The difference between simply having a business idea and a good franchise concept
A business idea is often found very quickly. However, those people who have tried to turn a simple business idea into a workable business concept and then this business concept into a company know that a business idea and a successful company are worlds apart. It is no wonder, therefore, that good franchise opportunities are not cheap.
The first steps for people setting up a business based on their own business idea
Potential entrepreneurs, who are interested in setting up a business using their own business idea, generally have much more work to do initially than someone starting up within a franchise. For a business idea must be developed in very great detail before the business can actually be set up. If the business idea is to become reality, then detailed analyses must be carried out on the site, competition and market, business plans must be calculated and drawn up and financing opportunities must be examined. Other initial questions that often need to be answered are whether the business idea can be set up from a technical or organizational point of view and whether the potential entrepreneur has the necessary specialist knowledge or character to start up such a business. For these reasons, starting up within a franchise is often a real alternative to trying to develop a business idea from scratch.
Franchise start-ups often mean fewer risks
There is, of course, a business idea behind every franchise concept. However, these ideas have already been well developed by good quality franchises, they have been tried and tested on the market and have often been adapted several times. Put simply: using a business idea from a franchise often means less work for potential entrepreneurs than setting up using their own business idea as a large percentage of the background work has already been carried out by the franchise. This also means fewer risks. Several studies have shown this to be true including a study drawn up by the International Centre for Franchising and Cooperation (F&C): according to their data, franchise start-ups involve far fewer risks than starting up a business based on one’s own business idea.
Individuals must fight to make their business idea well known
However, even those who succeed in setting up their own company based on their own business idea find they often have to fight harder that franchise start-ups. For they alone are responsible for the further development of their company. New franchisees can exchange information and experiences within the franchise network, for example with the franchisor or other franchisees, and can use the know-how of the franchise group. Entrepreneurs, who go it alone, often find that it takes a long time before there business idea or product/service becomes established on the market and a “household name”. More often than not, new franchisees profit from the fact that the franchise brand name is very well known on the market and by consumers.
Good franchise concepts are tried and tested business ideas
It can be said that good franchise concepts are business ideas that have been tried and tested on the market and have proven to be a success. Stress, however, should be put on the word good franchise concepts. Again and again less reputable franchisors use franchisees to test out their business idea as this involves fewer risks for themselves. Potential franchisees should be careful if a franchise system has not run a successful pilot business or if the business concept is incomplete in many areas. People should really only consider franchise concepts that have become mature businesses.
Your own business idea already a franchise opportunity?
Entrepreneurs who intend to start up using their own business idea should perhaps first look at the many franchise opportunities in all branches. Perhaps they will find that their own business idea has been a franchise opportunity for many years and that the supposedly new idea could be started up with fewer risks as a franchisee-run business.