Buying a franchise business is very different from buying an online business. Each business model represents two ways of doing business. One is not necessarily better than the other. They are each a good fit for the right business owner.
Let s break down three areas that you will need to consider when buying either business. You want to look at what kind of investment capital you will need. You want to look at what kind of overhead costs are involved, what kind of profits can be obtained, and finally what kind of daily challenges you will face.
Investment capital can not be avoided by any real business owner. It takes money to get a business going. In some cases, the business owner may need to constantly fund the business. Let s look at the cost of buying a franchise. It usually can cost between $250,000 to $1.5 million depending on the type of product, and the company you associate yourself with. If you consider paying any less, you will most likely end up investing more at some point in your start up.
Let s examine the cost of buying a successful online business. There are many out there, and you want to do your homework. You should expect to pay between $500 and $20,000 depending on your income goals. In this business model you would be paying a fraction of the cost of a franchise. Make sure it is legitimate, and a partnership you can be proud of.
With an online business, you should look for a business that includes complete online training, and a website set up so you can market immediately. Your monthly overhead will be minimal since you can do the work from home. You will need a good computer, internet connection, and a marketing budget.
With a franchise, your monthly overhead will be extensive. You will want a complete list of all the areas of operation. You will have a lease to pay for a high traffic space, employees to pay, workman s comp insurance, building insurance, inventory, and maintenance costs. Some of these items are big ticket items so you will want to make sure you have a fair amount of working start up capital to fund these items while you get your business going.
One of the most important areas to look at in owning your own business is the profit and loss category. You must make sure that after your overhead is covered, your profits are still there. With the large expenses of a brick and mortar business, it is easy find the profits are low and your return on investment is not always there.
With a quality online business, profits can be very high. Overhead is low and there is more room for profit in your pocket. There are two things to look for when your evaluating which online business to go with. Look for a quality product that has high commission sales. This will allow you to make a high monthly online income. Make sure that the marketing and website system doesn t require more than twenty percent of your profits to reinvest back into marketing and advertising.
Daily challenges with both businesses are inevitable. With a franchise you will be challenged by the head aches that come with managing employees, managing the fine line of stocking inventory to meet demand. You will have paperwork to file, submit and coordinate to keep your books in line to manage the company efficiently.
The online business model has completely different challenges. The number one challenge is learning something new if you are not familiar with online marketing. With this in mind the learning curve is quick with the right mentors. This challenge comes with a huge reward of learning how to market anything, to anyone, from anywhere in the world.
Only you can decide if you are a good fit for a brick and mortar business model, or if you would be better suited with the freedom of working online. I have personally worked both business models and find that the online business model works better for me and those I coach.
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