Why this may be the WORST time to set up your own business...but the BEST time to buy a franchise
Recently we read this article which stated that, according to online accounting software provider FreeAgent, even though 55% of people dream of setting up their own business in the future, ‘70% of British people were reluctant to start their own business in the current economic climate.’ (Aug 2022).
The Results: (FreeAgent 2022)
- The financial burden of setting up (50%)
- Confidence (35%)
- Managing business finances (31%)
- Dealing with tax (31%)
- Complying with regulations (26%)
- Lack of government support for freelancers/small businesses (26%)
- Finding available staff (18%)
- Dealing with technology (10%)
As a business trying to sell franchises, we won’t deny, our hearts sank a little when we read the headline until we read further into the article and realised it was actually, inadvertently, advocating franchising. Almost every single thing they listed as a negative was something bypassed or made much easier by owning a franchise.
As you can see, the survey listed the exact reasons people were afraid to start up their own business, and without the backing of a franchise, we’d tend to agree there are some pretty compelling reasons not to, but as you will see in our responses, we’ve been able to dismiss, debunk and destroy almost all of those fears and demonstrate that self-employment is still within people’s grasp but in a much safer way, using the franchising system.
The financial burden of setting up (50%)
When you buy a franchise, all the big expenses have already been taken care of: we have built the brand, the logos, the systems, the website, marketing materials,the legal documents (contracts, agreements, insurance etc), PR and advertising etc. We’ve established our position on Google, optimised the website for SEO, built the social media platforms, got the followers and we know our marketplace inside out. We’ve made all the costly mistakes, many over the years, precisely so you don’t have to.
Essentially, when you buy a franchise, you are buying a “business in a box” which includes all the above and more including initial training and an operations manual. We also include a three-month marketing campaign to get your business off the ground.
All of this is usually included in your initial franchise fee, and then an ongoing monthly MSF (Management Service Fee), which is based on a percentage of your turnover, to cover the ongoing support services provided to all franchisees. At the Cat Butler, we waive your monthly fee for the first three months while you get started.
Starting a business on your own can indeed be daunting, but not with a franchisor next to you. From the moment you pick up the phone to make that first enquiry, they are in your court. They wouldn’t let you buy one of their franchises if they didn’t think you could succeed. No franchisor wants failures on their hands, it’s bad for business, bad for the brand and bad for their reputation, their success is dependent on yours, so they will be with you every step of the way, helping you to build a successful business that suits your goals. It’s like having your very own business coach right beside you, cheering you on.
Managing business finances (31%)
When you first buy a franchise, you have a period of training with us. During this time, we teach you how to manage your business finances – we may even have an accounting package for you to use and we are always on hand to answer questions. Remember, we’ve been running this business for years and helping other franchisees through the system; even franchisees who had never done any finances before, are now happily looking after their own accounts with our help and guidance.
Dealing with tax (31%)
As above, we will guide you through this process, introducing you to an accountant if you don’t already have one.
Complying with regulations (26%)
We’ll have all the regulations and processes nailed. If you need a license, a registration, or a permit, we’ll get them for you and let you know the rules and regulations you must adhere to. We send you away from your initial training with a large manual, explaining every single detail about how to run your franchise, so you can either look up the answer or give us a call.
Lack of government support for freelancers/small businesses (26%)
This was disappointing, but it was really only a problem during COVID. Global pandemics aside, the UK is well set up for small business owners. There are many tax breaks you can benefit from including - including hiring other family members, splitting your income in different ways, buying equipment or restructuring your home and benefitting from tax advantages in doing so. Check with your accountant or financial advisor.
Finding available staff (18%)
Not all franchises need staff, or certainly not at the beginning. When you are ready, we can advise you on the best places to advertise for staff (who will be self-employed), how much to pay them and all the legal requirements when it comes to recruitment.
Dealing with technology (10%)
Although you will need a basic working knowledge of computers and emails, remember we have done all the hard technology work for you. We have built a website that we maintain, you don’t need to do anything. We’ll build a page for you on the website that your clients will be directed to when looking for your service and we will maintain the company’s social media channels. From day one your business will look highly professional.
As if worrying about the practicalities of starting your own business aren’t enough, according to a survey carried out by BPI auctions, psychological factors are causing potential new business owners great concern too. Apparently, fear of failure and a lack of confidence are holding them back – time to break out some more franchising facts:
The Results (BPI Auctions)
- Not attracting enough customers 49%
- Finances 39%
- ‘What if everything goes wrong?’ 36%
- Not earning enough to recover an investment 32%
- Not knowing where to start (17%)
- Failing the family (14%)
- Not being an expert (14%)
- Not being believed (11%)
- Being considered "crazy" (5%)
- Being incapable of handling success (4%)
Not attracting customers (49%)
As an established and successful business, we know our marketplace, we know how well our services sell and as ethical franchisors, we wouldn’t sell you a territory that we did not know had the potential for you to build a profitable business. At The Cat Butler, your launch package comes with a PR launch and a three-month digital advertising campaign in your local area (including the 1st page of Google). It also includes a leaflet drop to tens of thousands of properties so everyone will soon know about your business. You will need to back this up by being proactive on social media, word-of-mouth advertising and hyper-local publications/events in your area. Many franchises rely on repeat business – so in time, as long as you keep delivering a first-class service, you will build up a good customer base. Our website and high online visibility will help generate hundreds of new client enquiries for your business from month one. Our franchisees also benefit from our excellent reputation and our hundreds of 5-star online customer reviews and personal recommendations, which drive customers daily to our franchisees’ businesses.
