Franchising vs. buying a business

You might think that franchising and buying a business are pretty much the same thing.

After all, aren't you – on a basic level – paying someone to get a jump start on your new business?

It's an easy enough mindset to fall into. But thinking of your options as “buying” a franchise vs. buying a business isn't allowing yourself to picture the real state of play.

Because franchising and buying a business only have the most superficial things in common.

It's a kind of false equivalence. If you are trying to weigh the two ideas against each other, there are a few factors you need to add if you want to properly “balance” the scales.

What are you really trying to buy?

The simplest way to define the differences between franchising and buying a business is to think about your motivations for doing either.

What do you really want in return for your spend?

Do you want to get a quick leg up in the industry you're entering? Do you just want to begin from a slightly improved starting position?

Or might it be job security that you're really after? Confidence that your new business isn't going to instantly fold as soon as you open your doors?

When it comes right down to it, isn't what most people are really “buying” some sort of implied promise that their new business will succeed?

Getting ahead vs. staying ahead

In my own experience, people looking into buying a business are almost always searching for that elusive “guarantee” that their next endeavour – their next big thing – is going to be successful.

And this is where the difference between franchising and buying a business becomes clear:

Because when you buy a business, you get that initial leg up. But then you're on your own. If you thought you might struggle to succeed building your own business from scratch, your position hasn't changed all that much.

Sure, you might be starting from a slightly better position. Yet the essential fact of being on your own, trying to make it in the potentially cut-throat world of your new industry hasn't changed.

I remember when we started Fantastic Services. We faced competitors who weren't shy about trying to keep this newcomer off their turf. And if that meant sabotaging our vehicles and cutting our phone lines, so be it.

This might be an extreme example. It was a level of dirty business which we would never have imagined. It was also one we were completely unprepared to defend ourselves against to begin with.

Whatever the competition levels in your new industry though, when you buy a franchise, you aren't in it alone. That initial leg up is replaced by constant support. Support to help you with whatever aspect of your business you're trying to succeed in or however you're trying to grow.

As a franchise, you have expertise from people who have done it all before and who know how to make it work for you on speed dial.

Focus on your goals

Like so many things in life, some of the best advice when deciding how to start your new business is to focus on your goals.

Think about what you really want from your new opportunity. Is it just that initial jump forward? Or is it ongoing support that is going to help you succeed long into the future?

By focussing on your goals you make it much easier to distinguish what you would actually get from a franchise opportunity or business you see for sale. And whether it will give you what you actually want moving forwards.

The danger of one-shot-and-done

The common objection to buying a franchise is that it isn't usually a one-off exchange. Whereas buying a business outright is.

That's true. There's also a very important reason it's true.

When you buy a business, it really is a one-shot-and-done deal. Once you've handed over your money, the seller is done with you. Sink or swim. You don't give them anything more because you're not getting any more value from them.

With a franchise, you might pay an initial fee and ongoing fees. But the value you get from the relationship is ongoing too.

For instance, as a franchisee of Fantastic Services, you would be having your daily schedule filled by our online marketing efforts and sales team. You would have customer support handled on your behalf.

That's on top of things like the initial training you receive and being taught the market-leading processes we've spent the last decade and more refining.

That's the kind of value that buying a business – one-shot-and-done – simply doesn't get you.

Franchising vs. buying a business

Buying a business and buying a franchise might sound similar on the surface. But underneath, they are two different things.

When you're deciding between them, the most important thing is to bear in mind what you want from your new business.

If all you want is to be a few steps ahead of the curve when you start out, buying a business might do that for you.

But if you want the support and expertise which help guarantee that your new business is going to grow and be successful long into the future, franchising is where the scales are weighted.

What do you think? Would you buy a business or a franchise? Why?

Comment below and let's get the conversation started.