5 questions you need to ask yourself
Both are challenging options. You’ll need a whole lot of drive to succeed whichever one you choose.
But there are a few key points you can consider which will help you make your decision…
Here we’ll ask a few questions which make it easy to compare and contrast buying a business and starting your own business:
Q1) Are you confident you can secure your own finance?
Look at it from the point of view of a moneylender. Would you prefer to lend your precious cash to:
1. A potentially risky new start-up?
2. An established business with a proven track record of income?
Securing funding is almost always easier for an existing company.
Q2) Do you already have your own network?
Establishing your own network takes a lot of your time and effort in the early days of opening your business. Just think:
⚫ Who will your suppliers be?
⚫ Who will your marketers be?
Buying a franchise means you’ll have these relationships in place already. Plus, you may be able to get goods and services at preferential rates if your network has existing deals or does a lot of business with a particular supplier, for example.
Q3) Do you want to fund your own national marketing campaigns?
The best franchisors will fund at least part of their network’s marketing. Some may take control of all of it on all channels – or run the kind of national marketing campaigns which you’d never be able to afford as a new start-up.
That’s some serious exposure for you right from the start.
Q4) Do you have a special market niche in mind?
If you’ve identified a market niche where there’s little or no competition, you might have spotted the perfect place to start a new business.
On the other hand, if you have skills and experience in an industry where there are already several well-known multinational brands…
Well, making space for yourself might be very difficult indeed. Considering any franchise opportunities might be a better choice here unless you have some special ace up your sleeve.
Q5) Do you want to develop your own processes?
You might already have clear processes in mind for how you want your company to run. You might have proven their effectiveness in another enterprise you’ve been in charge of. Or be absolutely convinced that your way will be better than all of your competitors’.
Let’s not forget though, that as a franchise your ability to innovate is lauded, not stifled. Yes, you need to be willing to follow the processes which your franchisor has established.
But if you think you have a refinement or a better idea, it’s a very poor franchisor indeed who won’t want to listen to you.
New business vs existing business: which is best for you?
There’s no one right answer to this question. Because for all of its advantages, when becoming a franchise owner:
3. You still have to have the same will to succeed that any new business owner needs.
4. You need to be willing to work in concert with your franchisor, their processes and the other franchisees in the network to get the best out of it as you use it to grow together.
But if you have and can do both of these, considering the questions above should help you decide whether you should start a new business or buy an existing one. Whichever option you choose, MBE has both existing and new business opportunities available.