Very few of our franchisees simply write us a cheque to buy their franchise, most approach the bank for a loan which, they are likely to approve. Banks like helping people buy franchises as history shows them that franchising is a safe business model (see more below).
"What if everything goes wrong?" (36%)
If you are starting up a business completely on your own, we’d agree, a lot could go wrong. The statistics aren’t on your side. According to research by Fundsquire, a global start-up funding network, 20% of small businesses fail in their first year. Around 60% of small businesses fail within the first three years.
However, according to the British Franchise Association’s last survey 2018: ‘Failure rates for franchises remain very low with fewer than 1% per year closing due to commercial failure.’ It is figures like these that make banks so happy to lend to franchised business over stand-alone small businesses and that make us very confident when we say that your franchise business is very likely to succeed. Franchises succeed on franchisees repeating the business model. If you work hard and follow the model, you should be fine.
We have regular meetings with you to check your figures, see how you are doing, flag up any problems and spot any patterns; if you are having problems, we will see them coming from a long way away and help you take action to address them.
Not earning enough to recover an investment (32%)
When buying or starting any business you have to write a business plan; you’d be a fool not to have one and no decent franchisor would take you on if they didn’t think you could earn enough to build a successful business, let alone cover your investment and don’t forget, your ‘buy in’ cost of a franchise is much lower than starting up on your own (and achieving the same levels of brand recognition/Google rankings).
Often with a franchise you start really making big money when you take on staff and go from a one-person business to a management franchise; after all, there are only so many cats you can visit in one day but imagine how many you could cover with five members of staff? We are confident you will make your money back in as little as 6 - 12 months, as long as you put in the hard work and follow the model.
Not knowing where to start (17%)
A great place to start is the British Franchise Association. Their members are committed to ethical franchising, which means their business models have been thoroughly vetted to ensure their franchisees can make a decent, sustainable profit and build solid businesses.
Have a think about what you enjoy –if you would like to turn your passion for cats into a career obviously The Cat Butler is one to look at, or it could be a cleaning franchise, a children’s franchise, or a food-related franchise, there are over 300 to choose from at the bfa. www.thebfa.org
Also check out www.whichfranchise.com www.whatfranchise.com and www.elitefranchise.com which have lots of features, profiles and ‘day in the life of’ articles about franchising.
Visit some individual franchise websites, download their brochures and have a chat with a few franchisors, they will be only too happy to talk you through their options. If you show enough interest, you’ll be invited on a ‘Discovery Day’ where you will be invited to spend the day with an existing franchisee to see life on the ground. This is an excellent way to see if the opportunity is right for you.
Failing the family (14%)
Everyone deserves to be happy and if being self-employed is going to make you happy then we are fairly sure your family would tell you to go for it. If you buy a franchise from a bfa registered franchisor, then you are doing everything you can to do it safely and responsibly. Many people go into franchising to get a better work-life balance and end up being free to spend much more time with their families.
Not being an expert (14%)
PURRFECT! We don’t want you to be an expert – we want you to have the passion to own your own business, be willing to work hard, and we’ll teach you the rest. Most franchisees have no experience in the franchise they buy. Obviously, you need to ‘like’ the area you are going into; for instance, we’d never recruit a Cat Butler franchisee if they didn’t genuinely love cats, but we don’t expect them to know how to run a cat care business.
Not being believed in (11%)
Franchising is full of people who were unhappy in their old jobs and bought a franchise, even when they weren’t 100% sure they could do it. They make some of the most successful franchisees. We teach you everything you need to know, and you have an entire network of other franchisees to talk to, all of whom have been in your position before and will understand and allay your fears. If we let you buy one of our franchises, trust us, we believe in you!
Being considered "crazy" (5%)
There’s nothing crazy about making a sound investment in your future. The financial figures for franchising stand for themselves. Far from being crazy, it is a wise financial move. Did you know you are also far more likely to be able to sell your franchise business than your own ‘start-up’? Because it is part of a recognised, national brand, you can easily sell on when it is time to retire or do something different.
Being incapable of handling success (4%)
It may seem strange, but some people do have an issue with this, they aren’t expecting to do so well, so when things start going well, they get a little nervous. Have no fear, we are there to support you, talk to you, to guide you. We have regular meetings to decide where your business is going. Franchisees who are doing very well usually decide to buy an adjoining territory to double or triple the size of their businesses. You will never be on your own, so fear not.
Don’t be put off – investigate franchising now
If you were one of the 70% of people who were put off starting your own business in this economic climate, we hope this article has given you something to think about, and if you are crazy about cats, we’d love to hear from you! www.thecatbutler.co.uk
Spread the word
A word to our fellow franchisors, it would appear that the UK needs us like never before. It is time for us to redouble our efforts to educate the British people on the benefits of franchising and help them achieve their dreams of self-employment. Feel free to repost our article, the sector as a whole will benefit from sharing these verifiable facts and irrefutable truths.
Interested and want to know more about The Cat Butler?
The The Cat Butler profile outlines all aspects of their franchise opportunity and allows you to contact them for further information or to ask a question.