In the world of ‘conventional’ business, there are three ways to approach owning your own business. They are, in no particular order, buying a franchise, buying an existing business, and starting your business “from scratch.” Each of these choices gives you advantages, disadvantages and options.
If you decide to go the route of a franchise, you are buying a proven model, and the franchiser may check out the location you are proposing to make sure their model fits into the demographics of the area. They also generally give you business plans, help you to secure financing to some extent, and help you to set things up and get it going. They do this because they are making money selling you the franchise, and they also get a percentage of your profits.
That brings us to some of the negatives. The start-up for many well-known franchises is well over $100,000, although you can get smaller ones for as little as a few thousand. Many of them also require you to purchase inventory and supplies through them. This ensures your fitting into the model and gives your customers pre-knowledge of what to expect.
Another option is to purchase an existing business. If it is a successful business (hopefully you’ve done research to ensure this or have solid ideas on how to improve an existing situation), you will already have a customer base and possibly staff and employees. This will help the transition, as you will have everything already in place as you walk in. Hopefully, the deal you have worked out also includes some training from the current owner or management. The negatives in buying an existing business can include inheriting existing problems and a large outlay of money, depending on the size and nature of the business.
With both of the above options, you also usually have to figure in the cost of maintaining a building, cost of property purchase, or rental costs. Managing staff also presents its own unique issues, so you also need to be prepared for that if staff comes with the business or is required for the franchise.
In the third option, starting a new business, there is a whole different set of advantages and disadvantages. To start out, you do not necessarily have to have your own space to buy or rent. Many small opportunities you can pursue can be done out of an existing home office or with your home computer. You also have the option of being a "one-man band" which eliminates cost of staff but also adds personal responsibility. A way around that is to hire freelance people for your writing, graphic design and business set-up and continuous needs.
A further advantage is that often you can maintain your current source of income, perhaps even being able to taper off the hours worked in your present employment as your own business ramps up. That is a best case scenario. Often, a clean break once the new business has started gives you more incentive to grow it quickly. In either case, it is imperative to have some means of supporting yourself until the business is self-sustaining and eventually also replaces and then exceeds your current income.
Disadvantages to starting your own business can include other items such as needing to provide your own health insurance, hiring an accountant, and legal services.
In any of the three options there are pros and cons. Starting your own business using any of these methods is exciting, exhilarating and scary. Controlling your own destiny and starting your own business is not for everyone, but the road less traveled is often the most fulfilling path to take.
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