Construction Industry Business Opportunities - The Basics
Franchise ownership is a great opportunity for entrepreneurs to use their skills to build on the foundation of an already established business model. The franchisor provides many of the tools that an entrepreneur needs to get started while allowing them the challenge to grow within this existing model. It’s a model that perfectly balances an exciting challenge and a supported business model.
The Investment Is Key
Although a franchise can often seem like a ready-made opportunity, it does involve significant upfront costs. These initial fees and start-ups costs are part of opening a franchise business, and it’s through this investment that franchise owners show their commitment to the business and demonstrate their financial credentials.
When applying to be a franchise owner, you should fully consider the effects these investments can have. A franchise may seem like a simple turnkey operation, but like any business, much of the growth lies with the commitment made by the new owner. It’s important to carefully weigh thepros and cons.
The upfront costs typically include an initial franchise fee and other related fees like those for training. Additional costs may be needed as well, including everything from rent, employee salaries, and facility remodeling to insurance and working capital for an initial time period of operations. Franchise owners should also be comfortable with the royalty fees and other ongoing fees associated with owning a franchise.
Multivista’s list of costs provides a good estimate of the investment needed to become a franchise owner and how it all breaks down.
These upfront costs are an important part of the franchise deal, so this business model works well for those with the financial resources to invest in growing a business. For those who meet these financial requirements, franchising provides a great opportunity to launch an entrepreneurial endeavor with lower built-in risk.
Building On A Solid Foundation
While a franchise provides a solid foundation to build on, it has some key differences from traditional business ownership. Ceding some degree of control for how your business runs, specifically the end services delivered and the quality of those services, is the nature of franchise ownership. For many entrepreneurs, that trade-off is well worth it.
With a franchise, the owner gets built-in branding, substantial corporate support, and access to the proprietary services, products, and business methods. For entrepreneurs that like to have complete control over all aspects of a business, a franchise may not be the best fit.
Owning a franchise allows you to work for yourself in what many would consider a lower risk environment than traditional start-up businesses. You don’t have to conduct market research or bear the risk of a new idea not panning out. A franchise is a proven concept that has already expanded to several territories. If the franchisor chooses you, it has made an initial determination that you should make a good franchisee. For calculating entrepreneurs who are looking for a good investment, this can be an ideal fit.
Creativity Inside the Lines
Some business owners, though, enjoy the chaos and creativity involved with testing a thoroughly new concept and making it work. While most franchisors appreciate vetting new ideas, this level of experimentation is not available in a franchise environment, in which owners will be required to adhere to best practices, developed by the franchisor with input from existing franchisees. Franchise owners will also be expected to follow the sales, marketing, and operations methods that have been successful in the past and that preserve the quality of the services provided to customers and the resulting reputation of the brand. All of this is laid out in abinding contract.
While a franchisor may not allow franchise owners to create a whole new product or try a radical new marketing approach without approval, they often do offer the opportunity to be a part of an innovative product or business model. Many entrepreneurs pride themselves on being forward-thinking and on the edge of the changing marketplace. It can be difficult to capture the zeitgeist on one’s own, but being a part of a proven franchise corporation, with an innovative service and working with other franchisees and the franchisor to improve the service delivery to customers and model in general, is often the next best thing.
The franchisor can often provide help with everything from staff training to collective buying power to introducing the newest technology to the franchise system. Being a part of a franchise has many turnkey elements. The franchise owner receives all the benefits of the hard work the corporation has already done developing their product or service.
While being a franchise owner isn’t for everyone, it can be the perfect opportunity for those with the necessary resources to invest and the right balance of entrepreneurism and the desire to be part of a larger organization. In exploring franchising options, be cognizant of all the costs and requirements involved. Being a franchise owner comes with many responsibilities, but if you choose the right opportunity you can also be part of something innovative that has significant profit and growth potential.