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Retail or Service: Which Do You Prefer?

There are franchise opportunities in at least 75 major industries – in other words, if it’s a business, it’s been franchised! And that’s a huge benefit for franchise seekers because you have a variety of opportunities to choose from. Plus, you can select a business that sells products (a retail business), or a business that sells services (a service business).

Which one do you prefer?

Of course, every business provides services to customers, but it’s important to know if you would be most comfortable owning a retail business or a service business.

Which Work Environment?

It’s equally important to consider the attributes and requirements of retail and service businesses because you’re probably better suited for one than the other. A simple rule of thumb question is this: Do you prefer working behind the counter, or in front of the counter?

Either way, you can’t lose because there are plenty of franchises in both the retail and service sectors. Here are some insights that may help you decide which sector is best for you.

With a retail franchise opportunity:

  • You sell products or goods as opposed to a service that you provide. Of course, food businesses sell both products and service.
  • You spend most of your time in your store displaying products, talking to customers, operating the cash register, etc.
  • A good location, plus your advertising, drives traffic (and sales) to your store.
  • You rely on a team of employees that you recruit, train and manage.
  • Vendors and suppliers come to you.

With a service franchise opportunity:

  • Customers contact you for specific services, i.e. repairs, cleaning, shipping, travel arrangements, etc.
  • Your location may be your home, a small office, or a mobile van.
  • Your location itself may not generate business, and you may need to be adept at marketing and sales. Service businesses often depend on direct selling.
  • You may spend more time away from the office than you do in the office.
  • Customers often contact you by phone or email.

Which business is easier?

It’s impossible to say. Generally, no business is “easy” because there are so many variables to consider, including which type of business appeals to your interests, the viability of the market where you open the business, and the amount of money you want to invest in a franchise. It is fair to say that services businesses are usually less expensive to acquire and operate than retail businesses, especially if the latter includes a retail location and inventory.

Which one makes more money?

Again, it’s impossible to say. Even though retail businesses generally require higher investments to start and operate, they don’t necessarily generate more profit for their owners. Some service businesses are extremely profitable, but they also may be more labor intensive for the franchisee. Once again, it seems more important to know which type of business – retail or service – best suits your interests.

Test Drive The Franchise

Here’s a way to discover whether retail or service is best for you: Test-drive the franchise! Find a retail franchisee that will let you work in the business for a week or two, or during weekends. Do the same with a service franchisee. After several hours of working in both environments, you’ll probably know which environment you prefer. And if you like both environments then find a franchise that combines retail and service – there are many of them, too!