10 Myths Surrounding Cheap Small Business Franchises
10 Myths Surrounding Cheap Small Business Franchises
1) Franchises Are Guaranteed To Succeed.
As any math or science professional will tell you, there is a great deal of difference between probability and certainty. Some estimates gauge that franchises have a 92% success rate, while more than half of non-franchised small businesses tend to collapse within the first five years of operation. Franchised businesses, therefore, are much more likely to succeed, but that’s all: there is no guarantee on anything.
2) Small Business Franchising Lets You Be Your Own Boss.
One of the most common reasons people have for wanting to start a franchise business is to be their own boss. To some degree they are, at least if "being your own boss" means that franchise owners get to determine their own schedules, choose their clients, and hold sole responsibility for the success of their operations. However, because the small business concept, model, procedures, products, and services are all in the hands of the franchisor, and owners have to play by their rules, franchisees do not have as much control as "being your own boss" might imply.
3) Higher Priced Small Businesses Provide A Higher Income.
This is simply not true. The income potential of a business is based on the functionality of the business model, the talent and drive of the franchisee, demand for the product, current market trends, and many other factors that have absolutely nothing to do with how much was spent to purchase the business for sale.
4) Higher-Priced Businesses Have Better Business Plans.
A little more accurate than myth #3, this notion still leaves out some of reality’s complexity. A steep price tag on a franchise may be indicative of a company with a stronger business model and a larger, more involved central team, but it may also simply be a marker of a franchisor who wants to make more money up-front, rather than make more money over time. Only looking at the business system itself will tell you whether or not it’s a good one.
5) Recognizable Brands Make The Best Franchises.
There is something to be said for working under a name that the average person recognizes, and most of what can be said for it is that it makes marketing a great deal easier. Still, being a relatively unknown business is not necessarily a huge setback, as long as the franchise business comes with a great business model and marketing strategy. Particularly in home based business, there are few, if any, truly big-name franchises, but that doesn’t at all mean that there is a low ceiling on the possibility of success.
6) Buying A Franchised Small Business Is Cheaper Than Starting A New Business.
While this is true in some cases (vending machines for example), the average small business franchise will require a bit more of an investment on the frontend. A franchisee is often purchasing a business model that has gone through years of refinement, comes equipped with everything necessary to begin work, a fulltime staff ready to help 24/7, and sometimes even an introductory client list, all of which comes with a financial cost that the franchisee is partially responsible for. It’s worth it, of course, but it’s probably not cheaper than going it alone.
7) Low On Cash? You Should Buy The Cheapest Business Possible.
The cheapest business opportunity may be the best choice in some situations, but no business is the best simply by virtue of being the cheapest. It depends very much on how well the business is designed, how well it fits with the experience and talents of the franchisee, and how the market looks. Don’t just buy the cheapest to save a few hundred dollars; buy the best, even if it costs a little more. A business should be a commitment for the foreseeable future, so in many cases, the money you save up front will pale in comparison to the value gained by buying the right franchise, not just the franchise with the right price.
8) Working By Yourself Puts Everything On Your Shoulders.
Though the franchisee is ultimately responsible for the success of his business, whether it’s work at home or at an office location, the beauty of running a small business franchise is that there is always a central staff ready to back you up whenever they’re needed. The popular saying is that "you work for yourself, not by yourself."
9) Cheaper Businesses Require A Lesser Time Commitment.
Some people purchase a less expensive franchise hoping that it means they won’t have to commit as much of their time to it. In reality, financial expense does not equate to time expense. No matter what a franchisor or broker may say, all business opportunities require a sacrifice of time, period.
10) Small Businesses Are At The Mercy Of Their Clients.
The old saying is a pervasive one: "the customer is always right." That concept has convinced some businesspeople that particularly small businesses and work at home businesses need to always appease their clients to stay in business. "The customer is always right" may be a good thing to tell employees who have a tendency to spout off at the mouth, but it’s not a universal truth; sometimes the customer doesn’t have any idea what’s right, and it’s up to the owner to determine what’s best for the business, even when a customer may disagree.
There are many ways that facts become skewed and myths about cheap small businesses begin to raise their ugly heads, but untruths need to be curbed quickly. The longer that lies, even the nice-sounding ones, influence you, the less productive your business will be. Whenever you hear a report about franchise business of any size or cost, go to the source, not for hype, but for facts.
10 Myths Surrounding Cheap Small Business Franchises - To learn more about this author, visit Candice Clem's Website.
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From the Grimm brothers’ shoe-making elves to the pantheon of greek mythology, there are a plethora of stories people tell to explain what they don’t really understand. Not all of our myths are as fantastical as centaurs and trolls, though; some are actually far more boring. And ironically, it’s often the most boring myths that cause the most confusion and fear, like the host of myths surrounding cheap small business franchises. With just a little misinformation, businesspeople are often driven to a completely unfounded view of those small businesses with cheaper initial prices, but with a little correction, all that can be remedied. Here are 10 of the most prominent misconceptions about cheap small business franchises.
