Why Starting Your Small Business from Scratch Makes Sense
For the independent-minded entrepreneur, starting a small business from scratch makes a lot of sense. Relative to buying into an existing franchise, achieve several important advantages when going it alone.
Complete Control of the Operation
Within legal parameters, you have much greater control over your successful or failure as an independent business owner. Franchisors put strict rules of operation in place for franchisees. As an independent owner, you make the rules for your company. You decide your internal policies, the products and services to sell, the prices to charge and how to promote. For entrepreneurs who desire to prove their own business model works, or that just want autonomy in operation, this advantage is important.
Control of the Brand’s Reputation
Along with control of your operation, an independent owner has complete authority over the company brand. On the downside, you do not get the value of an established franchise brand. However, you also do not suffer like a franchise owner when the brand goes sour or other owners fail to live up to standards. Control the evolution of the brand image from day one.
No Franchise Fees to Pay
Most start-up companies have costs of entry. However, you decide what to invest as an independent owner. With a franchise, you pay an upfront franchise fee as well as annual royalty fees to the franchisor. Starting from scratch saves you as much as hundreds of thousands of dollars in initial franchise expenses.
An independent owner pays for any building, equipment, inventory, supplies, licenses, services, employees and operational costs. However, you budget these expenses in accordance with your financial resources and anticipated revenue from the beginning.
Typical consumers do not distinguish a franchised chain store from a corporate chain store. Therefore, a local business owner may not benefit from community support with a recognized brand name. Many small-town residents “buy local” as a philosophy. It is easier to garner that community support if the business has a distinct name, or one that is associated with a prominent resident.
A franchise setup appeals to people who want external support. For aggressive entrepreneurs who want the highest ownership control, an independent operation makes more sense. Develop your brand from scratch, generate local support and avoid franchise fees.