Startups and Franchises business

Startups and Franchises business
Whether you build your own business from the ground up or opt to buy a franchise, there are some key differences to consider.

If you’re entrepreneurial-minded, a pure startup business is the way to go. That’s because you can use 100% of your creative juices 24/7.

In a nutshell, you are the person who:

Comes up with a business idea
Puts together the business plan
Creates relationships with lenders
Tests and perfects your idea
Creates distribution channels
Puts together the marketing plan
Creates policies and procedures
Hires staff
Negotiates the commercial space
Opens the business
As you can see, your plate will be full. The hours needed to start your business will be long and hard. But if you believe in your business idea, and you’re willing to see where your idea will take you, those long hours will be good hours. After all, this is your “baby” we’re talking about here.

Pros and Cons of a Startup

If you’re thinking of starting your own business, based on your idea for a needed product or service, there are a few things you need to know before you dive into the pool.

The Pros

You own the idea
You’re the Creative Director
You retain all of the equity
You can run your business as you please
There are no rules
You keep 100% of the profits
The Cons

Your total upfront investment is unpredictable
You don’t have a clue as to when you’ll break-even
You can’t get a good handle on your expenses at first
Your risk is big, because you don’t know if your idea will work
You’ll be under tremendous pressure to make your business profitable
All in all, when it comes to a startup, the risks are high, but your potential financial rewards can make the risk worth it.


Franchise businesses are quite popular.

When you stop to think about it, the idea that you can open a business up in a short period of time, using a proven business formula with an upfront cost that’s fully disclosed, is attractive. But as you’ll see, franchising is not for everyone.

Pros and Cons of Franchising

Over the years, franchising has enabled hundreds of thousands of people to go into business for themselves. There are many reasons why franchising works. Franchise businesses provide:

A proven business model
A business system that’s been tested and proven to work
Technology that helps you, as a franchisee, stay efficient and organized
Marketing programs you can use immediately
Support from headquarters
A network of fellow franchisees that you can quickly contact when you run into problems
On the flipside, as good as franchising is, it’s not perfect.

For instance, as a franchisee:

You’ll be required to follow the business system and represent the brand as specified in your franchise contract
You’ll be paying royalties to your franchisor for the life of your business
You may have to spend money on things like technology upgrades, re-branding, new store designs and/ the like that your franchisor requires
You’ll only be able to buy products from approved vendors
If the national brand experiences negative publicity, your local business may be affected
Given these points, if you’re thinking about going the franchise route to get into business, you need to make sure you’re comfortable with the restrictions placed on you as a franchisee.

That said, I’m going to answer the question you have running through your head. That question is: “What is a better way to go into business; a startup or a franchise?” My answer is that both ways can be good.

If you have an idea for a business, and you really believe in it, you need to seriously consider a startup.

If you would rather leverage someone else’s business idea to own what you do, and you’re comfortable with following rules, you need to investigate the franchise model.

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