Business Education

Common Franchise Pros and Cons

Franchises are a great way to get into business. But, these models aren’t for everyone. There certainly are pros and cons to the systems, regardless of industry. However, it’s an effective way to start a company and it’s a quite popular method. For instance, there are approximately 400,000 franchises in the United States alone, according to the International Franchise Association. These employee nearly 10 million people and range across 75 different industries. But, is it for you?

Most Common Franchise Downsides

Okay, let’s begin with downsides of owning a franchise. Perhaps the largest can easily be capital expenditure or start-up costs. Some are quite large but others are relatively inexpensive. Along the same lines are the fees. You’ll pay for marketing materials, royalty payments, and more. Speaking of costs, you might be subject to sole vendor sourcing. Meaning you must purchase certain materials and supplies from approved vendors.

If buying an existing business doesn’t sound right for you but starting from scratch sounds a bit intimidating, you could be suited for franchise ownership. New franchisees can avoid a lot of the mistakes startup entrepreneurs typically make because the franchisor has already perfected daily operations through trial and error. —Entrepreneur.com

You must also comply with the proprietary standards, set by the franchisor. Now, you might have some flexibility with said standards, but it’s usually limited. Additionally, you could also be locked into a contract. Then, there’s the ongoing success of the franchisor. In other words, the “parent company” must continue its track record. And then, there’s always risk involved with any endeavor.

Biggest Franchise Advantages

Of course, franchises have plenty of upsides. If they didn’t, there’s no way these models would routinely demonstrate such high levels of success. People simply wouldn’t waste any time (or money) and the entire notion would eventually disappear. But, franchises do largely succeed. So, here are the biggest franchise advantages:

It’s an already established brand. Here’s what attracts so many entrepreneurs to buying franchises — it’s a known quantity. Consumers are already familiar with the brand and its products and/or services. Which means you don’t have the burden of establishing it from scratch.
Marketing and operation support. Another big benefit is that you’re not out on your own. You receive marketing and operational support from the franchisor, which is a huge plus.
Proven system of employee training. Along the same line is there’s already a working system in-place for employee training. You don’t need to work your way through trial and error to refine a workable training system.
Access to proprietary operating methods. Speaking of an in-place system, you also don’t have to try to peel back the veil to learn how the system works. You’ll get all the information you need to open and run the business with actionable guidelines.

What other franchise pros and cons would you add to the list? What are your thoughts about buying a franchise? Please comment and share your ideas!

Interested in learning more about business? Then just visit Waters Business Consulting Group.

Like this article?

Steps to Starting a Successful Side Business

May 16, 2017 No Comments

There’s nothing wrong with supplementing your income, or, to start on a journey to pursue a dream. A side business is an avenue for both, but, like most full-time employees, you’re wondering just how to get started. It might surprise you, but it’s not just about the logistics. While the nuts-and-bolts are certainly vital, you’ll also have to deal with other things. In other words, it’s not just about carving out the time, being able to deliver on your promises, but also, finding personal fulfillment. Too many people start side businesses, burn the candle from both ends, and wind-up burning out. What you do need to understand is that, especially early on, the right mindset is key to future success. You’ll probably start out on fire, ready to tackle whatever comes your way. Inevitably, there will be problems, whether big obstacles or temporary setbacks. If you keep in a positive frame of mind and learn from mistakes, you’ll go much further. You’ll also need a workable game plan that rewards each achievement step you reach. Steps to Starting a Successful Side Business First, you must consider a few things, such as: is this a needed service or product? Can I deliver on a tight schedule? What competition will I face? Is there room for scaling-up? Of course, the biggest question will be can the time invested turn a profit and if not immediately, when will it realistically do so? People’s initial motivation is often money – they want to save more, pay off debt or simply afford a better lifestyle for themselves and their families. But then, it often morphs into something deeper, as people realize that their side businesses allow for a creative expression and satisfaction that can be hard to find in their full-time jobs. —Entrepreneur.com Next, understand and accept that you’ll have two demanding jobs. That’s going to bring some stress, it’s just unavoidable, and, it will also zap your energy. The trick is to set your sights on your goals and be convinced they are within reach, it’s okay if it takes time to realize. Don’t make the mistake of rushing because you’ll likely sabotage yourself and be willing to give it a solid test run, knowing that it might not work out. If you’re willing to make the commitment, get past the planning and taking action, you can make it work. Getting down to the nitty-gritty, the following steps are what you’ll need to do in order to start a successful side business: Reframe your way of thinking. Don’t let your day job be an obstacle, instead, think about all the positive things it provides. First, it does put a constraint on you, but that’s a good thing because it spurs creativity. In addition, look at your full time position as a funding source and a place to sharpen your skills. Determine workable, key actions. You’ll need a written list of workable, key actions — things that will move your idea forward, but don’t just keep ruminating. Every step should move you in the right direction with purpose. Restructure your schedule. This probably sounds too obvious, but too many people who try to start a side business, fall prey into thinking their schedules are already set. Dedicate routine times to work your side gig and be willing to make adjustments as necessary. Network whenever you can. If circumstances allow it, you can network at your full-time position, letting co-workers know what you’re offering. If not, there are plenty of other venues: your child’s school, your church, your gym, places you volunteer and visit often. Entrepreneurs are one of America’s greatest assets! Whether you are starting a business part time or full time, now it’s your turn to be an All American Entrepreneur while achieving your goals and growing our economy one great business idea at a time! [shareaholic app=”follow_buttons” id=”26833294″]

