturer. But there is one problem here – it is unlikely that it will be possible to purchase goods from a supplier for one store: companies require more purchases than they need for one store.
2. By franchise. In the right scenario, the management company is a distributor of many popular brands and provides its franchisees with a first-hand price.
Legal Issues
1. On one’s own. You will constantly encounter legal issues – first when signing a lease agreement, then when agreeing on a sign, in case of inspection by the authorities of your store, and when complaints are received from customers. In such situations, it is good if you have a familiar lawyer who will help you quickly and efficiently resolve all issues.
2. By franchise. Large networks have their own lawyer who resolves any issues related to their activities.
Thus, it is obvious that if you start a franchise business, then many problems will already be solved for you, and in addition, you will have your own reliable supplier and lawyer, who can always be contacted. On the other hand, the franchise option is definitely not suitable for people who have high ambitions and are not ready to put up with what does not suit them. In this case, it is better for such people to independently develop their business from scratch, go through all the mistakes on their own and draw conclusions in order to subsequently receive good profit from their business and not share it with anyone.
