In a recent blog post, Tracey Cockerton explained the risks of starting from scratch, and the ways in which these risks are mitigated as a franchisee who purchases a resale.
The drainage franchise acknowledged that there are pros and cons to both buying a resale and starting a fresh business. When you start a fresh business, for instance, you’re your own boss, and you have “the freedom to operate exactly how you want to”. Plus, with “no board to win over, you can quickly adapt and manoeuvre your business to navigate the storms or profit from a direction change that sees you in front of the latest trend”. Franchising, on the other hand, means “staying within the rules, following the guide, and doing your part in a well-oiled machine”. On the other hand, though, there are many pros to buying a resale:
- You know the business you’ve purchased is viable and able to make money with a resale, in a climate where “42% of start-up businesses fail because there is no market need for their service or product”.
- Your finances will be easier to predict, manage and cover “using the history of an existing resale”, as “you can leverage [any borrowing] based on fact rather than fiction and provide accounts for several years prior”.
- The existing customer base! Purchasing a resale “can often come with existing customers, long-standing contracts, and a great deal of goodwill”. The value of this can’t be overstated, given that “14% [of new businesses] failed because of poor marketing”.
- A good team is essential to the success of a business, and in a resale, you might well “inherit staff”, allowing you to benefit from “an already established team” on day one.
Essentially, “It’s a personal choice, there are pros and cons to both [options], but to sum up, 20% of businesses fail in their first year and around 60% will go bust within the first three years. Being an entrepreneur is about risk, but it’s about a calculated risk. If you truly believe you have the next best thing, then go for it. If you want to take a more calculated approach, use a franchise resale to fast track you to the front and purchase a business that is tried, tested and operational.” Find out more about investing with Metro Rod and purchasing a tried, tested and operational business of your own via its profile page, linked above.
Cara Squires, Point Franchise ©