Should You Buy a Franchise or Start Your Own Business?

Are you hoping to embrace your entrepreneurial spirit and become a business owner? 

As aspiring leaders search for increased flexibility and exciting opportunities to innovate and build a legacy, many drop their careers and opt to own a business. But there are several paths to becoming a business owner: you can start a business from scratch, buy an existing one or invest in a franchise. 

So, which path is right for you?

The Benefits of Buying a Franchise

Dave and Missie Carlile ran their own heating and cooling business in Indianapolis for 22 years before deciding they couldn’t continue. They would either need to change their business or quit. Their decision? To convert their business into a Heating + Air Paramedics franchise.

“The struggle of trying to grow our company started to become too much for just the two of us to handle,” said Dave Carlile. “So Missie suggested we look into a franchising opportunity.”

The couple quickly found the franchise model to be the solution to the issues they faced with their business.

“Small referral companies like us aren’t what they used to be,” said Dave. “Google is the new phone book, and if you’re not heavily present there, you’re going to struggle. With the guidance from Heating + Air Paramedics, we get the support, marketing tools and presence that most larger companies have.” 

Franchises offer a tried and true model for opening a business. By investing in an existing, well-established brand, you can bypass many of the sticking points that independent owners face. You can also enjoy the added benefits of having a loyal customer base immediately upon opening, quickening the profitability of your business venture and increasing the likelihood of success.

According to the U.S. Bureau of Labor Statistics (BLS), roughly 20% of small businesses close within the first two years of opening, 45% during the first five years and 65% within the first 10 years. Only 25% of new businesses survive for 15 years or more. Franchising offers a safer option for entrepreneurs that want access to guidance and support each step of the way.

When you sign a franchise agreement, you pay the franchisor a fee to license the right to use the name and processes of the business. From then on, most franchisors will assist you with selecting your location, building your store, connecting you with suppliers, selecting and training your staff, and getting your business running.

As a franchise owner, you won’t need to reinvent the wheel because the goal of the franchisor is to deliver a consistent, high-quality experience for consumers across all of the brand’s units. 

The Benefits of Starting Your Own Business

Owning a small business allows owners the freedom to engage their creativity. Building a business from scratch works best for those seeking financial and personal freedom who have a solid understanding of running a business and are honing a lucrative idea.

If you have an innovative idea, you may be able to turn it into a business. Sam Walton did it with Walmart, Mark Zuckerberg did it with Facebook and Jeff Bezos did it with Amazon; many others have done the same. With startup costs as low as $10,000, having your own business — potentially even headquartered in your basement or the trunk of your car  — can be significantly less expensive than the fees and recurring costs associated with franchising.

If all goes well, your brand may someday become its own franchise. While the risks of starting a business may be greater than franchising, the potential ROI can be incredibly high. If you want a shot at the big leagues more than a steady paycheck, launching your own business may be the right move for your personality. 

Finally, and most critical for many budding entrepreneurs, building your own business makes you the boss in every way possible. You make every decision, create your schedule and run operations precisely to your liking.

For the innovative entrepreneur willing to take a risk, there is limitless potential when starting a business.