Pitfalls Small Businesses Should Avoid

Posted by Georgia Kirby on Feb 19, 2018 7:00:08 AM

Starting your own business and venturing into the unknown is a very exciting prospect. Essentially you are creating your own destiny.

There is a fine line between success and failure, and this makes creating startup highly risky. However, a franchise is a much safer alternatively and still provides you with certain entrepreneurial perks.

Here are some reasons why franchise businesses can overcome common issues that cause startups to fail:

  • One of the biggest problems with small businesses is a lack of demand. Alternatively, a franchise is a business model that already works and has existing demand. However, small businesses can avoid this and instead succeed by ensuring their location is right.
  • Another reason for possible failure is lack of sufficient start up capital. Franchises can be expensive to invest in, but they company itself will help you develop cashflow projections and overall budgets. Therefore, it may not be cheaper than going alone, but you can better budget and manage expectations from your financial source.
  • A successful startup is very dependent on each employee hired. Recruiting the wrong ones often leads to crucial mistakes. A franchise company typically suggests the type of skills you should recruit and also have existing processes in place.
  • Finally, there is often an entire lists of competitive advantages franchises have over small businesses. Often small business owners simply can't compete with buying power, as more fairly established brands can command lower prices from their suppliers. Therefore, they can drop prices without making any losses, proving difficult for those going alone to compete. As a franchise, you will have excellent buying power, allowing you to compete on a level playing field, with the big boys.

However, to be clear, a franchise isn't for everyone. If you enjoy total freedom with things like branding, customer experience and product range, it may be better to start on your own. Therefore, if you choose to go on your own ensure you have a way to avoid the pitfalls mentioned previously.

But if you desire the challenge of being your own boss, with existing success and reduced chance of risk, a franchise might be your winning formula.


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Topics: Firm News


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