The Future of Trade Businesses: Building Companies That Last

March 9, 2026 No Comments

The trades are entering a new era. The next decade will bring major changes in workforce demographics, technology and business models. Companies that adapt will thrive. Invest in leadership Future trade businesses will rely on strong leaders who can manage teams, develop talent and maintain culture. Leadership development should be a priority for every growing company. Develop systems Successful businesses rely on systems that allow them to scale operations while maintaining quality. Processes for training, project management and communication help companies grow sustainably. Prepare the next generation Ultimately, the future of the trades depends on the next generation of workers. Companies that invest in recruiting, training and mentoring young professionals will shape the future of the industry. The trades have always been about building things that last. Now it’s time to build businesses that do the same.

What to Do When Your PPP Money Runs Out

May 7, 2020 No Comments

What do businesses do when their PPP or Payroll Protection Program funds run out? While small companies can apply and receive relief, that money is only finite. It will go just so far before it’s gone. And, once it’s gone, it’s gone for good. Even organizations with business interruption insurance benefits have limited resources. Eventually, the cash will run out. So, what do small businesses do then? PPP Loan Forgiveness Only Solves One Problem It’s important to remember that PPP loan forgiveness — while most certainly helpful — merely solves one problem. Meaning, there are still other debts and obligations to pay and to meet. That alone reveals the fact there’s a lot more to doing business than just compensating employees. Vendors, contractors, and others also need to be paid. The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. —U.S. Small Business Administration This gets to the heart of the larger issue — the inescapable reality of the business world. Put another way, if someone paid off one of your personal debts and you had five, six, or ten more, while that’s a blessing and it’s appreciated, it does not get you totally out of debt. Businesses don’t operate that way because there’s always additional obligations. What to Do When Your PPP Money Runs Out Since businesses stay in a cycle of dynamics, with revolving credit and monthly bills, and they apply and receive PPP money, what can they do once those funds are gone? Here are a few suggestions that might prove helpful to your business: Offer invoice financing. Instead of requesting (or demanding) the entire invoice amount to be paid, give them the option to finance their outstanding balances. You can charge a small fee and/or interest rate — so long that it’s legal and ethical. Ask suppliers for extensions. For businesses that owe other businesses money, it’s worth a shot to ask for some more time or at least try to establish payment arrangements. This will help to take off a little pressure and to free up some cash. Review personnel staffing choices. Most businesses already have or will soon, be forced into this scenario — assessing which team members aren’t essential. It’s a tough spot but because employees most always represent the largest expense, this can’t be ignored. Consider liquidation or selling equipment. Another thing you can do is to sell off non-essential equipment, if available. Or, liquidate some inventory or materials. These are all difficult decisions but they could mean the difference between staying in business and going out of business permanently. Offer new services that are in demand now. Look at what services are in demand now that may be in line with your service offerings or a close extension thereof to provide immediate cash flow. Quickly shift to provide those services by promoting them to your current customer base and use social media to get the word out. Several industries and businesses have done this in recent weeks. What other suggestions do you have? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.