There are a variety of SBA loans that are available to...
Starting a business from scratch may be more of a challenge than you’re willing to accept. Many people are not cut out for a startup business and would be more comfortable buying an existing franchise. Have you considered the advantages? Here are four to think about.
1. Avoid Starting From Ground Zero
While some people thrive on creating something from nothing, many others do not. In fact, that’s what may be keeping you from buying a franchise. If you can’t envision a business where no business currently exists, the unknown future may be too much for you. After all, you’re going to invest a chunk of money to start a business; if you can’t imagine the outcome, including profit coming back to you, why would you venture the risk? Buying an existing business allows you to evaluate a business that is already functioning, and that’s much easier than trying to evaluate a business that doesn’t yet exist.
2. Don’t Be A Pioneer
You can always tell the pioneers by the arrows in their backs! Being the first to do something, even in a franchise network that includes previous franchisees, isn’t easy or comfortable. Yes there’s an argument to be made that other franchisees already ventured before you and succeeded, but that doesn’t mean you will succeed. Those other franchisees may have been more comfortable as pioneers. If you’re not that comfortable, chances are you’re not going to buy a franchise – unless you buy an existing franchise!
3. Evaluate Tangibles
When you evaluate the probabilities of your new, yet-to-exist franchise, you’ve got to be comfortable with a lot of guesswork. Franchisors can assure you that other franchisees were in a similar position and succeeded, but that may not settle your nerves. It may also be true that other franchisees were in a similar position and did not succeed. For people who are not comfortable with guesswork, it makes sense to buy an existing franchise because you can evaluate tangible information. For example, how much money does the business throw off in profit each year? That information is already known and an existing franchisee can share it with you.
4. Eliminate the Guesswork
How long will it take to find a location? How long will it take to build my unit? How will I find suppliers? How much inventory do I need? How many employees do I need? How will I attract customers? How much profit will I earn year one? Year five? . . . The questions are endless when you’re starting a business from scratch and no one can answer every question with a definitive answer. But all that guesswork goes away when you buy an existing franchise.
Why Not Buy An Existing Franchise?
There’s one significant drawback to buying an existing business: it will (probably) cost more money! It’s less expensive (but perhaps riskier) to start a new franchise than it is to buy one that already exists. The existing franchise has already proven itself. There’s a location, there are products, there are employees and customers. The business is already functioning and the owner is taking home money. To gain those advantages you’ll have to pay more.
Where To Find Resales
Every franchisor has resales. Sooner or later, existing franchisees are ready to retire or change business concepts. You can find resale opportunities at FranchiseResales.com, as well as by asking franchisors directly. You may accelerate your plans to become a franchisee once you realize that you can avoid the unknowns in franchising by going with an established business.