The Big Question: Self Employment Or A Franchise Business
A hot matter at the moment appears to be “Whats the best option for starting up my very own business? Self-employment or buy a franchise business?”. These are typically people who are out of work due to redundancy or lay off, or still in work and just desiring a change of focus in their working life.
So what are the advantages and drawbacks of self-employment when put up alongside a franchise opportunity. Both routes do represent a method of working for yourself because whether or not you build a business founded on your own personal idea or buy a franchise business opportunity, you’ll still in fact own the company and will be responsible for whether it is a success or fails. So here are some of the key differences:-
Self-Employment
Pros
All income is yours to administer.
You can work to your own personal ideas and find a structure that works for you.
Satisfaction in knowing that you are building up a company for yourself, in your own personal way.
Cons
Its acknowledged that self-employment in the UK has a high breakdown rate with around 4 out of 5 small businesses failing inside 3 years.
You’ll be building up a brand and reputation from scratch.
A Franchise system
Pros
The NatWest/BFA annual survey consistently reports in the region of 90% of UK franchisees are operating profitably in any given year. Other countries have similar figures on franchising.
You are working to a business formula that ought to have been tried and tested by a franchisor.
Most franchisors offer training and support backup.
The franchise business may have well-known branding and reputation which you could benefit from.
There are a broad range of franchises obtainable including franchises to suit women, work from home franchises, retail franchises and many more. You can read some of the franchise success stories to find out more.
Cons
There could be an upfront franchise fee to cover setup and training costs.
A number of UK franchises charge ongoing franchise management fees (quite often a percentage of turnover or profit) that cover ongoing training and support.
You will often have a contractual attachment to the franchisor for so long as you operate the franchise system.
These are really just a rough guide as there are other points. Whichever option you choose its important to notice that taking on a business requires determination, commitment and a good deal of hard work!
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