Do you really want to go it alone and bootstrap your business?
If you’re an aspiring entrepreneur, then it may seem like the most logical thing to do. Strike out on your own in a true entrepreneurial fashion and build your business from the ground up.
But going it alone can bring its own challenges, like loss of motivation, higher chances of failure, and high personal costs.
In this article, we’re going to take a look at why franchising is a better option for people who want to start their own business.
What is franchising?
Before we do that, let’s quickly explain what franchising actually means.
A franchise is a license that grants a franchisee access to a company’s business knowledge, processes, and trademarks, allowing them to set up as a business and sell a product or service under the company’s name.
In exchange for acquiring rights, the franchisee has to pay a franchise fee, ongoing annual licensing fees, have a minimum amount of liquid capital available, and invest period of money into the business on an annual basis, which can range from thousands up to millions of dollars every year.
The franchisee will receive training, support, and access to all their products, services and/or process.
What is bootstrapping?
Bootstrapping is quite a bit different.
Bootstrapping is where an entrepreneur starts a company with little capital and no funding, relying instead on personal finances or the operating revenues of the new company.
The main benefit of launching a business in this way is that it allows founders to maintain more control than if they were to seek out fundraising from angel investors and dilute equity stakes. However the downside is that it places financial risk on the entrepreneur, and without significant capital investment may limit the growth of the company and its chances to become successful.
5 Compelling Reasons To Franchise, Not Bootstrap
Undecided? We’ll help you out. Pinspiration has 33 franchises around the US so we know how successful the franchise route can be. Let’s dive into some of the reasons below:
1. Lower investment costs
Starting your own business from scratch can be both costly and risky. One of the biggest advantages of the franchise model is the relatively low set-up costs.
Take Pinspiration, for example. Our initial franchise fee is $33,000, and you need just $50,000 liquid capital to qualify for a franchise. Compared to many other more established franchises, this is a much lower initial investment that’s required.
2. Higher chances of survival
Did you know only 80% of startups survive after one year? That’s another one of the big risks you take by bootstrapping and going it alone. According to business owners, reasons for failure include:
Money running out
Lack of research
Lack of industry expertise
By going to the franchise route, you can avoid many of the above problems because you’ll be buying into industry expertise, get access to well-oiled marketing machines, with proven market fits, and well-researched competitors and customer bases.
3. Hustle even harder
We’re all for the hustle here at Pinspiration (within reason!). But the fact is as a solo bootstrapping startup owner, you’re gong to be working harder, researching more, doing more hours, and wearing all the hats possible. Want to know what this is the perfect recipe for? Burnout!
As part of a franchise, you’ll be given the secret business playbooks that have helped other companies achieve franchise success. This will save time and money, and mean you can start working on the important stuff faster aka growing your franchise and getting customers in the door!
4. Proven systems and processes
Franchises are known for having a higher success rate than startups simply because their models have been tried and tested over many years in different markets around the world. They have a blueprint for a successful business.
Take Domino’s pizza, for example. With nearly 20,000 locations, it’s clearly developed a system that works time and again. And that’s not only down to the fact people love pizza!
5. Ongoing support
One of the major downsides of bootstrapping a business is that you don’t have a support network. Sure, you can join a Facebook Group or head to some events, but it’s not the same.
Being part of a franchise means you’re part of a wider team of fellow franchisees who are all striving for the same goal you are under the same brands and trademark. You’ll also get ongoing guidance, training and support from the franchisor to help you achieve your business goals and make your franchise a success.
The bottom line
We get the allure of starting your own business by yourself. No one to answer to, you’re totally your own boss, and you won’t have to give away any equity or pay royalty fees to anyone else.
But as we’ve said, we believe there’s a better way to do business – especially during these uncertain times. And that’s franchising. You’ll have the power of an already established brand behind you, plus you’ll get all the training and support you need to feel confident in running your own business.
At Pinspiration, we’re actively looking for new franchise owners to help us grow. Having grown from just one to 33 studios in just four years, we want to continue bringing our unique mix of arts and crafts to communities around the country so they can unleash their creativity. The perfect candidate has a passion for crafts and loves mixing and mingling with community members.
Sound like you? Visit your franchise page to get more information and book a free consultation with us to see if we’d be a great fit for your franchise business!