1) Franchises Are Guaranteed To Succeed.
As any math or science professional will tell you, there is a great deal of difference between probability and certainty. Some estimates gauge that franchises have a 92% success rate, while more than half of non-franchised small businesses tend to collapse within the first five years of operation. Franchised businesses, therefore, are much more likely to succeed, but that’s all: there is no guarantee on anything.
2) Small Business Franchising Lets You Be Your Own Boss.
One of the most common reasons people have for wanting to start a franchise business is to be their own boss. To some degree they are, at least if "being your own boss" means that franchise owners get to determine their own schedules, choose their clients, and hold sole responsibility for the success of their operations. However, because the small business concept, model, procedures, products, and services are all in the hands of the franchisor, and owners have to play by their rules, franchisees do not have as much control as "being your own boss" might imply.
3) Higher Priced Small Businesses Provide A Higher Income.
This is simply not true. The income potential of a business is based on the functionality of the business model, the talent and drive of the franchisee, demand for the product, current market trends, and many other factors that have absolutely nothing to do with how much was spent to purchase the business for sale.
4) Higher-Priced Businesses Have Better Business Plans.
A little more accurate than myth #3, this notion still leaves out some of reality’s complexity. A steep price tag on a franchise may be indicative of a company with a stronger business model and a larger, more involved central team, but it may also simply be a marker of a franchisor who wants to make more money up-front, rather than make more money over time. Only looking at the business system itself will tell you whether or not it’s a good one.
5) Recognizable Brands Make The Best Franchises.
There is something to be said for working under a name that the average person recognizes, and most of what can be said for it is that it makes marketing a great deal easier. Still, being a relatively unknown business is not necessarily a huge setback, as long as the franchise business comes with a great business model and marketing strategy. Particularly in home based business, there are few, if any, truly big-name franchises, but that doesn’t at all mean that there is a low ceiling on the possibility of success.
6) Buying A Franchised Small Business Is Cheaper Than Starting A New Business.
While this is true in some cases (vending machines for example), the average small business franchise will require a bit more of an investment on the frontend. A franchisee is often purchasing a business model that has gone through years of refinement, comes equipped with everything necessary to begin work, a fulltime staff ready to help 24/7, and sometimes even an introductory client list, all of which comes with a financial cost that the franchisee is partially responsible for. It’s worth it, of course, but it’s probably not cheaper than going it alone.
7) Low On Cash? You Should Buy The Cheapest Business Possible.
The cheapest business opportunity may be the best choice in some situations, but no business is the best simply by virtue of being the cheapest. It depends very much on how well the business is designed, how well it fits with the experience and talents of the franchisee, and how the market looks. Don’t just buy the cheapest to save a few hundred dollars; buy the best, even if it costs a little more. A business should be a commitment for the foreseeable future, so in many cases, the money you save up front will pale in comparison to the value gained by buying the right franchise, not just the franchise with the right price.
8) Working By Yourself Puts Everything On Your Shoulders.
Though the franchisee is ultimately responsible for the success of his business, whether it’s work at home or at an office location, the beauty of running a small business franchise is that there is always a central staff ready to back you up whenever they’re needed. The popular saying is that "you work for yourself, not by yourself."
9) Cheaper Businesses Require A Lesser Time Commitment.
Some people purchase a less expensive franchise hoping that it means they won’t have to commit as much of their time to it. In reality, financial expense does not equate to time expense. No matter what a franchisor or broker may say, all business opportunities require a sacrifice of time, period.
10) Small Businesses Are At The Mercy Of Their Clients.
The old saying is a pervasive one: "the customer is always right." That concept has convinced some businesspeople that particularly small businesses and work at home businesses need to always appease their clients to stay in business. "The customer is always right" may be a good thing to tell employees who have a tendency to spout off at the mouth, but it’s not a universal truth; sometimes the customer doesn’t have any idea what’s right, and it’s up to the owner to determine what’s best for the business, even when a customer may disagree.
There are many ways that facts become skewed and myths about cheap small businesses begin to raise their ugly heads, but untruths need to be curbed quickly. The longer that lies, even the nice-sounding ones, influence you, the less productive your business will be. Whenever you hear a report about franchise business of any size or cost, go to the source, not for hype, but for facts.
10 Myths Surrounding Cheap Small Business Franchises - To learn more about this author, visit Candice Clem's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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John AlexanderJohn has taught keyword research and SEO skills to small groups of business owners and Webmasters from over 80 different countries world wide since 2002. John is also the Director of Search Engine Academy ; Co-director of Training at Search Engine Workshops offering live, SEO Workshops with his partner SEO educator Robin Nobles, author of the very first comprehensive online search engine marketing courses at SEO Training Online and the SEO Workshop Resource Center. I look forward to hearing from you! - Visit John Alexander's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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