Franchise 24/7

Starting Your Own Business

Going into business

So you're thinking about starting up in business. Good for you. Deciding to leave a secure job to become your own boss is life changing. And such a move is as daunting as it can be rewarding.

Whether you're considering launching a new business or running a franchise, there are generic requirements essential to your success.

You'll need to ask yourself seriously whether you have the necessary commitment. Without it, you won't succeed in any business venture. You'll also need to be healthy and able to work long hours; cope with the pressure and worries that come with being in business, be willing to invest your own money, and have the backing of your family.

Owning OR Franchising

So you know you want to start up in business… but there are several ways to achieve this. You could go it alone and start your own business - selling a new product or service in a competitive market place. Or you could invest in an established brand, where a market already exists, running a franchise.

Both methods appeal for different reasons. Which option you take will depend on various factors, including what suits your plans and aspirations and how much risk and pressure you are willing to take on.

Owning a business or franchising one offers exciting opportunities but neither option comes without its challenges. Being aware of the pros and cons of both will help you make a more informed decision.

Pros of having your own business….

• You're at the helm controlling everything
• You have the freedom to negotiate any deal you want
• You can grow and expand as you see fit
• You can alter products and service offerings
• You don't pay commission or fees

Cons of having your own business…

• There is no business support network
• The risk of failure is higher
• There may be no or little demand for your products or services
• You'll be in competition with others
• It can be difficult finding a good location/premises

Pros of franchising…

• There is a proven market for the product/services
• You are part of an established brand with sales history
• There is an existing supply chain
• It is easier to find premises
• Advice and training is available

Cons of franchising…

• You have less flexibility to grow
• Fees are payable to the franchisor
• You are limited by franchise terms
• You are tied by fixed suppliers and rates
• You'll face competition from new franchisees

Managing risk

No business venture, owning or franchising, is without risk. Consider how much risk you're comfortable with. For example: How much will you borrow? What can you afford to lose? What are the repayment amounts and period? Do you enter a new market with a new product? Is it a mature or declining market? Does technological change drive your market?

Commitment to succeed

Whether you're a student fresh out of university or an employee ready for a change of career, starting your own business requires different skills and a strong work ethic.

Commitment and determination will be key to your success. Just as important is support from a spouse or partner. Long hours and hard work, especially in the early days will take its toll on family life.

Speak to friends or family who have experience of running a business - their advice may help you decide whether going into business is for you.

Some facts & figures…

Here are some interesting stats courtesy of the British Franchise Association (bfa) & Natwest bank.

* UK franchise industry is worth £10.8 billion

* Over 10 year period, UK franchise systems increased from 541 to 781 ( 44% Growth )

* 93% of UK franchisees report profitability

* The average turnover for a UK franchise is £323,000

* The average amount borrowed to fund a UK franchise is £50,000

For full industry figures, click here.