If you're planning on starting a new business, you've probably seen a franchise opportunity as well as a business opportunity. And while they are similar in design, there are many important differences that you must be aware of before you make a decision.
But before you begin your search, it's essential that you evaluate your own traits and needs first. What do you want from a business opportunity? Do you like to blaze your own trails, or do you prefer to follow along on a proven path? Do you intend to work full time at your business, or are you just looking for a little cash on the side? Are brand names important to you, or do you believe that with determined sales efforts, any good product can succeed? What about finances?
Do you have a large chunk of start-up capital (or have access to it), or do you need to use a credit card or small savings account to begin? All of these are important things to take into consideration when selecting which type of business opportunity is right for you.
Let's begin by taking a look at the differences between franchises and business opportunities.
A franchise business opportunity will give you a trademark
When's the last time you had a craving for a good donut? If you're like most people, the first thing you would think of is Dunkin' Donuts® or Krispy Kream Doughnuts®. In fact, many people will drive by their local donut shops and drive for many more miles just to purchase this brand. That's one of the biggest advantages to purchasing a franchise opportunity, rather than a business opportunity. Brand names already have a certain trust built with the public and so by selling one of these products, one of the biggest hurdles to succeeding in a business is already met; the public's confidence in the product.
A business opportunity may be less expensive than a franchise opportunity
Since you are not paying for name brand recognition as you do in a franchise, you will likely pay less for a business opportunity. The old adage is true; you get what you pay for. But if you are the type of person who will work your business until it succeeds, then getting in on a ground floor opportunity may just be the ticket for you. It's wise to remember that even McDonalds was, at one time, just another start-up business.
A franchise business opportunity may provide more training
Given that the revenues of franchisers are dependent on the successes of the people who invest in them, they usually provide more training than a business opportunity. Generally, a franchise system will provide an initial intense training course, with on-going support and collateral material. On the other hand, many times all you will receive from a business opportunity is a training guide.
As you can see, the differences between these two types of business opportunities are slight, but important, which is why it's necessary to evaluate your goals as a small business owner before you begin the search. By having clear goals, all of the offers and sales-pitches won't be able to get you off track.