Aren't Sure What Kind of Business to Start? Consider a Franchise.
So, you’ve decided you want to start your own small business but deciding that is as far as you’ve gotten. There are many options and opportunities when it comes to small business ownership. If you haven’t looked at a franchise you might consider doing so.
The Benefits of Owning a Franchise
As many franchise experts will tell you, owning a franchise gives you the opportunity to “go into business for yourself but not by yourself.” You get many of the benefits of small business ownership but with the support of a big business network. Franchises typically have a higher rate of success than start-up businesses and there are many reasons for that. Franchisors can offer you, the franchisee, a considerable amount of support in getting started. They can assist you with business planning, training on their business model, marketing and management. A franchise also comes with an established reputation and customer base — something that takes most start-ups years to build.
The Potential Downsides
There are some disadvantages to franchising though. Some franchisors have strict rules and guidelines that you, the franchisee, must follow. Many of these are in place to protect the uniformity of the brand. For some entrepreneurs, owning a franchise doesn’t offer them as much independence as they would like.
Cost can be another issue. A franchise comes with a lot of built in value but buying into that value can be expensive. Franchise fees are just a part of what’s involved in financing a franchise. Recently, the U.S. Small Business Administration (SBA) has made it easier for lenders to provide SBA backed loans to franchises by streamlining the eligibility process. Any business found on the SBA’s franchise registry is eligible for franchisee financing. The list is also a great way to see what franchises are out there if you still haven’t decided on which one to pursue.
Find more tips on starting and growing your business at sba.gov.
Learn about other “How to Start a Business” resources in The Partnership’s Small Business Resources Hub or sign up for the Small Business Resources newsletter and stay connected for information about upcoming events, other resources and the latest announcements in the small business community in Greater Des Moines (DSM).
Dave Lentell is the lead lender relations specialist with the U.S. Small Business Administration's (SBA's) Iowa District Office. He helps coordinate SBA's small business loan programs in the state of Iowa and promotes SBA's programs to the small business community. He has been with SBA since 1993.