4 Ways Franchising Differs from Entrepreneurship
If you’re thinking about investing in bookkeeping franchise opportunities, then you may consider yourself an entrepreneur. However, entrepreneurship is different from franchising. Entrepreneurs are typically people who invest in and start new businesses, and according to that basic definition, it’s easy to see the similarities to starting a franchise. However, when you look more closely, you’ll see that franchising requires a different skillset than entrepreneurship, making it something that’s not only easier to do, but also less risky.
The Four Main Ways Franchising Is Different from Entrepreneurship
The following are the four main ways in which being a franchisee differs from being an entrepreneur and why being a franchisee may be more advantageous:
1. Franchises already have a proven business concept.
When you invest in bookkeeping franchise opportunities, you are investing in the products and services that the franchise has to offer. You believe in its quality and in the need it fulfills (you should never invest in a franchise whose product or service you don’t like). And because it is expanding via a franchising program, the franchise has proven its quality and the need it fulfills.
Entrepreneurs must come up with a business idea before they can proceed, and there’s no guarantee that their idea will be popular with consumers. Many entrepreneurs have invested years of their lives in a product they thought would be in high demand, only to see it fail.
2. Franchises require a smaller financial commitment.
When you invest in a franchise, you’ll know exactly how much money you’re putting into it. The franchise will tell you how much you’ll need to invest, and you’ll usually be able to obtain that amount relatively easily via a bank loan or through a franchise financing program as long as you have an acceptable credit history.
Because an entrepreneur is working with a new and unproven business concept, it’s going to be much more difficult to obtain financing. Often, entrepreneurs are unable to obtain loans due to the risk associated with new businesses and the amount of money that’s required. This means that they have to raise money from investors, which is a skill in itself.
3. Franchises don’t require in-depth business experience and knowledge.
Franchises already have a business plan in place and provide their franchisees with strong support in terms of running and marketing the business. This means that franchisees need to worry more about management than about their business plan. Entrepreneurs typically need a background in business to succeed because their operation will depend on the effectiveness of their business plan, which they will have to craft on their own.
4. Franchises are less likely to fail.
A franchisor will not want its franchisees to fail because this reflects poorly on the brand and takes away a source of profit. Because of this, franchisors offer a lot of support to franchisees. Additionally, when investing in a franchise, you’ll be starting off with an established brand, making it easier to draw from an existing customer base. Entrepreneurs have to start from scratch in terms of building their brand and customer base, which is why startups have over a 50 percent failure rate in their first five years.
These are four ways franchisees are different from entrepreneurs. For information on bookkeeping franchise opportunities, visit Supporting Strategies today.
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