A hot theme at the moment seems to be “Whats the most suitable choice for starting my very own business? Self-employment or buy a franchise?”. These tend to be people who find themselves out of work by way of redundancy or lay off, or still employed and simply wanting a change of way in their working life.
So what would be the benefits and drawbacks of self-employment over a franchise system. Both routes do symbolize a way of working for yourself because regardless of whether you develop a business determined by your own personal idea or buy a franchise, you will still effectively be the owner of the company and will be responsible for whether it is a success or fails. So here are some of the main differences:-
Self-Employment
Pros
All income is yours to administer.
You’re able to work to your own personal ideas and find a structure that works for you.
Satisfaction in knowing that you’re building up a business for yourself, in your own personal way.
Cons
Its well-known that self-employment within the UK has a high breakdown rate with in the region of 4 out of 5 businesses failing within 3 years.
You are going to be building up a brand and reputation from scratch.
A Franchise opportunity
Pros
The NatWest/BFA annual survey consistently reports in the region of 90% of UK franchisees are trading profitably each year. Other countries have comparable statistics on franchising.
You’re working to a business system that ought to have been tried and tested by a franchisor.
Most franchisors provide training and support backup.
The franchise business might have well-known branding and history which you might benefit from.
There are a broad range of franchises for sale obtainable including franchises to suit women, home based franchises, retail franchises and a good number more. You can read some of the franchise successes to find out more.
Cons
There could be an upfront franchise fee in order to provide setup and training costs.
Many UK franchise businesses charge recurring franchise management fees (typically a proportion of earnings or profit) which cover ongoing training and support.
You will often have a contractual attachment to the franchise owner for so long as you work the franchise opportunity.
These are really just an overview as there are other points. Whichever preference you choose its essential to observe that taking on a business calls for determination, perseverance and a lot of hard work!
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